Morrison & Foerster Represents Japanese Bank on Project Finance Magazine's "Latin American Deal of the Year"

3/8/2005

MoFo News Item

Firm played key role in "unusually fast" Tuxpan V Power Project in Mexico; Latest in a series of major international project finance work for Morrison & Foerster


New York, March 7, 2005 The Project Finance practice at Morrison & Foerster LLP has been honored for its work on the $300 million Tuxpan V Power Project in Veracruz, Mexico, named "Latin American Deal of the Year" by Project Finance Magazine. This recognition is the latest for Morrison & Foerster’s growing International Project Finance group, which has been engaged in a variety of ambitious deals in the region.

In the $300 million Tuxpan V Power Project, Morrison & Foerster represented the largest lender and commercial loan guarantor, Japan Bank for International Cooperation. The Japanese government bank closed a facility loan agreement providing $126 million – approximately 42% of the total cost – in direct loans. The money will be used to build a combined-cycle, natural gas-fired power facility, with a capacity of approximately 495 megawatts. The project is part of Mexico’s ambitious plans to add 25,000 megawatts of generating capacity by 2012.

"We are pleased to see that our work in helping improve Mexico’s energy capacity has been commended by the project finance community," said William Megevick, a project finance partner in Morrison & Foerster’s NY office, who led the transaction team. "The demand for significant big-ticket construction infrastructure and development work in Mexico remains strong. We expect to continue playing a role in many comparable projects."

The financing for the Tuxpan V was singled out for the rapid pace with which it was completed. Unlike many such transactions that can limp along for years, the financing documents for Tuxpan V were signed less than six months after the Power Purchase Agreement was struck between Mexico’s national electric utility, Comisión Federal de Electricidad, and the Project Company.

"The fast-tracking of Tuxpan V proves that project finance does not have to be a protracted and painful process," said Mr. Megevick. "With focused sponsors, motivated lenders, experienced counsel and cooperative parties, the financing for projects can be completed in a short time frame, allowing construction to begin much sooner."

Morrison & Foerster’s work on Tuxpan V is the latest in a string of Project Finance transactions the firm has recently undertaken in Latin America.  The firm acted as project counsel on the Valladolid III power project in Mexico’s Yucatan peninsula that closed in December of 2004.  Morrison & Foerster attorneys also successfully represented Japan Bank for International Cooperation in the $616 million Tuxpan III and IV project that closed in 2003.  These high profile engagements led Project Finance International to call Morrison & Foerster "a formidable new competitor" in the region. The firm has represented many Japanese institutions that have shown a significant interest in Latin American project finance.

"Our team has shown remarkable skill and finesse in completing this transaction in virtually record time," said the head of the firm’s Project Finance practice, Michael Graffagna.  "We are pleased when the high profile projects we work on are recognized by a wider audience."

For more information about Project Finance Magazine’s Deal of the Year Award go to www.projectfinancemagazine.com.

 

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