Energy was a major component of deals this year—both fossil fuels and renewables. Green energy also made a big splash, as did one of the largest foreign direct investments into India.
Not without some controversy, last year’s largest infrastructure deal of the year saw a Macquarie Group-led consortium complete the acquisition of the UK government’s Green Investment Bank (GIB), now rebranded as the Green Investment Group, for £2.3 billion ($3.2 billion).
The original mandate was to encourage private investment into green projects such as offshore wind farms. The consortium was comprised of Macquarie Group, Macquarie European Infrastructure Fund 5 (MEIF5) and the Universities Superannuation Scheme.
“If you look at some of the energy projects being built, it’s renewable energy projects that are outpacing the rate at which traditional infrastructure projects are being built,” says Daniel Wong, global co-head of Infrastructure and Energy at Macquarie.
At the time of the acquisition, GIB had a balance sheet comprised of a portfolio of eight direct and indirect equity investments in offshore wind farms; four direct equity investments in waste-to-energy projects and biomass power plants; 22 loans to renewable-energy projects; and eight limited-partner interests in externally managed funds invested in more than 50 green projects.
Wong says that the desire and ability to acquire the GIB was a natural fit. There were partnership deals done in the past between the two parties (for example, the Galloper Wind Farm off the coast of Suffolk) and Macquarie had already invested billions of dollars independently into renewable energy.
Together, GIB and Macquarie have led a combined £15 billion worth of investment in the UK’s low-carbon economy since 2010.
Also in the energy sector was the sale of a 98% stake in India’s Essar Oil to Russian government controlled Rosneft and a consortium of investors led by Trafigura and fund UCP. VTB capital acted as financial adviser to Essar Oil, which was valued at $12.9 billion.
The deal was the largest foreign direct investment into India and the largest international acquisition made by Russian companies anywhere in the world. VTB provided $3.9 billion as a credit line and for debt reconstruction to Essar Oil.
On the equity side, last year’s largest deal was the IPO of Snap Inc. (parent company to Snapchat). The deal was not without its detractors and controversies. Snap had selected Morgan Stanley and Goldman Sachs as the lead underwriters for the IPO—one of the most closely watched since Facebook and Alibaba. Some in the industry faulted Morgan Stanley and Goldman Sachs for listing shares that lacked voting rights for investors.
Finally, Global Finance’s Debt Deal of the Year saw DBS successfully price a dual-tranche US-dollar project bond worth $2 billion for Indonesia’s second-largest power producer, Paiton Energy.
Lead underwriters on the deal included Morgan Stanley and Goldman Sachs. The deal was hailed as the first investment-grade bond, and the largest rated amortizing international bond, for an infrastructure project in Asia since 2000.
DEALS OF THE YEAR
DBS successfully priced a dual-tranche USD project bond issue of a total size of $2 billion for PT Paiton Energy (“Paiton”).
Top Underwriters: Morgan Stanley and Goldman Sachs
Joint Global Coordinators: Barclays and HSBC
Joint Lead Managers and Joint Bookrunners: Barclays,
Citigroup, DBS Bank, Deutsche Bank and HSBC
Joint Lead Manager: SMBC Nikko
Co-Managers: Mizuho Securities and Morgan Stanley