Latham Advises Bayfront on US$410 Million Infrastructure Asset-Backed Securities Issuance

Latham & Watkins has advised Bayfront Infrastructure Management Pte. Ltd. (Bayfront), a platform designed for institutional investors to access Asia-Pacific infrastructure debt, on the successful issuance of its fourth infrastructure asset-backed securities (IABS) transaction through Bayfront Infrastructure Capital IV Pte. Ltd. (BIC IV), a wholly owned and newly incorporated distribution vehicle. The transaction represents Bayfront’s fourth IABS issuance and the third consecutive issuance to include a dedicated sustainability tranche.

BIC IV features a portfolio size of approximately US$410.3 million spread across 40 individual loans/bonds, 33 projects, 15 countries and 10 industry sub-sectors. Five classes of notes (Class A1, Class A1-SU, Class B, Class C and Class D) were issued to investors. The Class A1-SU Notes, being the dedicated sustainability tranche, have been issued under the Bayfront Sustainable Finance Framework dated August 2023. The Class D Notes, which are unrated and unlisted, benefit from a guarantee from GuarantCo Ltd, which is rated A1 by Moody’s and AA- by Fitch as of June 2023, for principal and interest amounts payable.

Bayfront, in its capacity as sponsor and retention holder, subscribed for the Sponsor Preference Shares (equivalent to 20.6 million Preference Shares, comprising 5.0% of the capital structure) and will retain them throughout the life of the transaction. The UK Foreign Commonwealth & Development Office, as part of its Mobilising Institutional Capital Through Listed Product Structures programme, committed an anchor investment of up to US$20.4 million in the Preference Shares and received a final allocation of US$5.0 million (equivalent to 5.0 million Preference Shares), given investors’ robust demand which resulted in strong oversubscription for the notes.

Latham previously advised Bayfront on the original issuance in 2018, Bayfront Infrastructure Capital II in June 2021, and Bayfront Infrastructure Capital III in September 2022.

Latham advised Bayfront as international counsel with a team led by Singapore partner Timothy Hia and Hong Kong partner Michael Hardy, with Singapore associates Kelly Teoh, Aakash Sardana and Cher Lin Chin.