King & Wood Mallesons Acts on the Peninsula Link Freeway’s $745m Refinancing

King& Wood Mallesons has advised Southern Way, owner and operator of the Peninsula Link freeway in Melbourne on the $745 million refinancing of its finance facilities.

The 27km freeway is a key infrastructure asset for the State of Victoria, which opened in January 2013. Together with its 25km walking and cycling path, Peninsula Link is already much appreciated by tourists and local residents of the Mornington Peninsula and Melbourne.

Delivered as a Public Private Partnership project, Peninsula Link was awarded to the Southern Way consortium in 2010, including finance to fund the construction and ongoing operation of the freeway.

The new lenders are a syndicate of banks comprising Australia and New Zealand Banking Group, Bank of Tokyo-Mitsubishi UFJ, Commonwealth Bank of Australia, National Australia Bank, Sumitomo Mitsui Banking Corporation and Westpac Banking Corporation, who have provided a single five-year facility.

Southern Way’s refinancing deal represents an improvement of its financing terms and has reduced the project risks to the investors, lenders and the State of Victoria.

This deal is part of a current refinancing trend for deals closed in the height of the GFC, particularly infrastructure projects. Borrowers are taking advantage of the better market conditions and improved liquidity to refinance on better terms and with more favourable pricing.

KWM’s Banking & Finance team was led by Partner Jeff Clark, along with Senior Associate Charlie Detmold and Solicitors Jessica Chilton and Anthony Hong.

The KWM team provided legal and commercial advice to Southern Way prior to and throughout the refinancing on market conditions and opportunities, as well as advice on the documentary and legal requirements for refinancing, hedging and structuring.

The team also worked closely with Macquarie Capital to provide ongoing project management support for a smooth transaction through to close. By proactively facilitating commercial and legal discussions with both the lenders and the State of Victoria, the KWM Banking & Finance team ensured that the tight refinancing timetable was met and a successful close was achieved.

The agent and security trustee was ANZ Fiduciary Services, Macquarie Capital acted as financial advisers to Southern Way and Gilbert + Tobin acted as legal advisers to the lenders.

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