Bayfront Infrastructure Management Pte. Ltd. (“Bayfront”) is a Singapore-based platform with a mandate to invest in and distribute project and infrastructure debt. Bayfront was established in 2019 in connection with the Infrastructure Take-Out Facility initiative sponsored by the Government of Singapore; key ultimate shareholders of Bayfront include Temasek and AIIB, among others.
Bayfront seeks to address the large infrastructure financing gap in Asia and the Middle East by mobilizing institutional capital for project and infrastructure debt through issuance of Infrastructure Asset Backed Securities (“IABS”).
Bayfront sought to issue their 3rd securitization of project and infrastructure loans by Bayfront Infrastructure Capital III Pte. Ltd in 2022. The issuance of IABS notes was backed by 28 senior secured project and infrastructure loans, diversified across 13 countries and 8 industry sub-sectors.
Investor marketing and pricing took place in Q2-Q3 2022, a time of high volatility in the credit markets. Spreads on comparable products were significantly wider than they had been in the past, making it crucial to arrive at the optimal capital structure that would maximize investor demand while achieving the tightest pricing possible.
Citi drove structuring efforts by engaging with Moody’s to rate the underlying assets and derive the optimal capital structure for the notes. This process involved multiple iterations with different combinations of assets and liabilities, but was critical in arriving at the most efficient capital structure.
Citi also led extensive investor education, pre-marketing, and marketing efforts across APAC, Europe, and the Middle East. Citi also engaged with corporate investors, ultimately leading to an Asian corporate investor participating in the Class C Notes.
The transaction announced on September 9th, 2022 with indication of interest for each of the classes. By pricing date on September 15th, orders totalled over $465mm, featuring notable sponsorship from high quality institutional buyers including banks, insurers, asset managers, and corporates from around the globe. Singaporean investor participation was also strong.
Class A and Class B Notes priced 65-75bps tighter than comparable US BSL CLOs, demonstrating investor recognition of the strong credit quality of the underlying asset portfolio and confidence in Bayfront’s sector expertise.
Bayfront was able to solidify its issuance program and diversify their investor base even during stressed market conditions: one-third of investors (by count) had not participated in Bayfront’s previous IABS issuances, including the largest allocated investor.
Citi played a pivotal role in the marketing and bookbuilding process, bringing in a number of new investors and confirming early anchor interest. Citi brought in over 65% of the final orderbook, including the first ever corporate investor in Bayfront’s 3 IABS issuances with crucial implications to the overall success of the transaction.