Shearman & Sterling represented Mong Duong Finance Holdings B.V. (the “issuer”, a Dutch finance affiliate of AES Mong Duong Power Company Limited) in its offering of $678.5 million 5.125% senior secured notes due 2029 and execution of a $402.7 million senior secured loan facility provided by an international syndicate of commercial bank lenders, for the purpose of acquiring all of the outstanding project financing loans (the “BOT loans”) of AES Mong Duong Power Company (collectively, the “transaction”). AES Mong Duong Power Company Limited (the “BOT Company”) is Vietnam’s largest private sector power project to date and its sponsors are The AES Corporation, POSCO Energy Co., Ltd. and China Investment Corporation.
The notes and the loan facility have a shared security package, consisting of a pledge of all of the outstanding capital stock of the issuer, a pledge of certain of the issuer’s accounts and security over the issuer’s assets, including first priority liens on the BOT loans. The BOT loans are secured by substantially all of the assets of the BOT Company. The consummation of the transaction was subject to various closing conditions, including the State Bank of Vietnam registration of the change in lender from the original banks under the BOT loans to the issuer.
Innovative structuring, timing and documentation were required to balance the needs of multiple parties with an interest in the success of the transaction, including the original lenders, three different sponsor entities in three different international jurisdictions and the underwriters of the notes and lenders under the loan facility, including Citigroup and HSBC. This highly complex $1.08 billion transaction represents the first project bond issue and the first IPP refinancing in Vietnam.
The team below included associate Joe Freeman (Singapore-Project Development & Finance).