Clifford Capital, an infrastructure financing platform based in Singapore, has priced its fifth public infrastructure asset-backed securities (IABS) transaction worth US$508.3 million, its largest to date.
Bayfront Infrastructure Capital V (BIC V) is a wholly owned and newly incorporated distribution vehicle of Bayfront Infrastructure Management, a subsidiary of Clifford Capital that also includes the Asian Infrastructure Investment Bank (AIIB) as a shareholder.
Clifford Capital has now structured and placed five public IABS transactions totalling US$2.2 billion. Cumulatively since the initial BIC issuance in 2018, seven IABS tranches have received ratings upgrades from Moody’s, including most recently BIC III Class B and Class C notes in June 2024.
BIC V features a portfolio spread across 37 individual loans and bonds, 36 projects, 15 countries, and 10 industry subsectors. Among all IABS issued to date, BIC V has the highest proportion of sustainable assets, with an initial aggregate principal balance of US$218.4 million of eligible green and social assets, as defined under Bayfront’s sustainable finance framework, which represent 43.0% of the portfolio’s aggregate principal balance.
Five classes of notes (Class A1, Class A1- SU, Class B, Class C, and Class D) of US$482.8 million in aggregate principal amount were offered to institutional investors.
The Class A1, Class A1- SU, Class B and Class C notes (rated notes) are rated investment grade by Moody’s and will be listed on the Singapore Exchange. The Class D Notes benefit from a guarantee from GuarantCo, which is rated A1 by Moody’s and AA- by Fitch as of June 2024.
As the sponsor, Bayfront expects to retain all preference shares for alignment of interest with investors and to comply with the risk retention requirements in the European Union and the United Kingdom. BIM Asset Management will act as the collateral manager, as it has done for all IABS transactions since BIC II.
Sustainability tranche
The Class A1-SU notes represent the dedicated sustainability tranche, which is classified as a secured sustainability standard bond under the latest International Capital Market Association’s (ICMA) Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines.
The issuance saw demand from a variety of institutional investors spanning North and Southeast Asia, the Middle East and Europe. The order book for the rated notes closed at approximately US$1.4 billion, which represents an oversubscription rate of approximately 3.0x over the US$462.5 million of rated notes issued.
Citi and Standard Chartered Bank are the joint global coordinators, and Citi, MUFG, Natixis, OCBC, Société Générale, and Standard Chartered Bank are the joint bookrunners and joint lead managers.
“BIC V demonstrates the growing appetite from institutional investors for exposure to high-quality, diversified portfolios of infrastructure assets. This frees bank capital to be recycled back into infrastructure investment,” says Clifford Capital group chief executive officer Murli Maiya.
“I am particularly pleased that BIC V is our largest IABS issuance to date with a substantial sustainability tranche. Sustainable infrastructure development is one of the most exciting investment themes in the market today and Clifford Capital is well placed to support the development of those projects from origination to securitization.”
