14: Long-Term Debt and LeasingDBS received regulatory approval in June
this year to conduct institutional banking
activities, such as corporate finance, trade
finance, cash management and treasury
solutions, out of its Sydney branch.
Prior to setting up a physical presence
in Australia, DBS covered the region out of
its Singapore office, banking blue-chip Asian
and Australian corporates as well as financing
many infrastructure transactions including
various public private partnership (PPP)
projects.
For example, DBS was mandated lead
arranger for Woodside Petroleum’s various
syndicated loan facilities to support their
business activities in Asia. DBS has also
participated in syndicated loan facilities
arranged out of Australia for Lend Lease and
AV Jennings. In addition, DBS has underwritten
and lead arranged syndicated development
facilities and debt capital instruments to
support Lend Lease investments in Singapore.
Aligned to the substantial inflow of
investments into Australia, DBS has also
supported many Asian and internationalcompanies in their Australian investments. DBS
has supported Vitol in its acquisition of Shell’s
Australian downstream assets, as well as Olam
International’s AUD350 million five-year club
loan for its Australian entities.
In the privatisation space, this included
financing the highly successful AUD 1.75 billion
privatisation of Port of Newcastle and AUD
5.07 billion privatisation of Port Kembla and
Port Botany. Similarly in the PPP space, DBS
has been an active participant with numerous
award-winning deals such as those for Sydney
International Convention Centre, New Royal
Adelaide Hospital and New Bendigo Hospital.
DBS is consistently ranked among the top 10
project finance advisors and syndicated finance
arrangers and bookrunners in Asia by Project
Finance International.
DBS is a market leader in trade finance in
the Asia-Pacific region and has a track record
of financing trade flows between Australia and
Asia. DBS’ Global Transaction Services business
has seen a healthy 18% CAGR since 2009.Source DBS Bank. Used with permission. http://www.dbs.com/newsroom/DBS_
bank_officially_launches_Australia_operations. Accessed 7 September 2015.Project Finance
Project finance (PF) loans are typically arranged for infrastructure projects – such as toll roads, bridges,
power plants, seaports, tunnels and airports – that require large sums to construct but that, once built,
generate significant amounts of free cash flow for many years. Although project finance lending almost
always involves the use of syndicated loans, project finance differs from other types of syndicated credits
in two vital ways.
First, PF loans are made to stand-alone companies, sometimes called vehicle companies, created for
the sole purpose of constructing and operating a single project. If these companies are jointly owned
in a partnership arrangement by the private sector and government, they are known as public-private
partnerships (PPPs).
Second, PF loans are almost always limited or non-recourse loans, backed only by the
assets and cash flows of the project, so the parent company that sponsors the project does not
guarantee payment of the loan. Project finance loans have been employed in many very large
projects, such as the Eurotunnel under the English Channel, Euro Disneyland in France, the
Athens International Airport, the Gyeongbu High Speed Railway in Korea and the Australia–Japan
undersea cable.
project finance (PF) loans
Loans usually arranged for
infrastructure projects such as
toll roads, bridges and power
plantsstand-alone companies
Companies created for the
sole purpose of constructing
and operating a single projectexample