The underwriters for the Shuweihat 2 independent water and power project - BayernLB, Calyon and Natixis – have invoked a material adverse change clause (MAC) and are negotiating a compromise with sponsors Suez and the Abu Dhabi Water and Electricity Authority (ADWEA). Although the use of the MAC clause would allow the banks to walk away from the financing, with the threat of litigation, the banks are keen to do a deal to protect relationships and reputations.
The emerging compromise is a bridge loan to start construction funded by the banks but with joint and several guarantees from Suez and ADWEA, in effect short-term corporate debt. The financial adviser to ADWEA, HSBC, is central to the efforts at putting together the compromise.
An earlier solution that the leads floated involved the banks syndicating as much of the $2.6 billion long-term...
Thank you for printing this article from IJGlobal.
As the leading online publication serving the infrastructure investment market, IJGlobal is read daily by decision-makers within investment banks, international law firms, advisory firms, institutional investors and governments.
If you have been given this article by a subscriber, you can contact us through www.ijglobal.com/signup, or call our London office on +44 (0)20 7779 8870 to discuss our subscription options.
Thank you for your interest in using My IJGlobal.
As your firm uses IP recognition, you will need to sign in with your own unique login and password. If you do not have your own login details, please click here to register.
Alternatively, contact the IJGlobal Helpdesk on +44 (0)20 7779 8870 or email Helpdesk on email@example.com.