Muskrat Falls Project Secures $5 Billion Global Bond Financing

The $5-billion global bond financing for the construction and development of the Muskrat Falls Hydroelectric Generating Facility and Labrador-Island Transmission Link to be built on the Lower Churchill River in Labrador was secured by Nalcor Energy on behalf of the issuing funding vehicles. Guaranteed by the Government of Canada, the $5-billion bond financing is the single largest infrastructure financing in Canadian history, and the $7.7-billion project is the most expensive capital works project in the history of the province of Newfoundland and Labrador.

The critical aspect of the financing was to structure the financing in order for the AAA credit rating of the Sovereign Guarantor to be transferred to the project's single purpose vehicles and that the pricing of the debt would very closely approximate that of the AAA Sovereign. The Sovereign Guarantee, tailored to satisfy the credit transference conditions of Moody's, S&P and DBRS, was explained to the rating agencies and was accepted by all three.

The facility will generate 824 MW of electricity, with 40 per cent of the generated power to be transported via subsea cable to Newfoundland and 20 per cent to be transported to Nova Scotia. The remaining 40 per cent of the generated power will be used for industrial purposes in Labrador or sold to other energy markets in Nova Scotia. Construction is underway and the project is expected to begin operation in 2017.

Nalcor Energy is a Newfoundland and Labrador Crown corporation and is developing the Muskrat Falls Hydroelectric Generating Facility and the Labrador-Island Transmission Link projects. 
TD Securities and Goldman Sachs co-underwrote the offering and were co-lead arrangers of the bonds, along with a syndicate of financial institutions.

McCarthy Tétrault LLP represented TD Securities and Goldman Sachs with a team led by Barry Ryan and including Linda Brown, Gordon Baird, Matthew Appleby, Andrew Parker, Seán O'Neill, Adam Barza, Peter Birkness, Jessica Bishop, Christopher Langdon, Justin Lapedus, Gabrielle Richards and David Woollcombe.

Fasken Martineau DuMoulin LLP was lead project finance counsel to Nalcor Energy with a team led by Xeno Martis (project finance, Montreal) and including Angela Onesi (project finance, Montreal), Félix Gutierrez (banking, Montreal), Jean Michel Lapierre (securities, Montreal), Helmut Johannsen (construction and commercial, Vancouver), David Manny (projects, London), David Little (commercial and projects, Vancouver), Daniel Picotte (commercial and projects, Montreal), Alain Ranger (tax, Montreal), Howard Carr (tax, Toronto), André Turmel (regulatory, Montreal), Ron Ezekiel (regulatory, Vancouver), Peter Feldberg (regulatory, Calgary), and Ian Cassie (real estate, Vancouver).

McInnes Cooper was lead Atlantic Canada counsel to Nalcor Energy with a team led by Tom Kendell, John Green, Joe Macdonald, Len Hoyt, Jamie Connolly, Dennis Clarke, Greg Connors, Jenny Gray, David MacDougall, Van Penick, George Cooper, Matt Clarke, James MacDuff, Henry Visser, Aidan Meade, Nick Whalen, Adrienne Mercer and Meghan Felt.

Cassels Brock & Blackwell LLP represented the Government of Canada with a team including Alison Manzer, Charles Newman, Peter Sullivan, Jennifer Wasylyk, Joshua Calderon, Sarah McKinnon and Suhuyini Abudulai (financial services); Jonathan Freeman (real estate) and Brian Dominique (regulatory).

The Department of Justice was represented by Anne Boudreau and Rhonda Lazarus.

Emera, an investor in the Labrador Island Link, was represented in-house by Lewis Smith and John Maclean. External representation to Emera was provided by Cox & Palmer in St. Johns with a team including Shawn Kavanagh, Doug Wright and Alexander MacDonald.


Félix Gutierrez Helmut K. Johannsen Anne Boudreau Angela Onesi Justin A. Lapedus Peter J. Sullivan John M. Green David W. Little Charles Newman Linda G. Brown Lewis T. Smith James A. MacDuff Thomas R. Kendell David S. MacDougall George T.H. Cooper Nicholas J. Whalen Adrienne Mercer Xeno C. Martis Henry A. Visser David Manny Aidan J. Meade Suhuyini Abudulai Adam M. Barza Gregory J. Connors David E. Woollcombe W. Ian Cassie André Turmel Leonard T. Hoyt Christopher W. Langdon Gordon D. Baird Jean Michel Lapierre John R. MacLean Seán C. O'Neill Daniel Picotte Matthew Appleby Shawn M. Kavanagh Rhonda Lazarus Alain Ranger Matthew J. Clarke Alison R. Manzer Alexander (Sandy) MacDonald Howard M. Carr Jonathan Freeman Jennifer L. Gray Dennis N. Clarke Ron Ezekiel Brian P. Dominique Douglas Wright Jaime O. Connolly Andrew C. Parker