Latham Advises on Innovative Infrastructure Asset Backed Securities With Sustainability Tranche
Bayfront Infrastructure Management Pte. Ltd (Bayfront), a platform designed for institutional investors to access Asia-Pacific infrastructure debt, has announced the successful closing of an infrastructure asset-backed securities (IABS) issuance through Bayfront Infrastructure Capital II Pte. Ltd. (BIC II), a wholly owned and newly incorporated distribution vehicle. This was Bayfront’s second IABS offering, building on the success of an initial IABS issuance in 2018 by Bayfront Infrastructure Capital Pte. Ltd., which was Asia’s first ever securitisation of project and infrastructure loans. Latham acted on the original issuance in 2018, and deployed a global deal team across Singapore, Hong Kong and London to advise Bayfront and BIC II on the new transaction.
In addition to a US$40.1 million equity tranche which was retained by Bayfront, five classes of investment grade rated notes (Class A1, Class A1-SU, Class B, Class C and Class D) of US$361.1 million in aggregate principal amount were offered to institutional investors and will be listed on the Singapore Exchange. The Class A1-SU Notes were the first ever publicly issued securitised sustainability notes leveraging on Bayfront’s Sustainable Finance Framework, with approximately US$146.7 million or 43.4% of the portfolio on issue date comprising of eligible sustainable (green or social) assets in accordance with their Framework.
The crossborder deal team was led by Singapore partner Timothy Hia, with Hong Kong counsel Michael Hardy, London associates Boin Cheong and Jonathan Lauras, and Singapore associates Kelly Teoh and Aakash Sardana. Specialist structured finance advice was also provided by London partners Tom Cochran and Sanjev Warna-kula-suriya and Los Angeles partners Dominic Yoong and Vicki Marmorstein. Advice on tax matters was provided by New York partner Gregory Hannibal with associate Seung Hyun Yang.
Launched in November 2019, Bayfront seeks to address the infrastructure financing gap in the Asia Pacific region by facilitating the mobilisation of private institutional capital into the infrastructure financing market. Bayfront acquires, warehouses and manages predominantly brownfield project and infrastructure loans from financial institutions, with the objective of distributing securitised notes to institutional investors in the public markets.