Following their recent reports highlighting market trends in Asia and the Middle East and in Europe and the U.S., HSBC Issuer Services is taking a look back at some of the innovative Infrastructure and Structured Finance projects where their global corporate trust expertise has been instrumental over the last twelve months.
The growing role of sustainability has also led HSBC’s Issuer Services business to enrich its range of onshore & offshore agency and trustee services to support clients’ projects globally, while developing in-house expertise in dealing with complex transactions with sustainability elements.
Supporting Colombia on its “4G” infrastructure journey
- Overview: Autopista al Mar 2 is a highway development project in Colombia, a part of the national government’s fourth generation of road concession projects. The financing is the first private investment made by a Chinese construction company and also marks the first financing made by China Development Bank, both under the 4G program. The 254km toll road is designed to improve the infrastructure and transport connections in Colombia’s Antioquia department.
- Our services: HSBC Issuer Services was appointed as the Offshore Account Bank for the USD508m project. Our renowned global reach, expert teams and capabilities on similar projects across various jurisdictions was a clear differentiator and led the client to choose working with us.
- About the project: The project received multi-currency funding from a consortium of lenders from China and Colombia, making it one of the first PPP projects to be financed in Latin America with a Chinese sponsor.
- Value added: Owing to the complex nature of the project and the range of transaction parties involved, the client required bespoke accounts to be opened to facilitate the remittance of monies. HSBC customised its Offshore Account Bank offering to cater to the specific needs of the project.
Reinvigorating East London neighbourhood and businesses
- Overview: Eastwick & Sweetwater is a joint venture between Balfour Beatty and People for Places. The company is constructing a seven-phase housing development project at the site of the Queen Elizabeth Olympic Park in London. Homes England is financing the project bilaterally. The project will target BREEAM ‘Excellent’ status and produce 302 zero carbon homes
- Our services: HSBC Issuer Services was appointed as the Project Account Bank to provide controlled collection accounts for the remittance of monies to the contractors.
- About the project: The initial phase, which marks the first of seven construction phases, will see the delivery of four mixed-use buildings, including 302 apartments, townhouses and several associated commercial facilities including retail and leisure amenities. Ground preparation works have started with completion expected in spring 2021.
- Value added: The housing provider had specific account requirements which were sparsely offered by competitor Account Bank providers. HSBC customised its offering to meet the client’s needs under stringent timelines.
As part of our commitments to tackle climate change and support sustainable growth, HSBC is helping clients break new ground in the green bond markets and to finance some of the biggest climate-friendly infrastructure projects in the world.
HSBC’s Issuer Services team works closely with colleagues in the Green Bonds origination team to provide end-to-end support on such transactions. In 2019, HSBC Issuer Services acted in a number of renewable project finance agency transactions.
Empowering Indonesia's government to supply natural gas reserves in East Java
- Overview: The JTB Project involves the development of existing natural gas reserves in the East Java Province of Indonesia by Pertamina, Indonesia’s government owned, integrated oil & gas company. The non-recourse project financing included both conventional lenders and Islamic fund providers under a Wakala Structure, for a total of circa USD1.8 billion.
- Our services: HSBC Issuer Services in America acted as Borrower Trustee and Disbursement Trustee in the JTB Project for PT Pertamina EP Cepu, a wholly owned subsidiary of PT Pertamina, while the Issuer Services team in Indonesia was appointed as Onshore Account Bank. Our experience in executing the Trustee Borrower Scheme for Indonesian oil and gas projects subject to the World Bank negative pledge and our ability to provide both offshore (New York) and onshore (Indonesian) services were critical.
- Value added: In addition to the smooth execution of the transaction’s closing, the implementation of the Trustee Borrower Scheme and provision of the required offshore and onshore account services allowed the sponsor to meet the Regulatory and Political Risk Insurance requirements of this transaction.
Equipping South Carolina and Texas in renewable energy infrastructure
- Overview: Cubico Sustainable Investments is one of the world’s leading renewable energy infrastructure companies across Europe and the Americas. Its large portfolio includes three solar assets: the “Palmetto Project”, the “Huntley Project” and the “Wagyu Project” across two states (South Carolina and Texas).
- Our services: HSBC was mandated as 'left lead' to finance the construction of a circa USD400 million, 377MW portfolio of the three photovoltaic solar projects in South Carolina and Texas. Each project was financed separately but subject to a master Common Terms Agreement. HSBC Issuer Services was appointed as Administrative Agent, Collateral Agent, and Depositary Agent. As Collateral Agent, we have a perfected first priority lien over all the project assets (plant, property, and equipment) during construction including all the Borrower’s rights, titles and interests in the Collateral Accounts.
- Value added: Over the course of the three projects, HSBC’s Issuer Services team was able to accommodate demanding closing timeframes and any necessary amendments, and continued to be part of the bank’s full service solution for Cubico. As a result, HSBC continues to partner with Cubico as it expands is global footprint and develops new greenfield renewable energy projects.
Expanding Issuer Services' footprint in the Middle East
Regional programmes such as Saudi Arabia Vision 2030 and Dubai Vision 2021 both include projects in infrastructure, transport, renewable energy and advanced technology, thus making the region a land of new opportunities.
How is the Middle East region unlocking opportunities?
The region is tapping into the potential offered by initiatives such as China’s Belt and Road Initiative, while evolving its regional infrastructure to diversify business opportunities across sectors. HSBC Research shows that the region is well placed to take advantage of the USD900 billion BRI infrastructure development plan that aims to connect China more closely with the rest of the world.
The Issuer Services unit is well positioned to provide agency and trustee solutions for clients exploring MENAT trade corridors and financing opportunities. Leveraging HSBC's long-standing presence in the region and its already well-established teams, Issuer Services has expanded its footprint and invested in dedicated Issuer Services offices in strategic areas: Bahrain, Egypt, Saudi Arabia and UAE. Next market expansions will include Kuwait and Oman in late 2020.
Helping clients build a solid foundation for their project
Issuer Services have decades of experience providing both bond and loan agency services to the project & export finance sector.
- Our specialist team supports clients’ transactions through their entire lifecycle—from construction, to close of deal, and through the operating phase until the maturity of the financing.
- We enter each transaction acting independently or with HSBC’s advisory and origination teams. Regardless of the type of financing or the financing parties, we can provide support both to the lender and the borrower.
Strategic agency and trustee roles:
- As intercreditor agent, we play a strategic role in complex financing transactions involving different types of lenders, syndicates of banks, ECA and/or multi-lateral institutions. In this context, we are selected by the lenders to act on behalf of all parties in the lending arrangements as their agent.
- As a trustee and/or agent: We monitor the terms of financing agreements, hold and safe-keep collateral for the benefit of secured creditors, monitor transaction reporting and covenant compliance requirements, communicate with investors and administer cash flows.
Find out more in our brochure.
About HSBC Issuer Services
HSBC’s Issuer Services business provides operational and administrative services for conventional and structured debt, project and export finance, escrow, repackaged notes and syndicated loans to enable clients to pursue international capital market activities.
Our vast network, local knowledge and client-focused services enable us to provide tailored trustee and agency solutions.
To find out more about HSBC Issuer Services: