Borrowing base facility for Macquarie

Project description

A global team advised Macquarie Bank Limited (as borrower) on a US$1.1bn global borrowing base facility secured by various commodities, including carbon emission credits, held across Europe and the United States.

Scope of work

Our role was to advise Macquarie on how to structure and operate the facility in order to maximize the commodities that can be included in the borrowing base. This involved coordinating with our cross-border teams in the various jurisdictions where the commodities are held, stored and transited to and from, and considering novel questions of security. We were required to undertake an in-depth analysis of each European jurisdiction to identify the appropriate location for the EUAs, which also permitted the EUAs to be secured pursuant to local law.

What makes the project unique

The financing was ground breaking as it involved leveraging European and Californian emissions credits as part of the borrowing base.

The facility involved a group of international commercial lenders, including Standard Chartered Bank, SMBC, Bank of China and MUFG Bank. This was the first time these lenders had provided financing against emission allowances.

This facility is significant for Macquarie as it gives the ability to finance their global commodities business at competitive rates.

A unique aspect of this transaction was advising on how to secure emissions allowances in Europe and California. It was also the first time that these commercial lenders had provided financings against emission allowances.

Meet the Team

The clients was advised by teams in our Perth, New York, Toronto, Singapore, and Frankfurt offices..