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INFRASTRUCTURE FINANCING |15
financing markets in Canada are really good,
really strong and they're very sophisticated."
Financing the construction of a highway,
hospital, jail or power plant is a sprawling
undertaking requiring a complex financial
structure.
These projects typically require different
financing at different stages of the project, so
each is set up as a special-purpose entity that
uses a combination of banks, bonds, investment funds and public money on the short
and long end.
While the Canadian banks are active
in the short-term construction phase, the
bond market has been gobbling up private
placements of Canadian infrastructure
offerings connected with the long-term
operating stage.
"When you go to the bond market –
and we've gone through this in the health
sector with two hospitals in Montréal,
for example – there is big interest," says
Marc Dorion, QC, AdE, co-leader of the
national Energy and Infrastructure law
groups at McCarthy Tétrault LLP.
"Lenders have some latitude in assessing
what kind of projects they want to participate in because with several jurisdictions
now doing P3s and a greater number of
new ventures being developed, they have
a growing variety of options."
The bond market is not quite as drawn
to long-term lending in smaller infrastructure projects, he says, however Canadian life
insurance companies have become very active
in that space.
"That said, we have fewer life insurance
companies than we used to, there is greater
concentration and the level of financing
they can commit to will generally not exceed
$400 million. So for larger financings, we
use different structures such as a hybrid or a
mini-perm structure. We've also seen foreign
banks in the past few years, including Japanese
"WHILE WE'RE
SEEING VERY
FEW SPANISH OR
FRENCH BANKS, WE
ARE SEEING THE
JAPANESE BANKS
COMING BACK
INTO LONG-TERM
LENDING. AND WE'VE
SEEN A HUGE, AND
I REALLY MEAN
HUGE, INCREASE
IN BOND
FINANCING."
Lexpert®Ranked Lawyers
Ford, Daniel A.
Fougere, Kevin
Freitag, Shane
Furlan, Stephen
Fyfe, Stephen J.
Gagnon, Nicolas
Torys LLP
(416) 865-7372
dford@torys.com
Torys LLP
(403) 776-3746
kfougere@torys.com
Borden Ladner
Gervais LLP
(416) 367-6137
sfreitag@blg.com
McCarthy Tétrault LLP
(416) 601-7708
sfurlan@mccarthy.ca
Borden Ladner
Gervais LLP
(416) 367-6650
sfyfe@blg.com
Lavery, de Billy, L.L.P.
(514) 877-3046
ngagnon@lavery.ca
Mr. Ford's practice
focuses on public
infrastructure and
project finance, acting
for sponsors, lenders,
governments and service
providers. His experience
includes some 20 PPP
and alternative financing
and procurement
projects.
Mr. Fougere advises
corporations and
financial institutions on a
wide range of corporate
financing transactions,
including project
financing, high-yield
bonds, term loans, crossborder and acquisition
financings, asset-based
lending and syndications.
ROB-Infrastructure.indd 15
Mr. Freitag's corporate
commercial practice
embraces the electricity,
natural gas and water
sectors throughout
Canada. His experience
includes development
and financing of
projects and negotiating
underlying agreements
and regulatory approvals.
Mr. Furlan's project
finance and secured
lending practice services
lenders on PPP,
infrastructure and power
project financing. His
PPP experience includes
bridges and hospitals.
Mr. Fyfe focuses on the
tax implications of M&A,
corporate finance and
reorganizations. He acts
for public and private
developers of electricity
generation and other
infrastructure projects,
municipal corporations
and collective
investment funds.
Mr. Gagnon's
construction and surety
law practice embraces
infrastructure and
institutional projects,
including PPPs, and
focuses on contracts,
procurement, default
remedy and litigation.
He acts for owners,
surety companies,
engineers & contractors.
13-08-06 10:04 AM
