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Allen & Overy advises on the new bond and loan financing of the Mong Duong 2 project, a market first in Vietnam

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Moncrieff Adam
Adam Moncrieff

Managing Partner, Vietnam

Ho Chi Minh City

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Bierman Femke
Femke Bierman

Partner

Amsterdam

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Beech Tim
Tim Beech

Joint Managing Partner

Singapore

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Image of Duc Tran
Duc Tran

Partner

Ho Chi Minh City

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Lovell Scott
Scott Lovell

Partner

Singapore

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Leemen Mark
Mark Leemen

Partner

Sydney

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Postma Duco
Duco Postma

Counsel

Amsterdam

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Image of Louisa Ingham
Louisa Ingham

Associate

London

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Regina Lui

Senior Associate

Hong Kong

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Biereder Magdalena
Magdalena Biereder

Registered Foreign Lawyer, NY

Hong Kong

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23 August 2019

Allen & Overy has advised the joint lead managers and the trustee on Mong Duong Finance Holdings B.V.’s debut 144A/Reg S offering of US$678.5 million 5.125% Secured Senior Notes due 2029 and the mandated lead arrangers and bookrunners on the US$402.7 million term loan and US$82.0 million debt service reserve letter of credit facilities to be made available to Mong Duong Finance Holdings B.V.

This is a market first in Vietnam and represents the first time a combination of project bonds and traditional bank debt has been used to repackage an existing project financing in Vietnam.

The issuer, Mong Duong Finance Holdings B.V., is a special purpose vehicle incorporated solely for the purpose of this financing transaction. Under a novel financing structure, the issuer will apply the proceeds received under the notes and the new loans to purchase existing loans made in 2011 to the project company, AES-VCM Mong Duong Power Company for the original construction of the 1,240MW power plant in the Quang Ninh Province of Vietnam, which is now operational. The project company is a joint venture between The AES Corporation, Posco Energy Co., Ltd. and China Investment Corporation.

Commenting on the deal, Scott Lovell, a partner in the Energy, Infrastructure and Projects team at Allen & Overy in Singapore said: “We understand that the notes offering was significantly oversubscribed. The overwhelmingly positive reaction to this offering serves as a strong and encouraging indication of the high levels of investor confidence in not only the innovative and novel structure for the transaction but also the use of debt capital markets instruments for the repacking of existing project financings in Vietnam and in the ASEAN region generally, and is a testament to the strength of the Sponsor group.”

The team was led by partners Scott Lovell, Mark Leemen and Adam Moncrieff with support from counsel Xunming Lim, senior associate Aaron Chiong and associates Magdalena Biereder and Siak Yong Goh. Partner Duc Tran led on Vietnamese law matters with support from associate Minh Tran. Partner Femke Bierman advised on Dutch law matters with support from senior associate Duco Postma and associate Bibi Van Gijzel. Partner Tim Beech, senior associate Regina Lui and associate Louisa Ingham advised on trustee matters.

 

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