broker coverage, page-36

Thanks raiderup for that WSJ article on LT financing, sorry it took me a week to read it. I liked this relevant passage:

"DJ: When did the project line up big customers, or off-takers, and did doing so create a certain level of comfort for the lenders?
Galvis: Securing long-term off-takers for the product was one of the strategies the project settled on early on. So the lenders knew there was a market there for the next 10-12 years. They knew as long as the project was built–and Antofagasta has the reputation for being able to build mines–the copper was going to ship and there was going to be an off taker at the other end.

DJ: How did you keep all the different lenders on the same page?
Galvis: One of the reasons this deal got done was that the decision was made very early on that, rather than being reactive, the legal and financial teams would work closely with the sponsors to develop a financing plan that would be acceptable to market. We actually drafted the papers in advance. It’s quite extraordinary. We drafted a 60-plus page detailed term sheet, which was sent out in order to select prospective lenders. The project was then able to say to the lenders, ‘We think we fit the market right on these terms, are you willing to participate under these terms?’ This was very important because it allowed us to get the financing done on a reasonable basis and with a disparate group of lenders and keep everyone on the same page with common terms and conditions. If each of the lenders had been supplying their own terms, that would have been very difficult. The selection of the lenders was based on their reaction to out proposal."