K-Exim/K-sure project financing explained

Author: | Published: 11 Jul 2011
Senior lenders on one end, juniors on the other

The Export-Import Bank of Korea (K-Exim), Korea Trade Insurance Corporation (K-sure) and a group of 11 international commercial bank lenders raised financing for a $2.5 billion greenfield petrochemical facility for Jurong Aromatics on Jurong Island, Singapore.

Stephen McWilliams, managing partner of Latham & Watkins in Singapore told IFLR the deal had required a balancing of competing priorities between senior and junior lenders.

"Standard Chartered and Icon wanted voting rights and control provisions from their subordinated debt position like equity holders, so we had to balance out," he explained.

The debt-to-equity was sized conservatively, and all equity and subordinated debt was contributed prior to funding of the senior loans, including contingent equity.

"Subordinated...