Banking and Project Finance

The Banking and Finance practice group provides a wide range of expert legal services to the Firm’s clients. The group’s experience and expertise covers two general areas of practice:

(1) Banking/ Regulatory

The Firm advises clients on the legal and regulatory aspects of all types of banking transactions. The group’s services include:

  • Advising on the legal and regulatory aspects of all types of banking transactions, and transactions involving non-bank financial institutions regulated by the Bangko Sentral ng Pilipinas (“BSP”) (the Philippine Central Bank)
  • Advising on the regulatory framework applicable to, documenting and negotiating all aspects of bank/corporate loan transactions, guarantees and other banking security arrangements
  • Advising on the legal aspects of various financial products, including derivatives transactions
  • Advising on and assisting in the establishment of all types of domestic banks; advising on the legal and regulatory aspects of operations of foreign banks, including the foreign currency deposit system and offshore banking units
  • Advising on the application of regulations and circulars issued by the BSP, and liaising with the relevant departments of the BSP
(2) Project Finance

The Firm has been engaged as counsel in several major and groundbreaking project finance transactions involving the infrastructure and energy sectors. The group takes the lead role in contract negotiations and the preparation of project finance facilities, agreements and documents, including ancillary security agreements. The group’s services include:

  • Acting as counsel for several project companies; advising on the regulatory framework for the investment structures to be agreed upon among the sponsors, developers and project proponents
  • Advising on, and taking the lead role in negotiating, preparing and reviewing credit facilities, project loan agreements, mortgage trust indentures and other security arrangements, credit support and enhancement facilities, and other principal as well as ancillary documents for project financing
  • Conducting the necessary due diligence work either as project developer’s counsel or lender’s counsel, and resolving issues broached by such exercise, including real estate issues relating to project sites
  • Negotiating, drafting and reviewing joint venture agreements, shareholders agreements, share sale and purchase agreements and other project documents and agreements underlying the financing of the project
  • Assisting clients in obtaining various government licenses and permits, including approvals and registrations from the BSP relating to the project finance facilities
Representative Transactions

The Firm’s representative banking and finance transactions include the following:

  • Acted as counsel to Sithe in connection with the financing of the engineering, design, procurement, development, construction and operation of GNPower Mariveles Coal Plant Ltd. Co.’s 2x300MW (net) clean pulverized coal-fired power plant in Mariveles, Province of Bataan through debt and equity investment in the aggregate amount of approximately US$1 billion. This transaction was awarded the 2010 Project Finance Deal of the Year award by China Law and Practice, a publication of the Euromoney Institutional Investor’s legal media group.

 

  • Acted as lenders’ local counsel in connection with the US$270 million financing of the 2 x 100MW Kepco SPC (KSPC) power project in Naga, Cebu. This is the first financing transaction for a greenfield merchant plant in the country participated in by international lenders.

 

  • Acted as counsel for the consortium of Tokyo Electric Power Corporation and Marubeni Corporation in their acquisition of the shares of Mirant Asia-Pacific Limited (“MAPL”), which has interests in three power generation facilities in the Philippines, namely (i) Mirant Sual Corporation, the owner of the 1,218 MW coal-fired Sual generation facility, (ii) Mirant Pagbilao Corporation, the owner of the 735 MW coal-fired Pagbilao generation facility, and (iii) the 1,251 MW natural gas-fired Ilijan generation facility. The acquisition of MAPL involved a transaction amount of approximately US$3.4 billion. The firm received praise from both clients and colleagues for its work in structuring all aspects of the transaction with foreign counsel. The financing for the deal was awarded in December 2006 as the Mirant Asia Pacific – Best Syndicated Loan by Asia Money Magazine Regional Deals of the Year 2006. The deal was also cited in the Pacific Business Press as the largest energy M&A transaction in the Asia Pacific region for 2006.

 

  • Acted as counsel for Manila North Tollways Corporation in connection with the refinancing of its outstanding project finance debt obligations in the amount of US$201.7 Million through a combination of (i) amended debt facilities, (ii) a new US Dollar term loan facility provided by Mizuho Corporate Bank, Ltd., and (iii) the issuance of fixed rate corporate notes in an aggregate principal amount of Php5.5 Billion. The notes were sold through private placement to primary institutional lenders in accordance with Rule 9.2(2)(B) of the Philippine Securities Regulation Code. Aside from assisting the company with the negotiation, drafting, and finalization of the refinancing documents, the Firm also obtained all the necessary government approvals for the transaction, including the required BSP approvals and the registration with the relevant Philippine registries of the revised security documents.

 

  • Acted as counsel to Cebu Energy Development Corporation in connection with the partial financing of the design, procurement, development, construction, operation and maintenance of a 246 MW coal-fired power plant in the Province of Cebu, Philippines, through credit facilities provided by a syndicate of the leading local financial institutions in the aggregate amount of Php16 billion. The transaction involved a Php22.8 billion greenfield project, which will use the latest in clean coal technology. The transaction is the largest Philippine Peso-denominated project financing to date.

 

  • Acted as counsel to Panay Energy Development Corporation in connection with the Php14 Billion financing of 2 x 82MW gross (2 x 72 MW net) circulating fluidized bed coal-fired power plant located in La Paz, Iloilo City, Province of Iloilo.

 

  • Acted as counsel for SN Aboitiz Power Corporation in connection with the US$380 Million financing and refinancing of the acquisition of the 360MW Magat Hydroelectric Power Plant from PSALM.       The lenders include the International Finance Corporation and Nordic Investment Bank. In the same year, the financing transaction was awarded the “Power Deal of the Year, Asia Pacific” award by Project Finance International Awards 2007 and the “Best Project Finance/ Best Privatization Deal” award by the Asset Triple A House and Deal Awards for 2007.

 

  • Acted as counsel for SN Aboitiz Power-Benguet, Inc. in connection with the US$375 Million refinancing of its acquisition of the 175MW Ambuklao-Binga hydroelectric power plants from PSALM. The Lenders included International Finance Corporation, Nordic Investment Bank, and a syndicate of Philippine commercial banks.

 

  • Acted as counsel for Luzon Hydro Corporation in connection with the refinancing of its outstanding project finance debt obligations. The refinancing facilities include a US41 Million term loan facility from Philippine National Bank and Banco de Oro Universal Bank and a US$24 Million cash-backed loan facility from the same lenders. Aside from assisting the company with the negotiation, drafting, and finalization of the refinancing documents, the Firm also obtained all the necessary government approvals for the transaction, including the required BSP approvals and the registration with the relevant Philippine registries of the restated security documents.

 

  • Acted as counsel for Hedcor Sibulan, Inc. in connection with a PhP3.57 Billion Loan obtained from PNB, Metrobank, and RCBC.

 

  • Acted as project company counsel for the US$680 million financing and US$375 million financing of the 1000MW Santa Rita and 500MW San Lorenzo natural gas power plants, which are owned and operated by First Gas Power Corporation and FGP Corp., respectively. First Gas Power Corporation and FGP Corp. are both jointly owned by First Gen Corporation and British Gas, and the Firm acted as Philippine counsel for the borrowers. The financing for these transactions closed in 1997 and 2000 and was regarded as the largest power project financing deals in the country at that time.

PunoLaw’s Banking and Project Finance Practice is headed by Senior Partners JONATHAN P. SERRANO and JOHN MAYNARD G. ATOTUBO. Both are experts with extensive experience in banking and finance and are well known to banks, power and energy companies and real estate firms.