Appleby Mauritius advised in a structured finance deal of US$450 million 6.25 % senior secured notes due 2025 (Notes) issued by Mauritius-based Cliffton Limited (Issuer) and listed on the Singapore Exchange Securities Trading Limited.
The proceeds from the Notes will be used principally to subscribe to green Indian Rupee (INR) non-convertible debentures (denominated in rupees) (NCD) that would be issued by Delhi International Airport Limited (DIAL), the first airport in India to be awarded the Leadership Energy and Environment Design 'Gold' rating. DIAL holds a solid market position as the developer and operator of India's largest and busiest airport which is Indira Gandhi International Airport (Airport) in New Delhi, India, according to the Airports Authority of India. DIAL will be using the proceeds to principally refinance its existing bonds and the balance towards capex investment in eligible green assets as well as to finance the phase 3A expansion at the Airport. Upon completion, it is expected that the Airport's passenger handling capacity will increase to 100 million passengers per year, up from around 66 million.
The Issuer is an orphan special purpose vehicle owned by a purpose trust established under the laws of Mauritius. DIAL has not connection with the Issuer and does not exercise any control over the Issuer. The Issuer's noteholders will benefit from a first-ranking fixed and floating charge over the bank accounts of the Issuer together with a pledge granted by the purpose trust in respect of its shares held in the Issuer. The Issuer will, as holder of the NCD issued by DIAL, benefit from a security package that includes DIAL's rights as permitted under the concession agreement. Such security shall be granted on a pari passu basis along side the senior secured lenders of DIAL.
To manage its exposure to INR depreciation, the Issuer proposes to use redemption premiums, and enter into coupon-only swaps and credit spread options covering through to the call period of the Notes. The swap transactions will hedge the currency exposure of the Issuer with respect to both the interest payment and principal payment on the maturity date. The call spread transaction will fully protect the Issuer against any depreciation in the INR to the U.S. Dollar (USD) if the USD/INR spot rate is between the lower strike price and the upper strike price and will partially protect the Issuer against any depreciation in the INR to the USD if the USD/INR spot rate is above the upper strike price, in each case with respect to the redemption amount due under the NCD at maturity.
The Hongkong and Shanghai Banking Corporation Limited and J.P. Morgan Securities plc have acted as the joint lead green structuring agents to the Issuer.
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