30 May 2005
Key Points:
Clayton Utz won awards for Infrastructure Deal of the Year and Securitisation Deal of the Year at the 2005 Australasian Legal Business (ALB) Deals of the Year Awards recently held in Melbourne to promote outstanding professional achievement and some of the best legal work of the year throughout Australia.
Our project and debt finance practice advised on the Epic West Dampier to Bunbury Natural Gas Pipeline Acquisition, which won the Infrastructure Deal of the Year. This award recognises work in representing a consortium, financier, sponsor, equity investor, government body or other party on a major project.
We acted for the financiers (and the Receivers and Managers appointed by them) which provided approximately A$1.9 billion dollars to Epic Energy for its purchase of the Dampier to Bunbury Natural Gas Pipeline from the Western Australian Government in 1998. The transaction became a touchstone for the problems that can arise as a result of the privatisation of infrastructure assets which are subject to independent regulatory regimes. At the time the pipeline was acquired, Epic's financial model assumed it would receive a certain minimum regulated price for delivered gas. However, the independent regulator in Western Australia approved a significantly lower price which resulted in Epic being unable to service its debt. We acted for the financiers throughout Epic's prolonged dispute with the Regulator and its attempts to refinance and sell the pipeline. On the 28 April 2004 the standstill arrangements were terminated and the financiers appointed receivers and managers to the pipeline. Clayton Utz acted as legal adviser to the receivers and managers for the sale of the pipeline through a competitive bid process. The sale was successfully completed in October 2004, with the financiers being repaid in full.
A large team from Clayton Utz worked on this deal including premier banking and finance partners, Quentin Solomon and Janet Firkin.
We were also successful in the Securitisation Deal of the Year category, which recognises a major securitisation transaction, with particular emphasis on innovation, structure and complexity. The winning transaction was the Adelaide Bank Wrap Deal, where we acted for Adelaide Bank in relation to its Series 2004-2 (W) TORRENS Trust which involved the issuance of A$800 million fixed and floating rate residential mortgage-backed notes.
The distinguishing feature of this transaction was that it was the first time in Australia that a financial guarantee was used as a substitute for the usual credit enhancement in RMBS transactions, being a pool mortgage insurance policy. The financial guarantee was provided by Ambac Assurance Corp. guaranteeing the full and timely payment of interest and repayment of principal by the legal final maturity date of the class A notes. The loan pool also consisted entirely of "lo-doc loans" where the income of the borrower was not fully verified. The class A notes were assigned an 'AAA' rating prior to recognizing the financial guarantee from Ambac. This complex transaction was successfully accomplished due to the superior technical expertise and practice management of partner, Ninian Lewis and senior associate, Louise McCoach.
