CFA Quebec: Alternatives Investment Forum 2019 - March 21st, 2019
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CFA Quebec: Alternatives Investment Forum
2019
March 21st, 2019
Disclaimer Figures as at February 28, 2019 This document, including the information embodied herein, is proprietary and confidential to Stonebridge Financial Corporation. This document is not to be reproduced, copied or transmitted in whole or in part without the express written permission of Stonebridge Financial Corporation. Nor is the information embodied herein to be disclosed to any other person without such permission, nor is it to be used in any manner inconsistent with the express purpose for which this document has been provided. The document is to be returned to Stonebridge Financial Corporation upon request. Certain of the information set forth in this document has been taken from publicly available sources and has not been confirmed by, nor is any responsibility for such information assumed by Stonebridge Financial Corporation. This confidential document has been prepared for informational purposes only. Stonebridge Financial Corporation does not make any express or implied representation or warranty as to the accuracy or completeness of the information contained herein and expressly disclaim any and all liability which may be based on such information, errors therein or omissions therefrom. This document is not an offering memorandum and no offer to sell securities is made pursuant to this document. An offer to sell securities, if any, will be made only by way of execution and delivery of a definitive subscription agreement and limited partnership agreement. 2
Government Procurement Models Figures as at February 28, 2019
Canadian PPPs and Energy procurement models
Government Government Construction Long Term Construction Construction
Financing Financing Risk Debt Risk Risk
Financing Financing Financing
(repaid by (repaid by (repaid by
government via government via government via
Construction Construction Construction
Progress Progress Progress
Payments and Payments and Payments and
Substantial Substantial Substantial
Completion Completion Completion
Payments) Payments) Payments)
Long Term
Debt
CIB
Investment
Equity Long Term
Debt
Equity Equity
Design Build Finance Design Build Finance DBFOM + Usage &
Design Build Finance
Design Bid Build Design Build Operate & Maintain Operate & Maintain Revenue
Social Infrastructure
Energy & Small PPP Large PPP Large PPP
3
Sample Transaction – Large Canadian Infrastructure Figures as at February 28, 2019
Gordie Howe International Bridge
The Gordie Howe International Bridge, previously known as the Detroit River International Crossing, was awarded to a private consortium, Bridge North America
General Partnership, in late summer 2018. The crossing will have six lanes in total with a multi-use pathway for pedestrians and cyclists. Construction started in
October 2018 and will take about 74 months. Construction is expected to cost $3.8 billion and is funded as follows:
Sources of Funds $M %
Progress Payments - Government 2,740.0. 72.1%
Substantial Completion Payment - Government 483.4. 12.7%
Monthly Payments - Government 37.5. 0.9%
Total Government Funding. 3,260.9. 85.8%
Private Debt Sector 446.3 11.7%
Equity 93. 2.4%
Total Funding. 3,800.2.
Note: Amounts are rounded and based on public information. Actual amounts may differ.
Excludes senior construction bridge facility for $587M that was repaid at Substantial
Completion.
The private placement comprised of two bonds as follows:
Series A Bonds Series B Bonds
Issue Date September 2018
Issuer Bridging North America General Partnership
Form of Offering Private placement in Canada and the U.S.
Project Design, build, finance, operate, maintain and rehabilitate a cross border cable stayed bridge and associated Canadian and US
POEs and design and construct the Michigan Interchange
Credit Rating A- (S&P) A- (S&P)
Principal Amount CAD $157M CAD $289.3 M
Maturity Date May 31, 2038 August 31, 2053
Average Life 13.30 years 26.23 years
Mod. Duration 10.4 15.8
Spread (Issued) 145 bps 167 bps
Spread (as of 03/14/19) 146 bps 163 bps
4
Sample Transaction – Social Infrastructure, Long Term Care Figures as at February 28, 2019
CHSLD Age3
Inception Date: March 10, 2017
Maturity Date: February 28, 2042
Project: Refinancing of 2 existing long term care facilities (i) CHSLD St. Jude: a
204 bed long term care facility located in Laval, Quebec, and (ii)CHSLD
Saint-Vincent-Marie: a 66 bed long term care facility located in
Montreal, Quebec.
Source of Revenue: Ministère de la Santé et des Services sociaux
Project Costs: $46,079,520.16
Debt Amount: $31,000,000
Mod. Duration: 9.74
Average Life: 15.06 years
5
Sample Transaction – Renewable Energy, Hydro Figures as at February 28, 2019
Hydro Canyon Saint-Joachim
Inception Date: May 1, 2015
Maturity Date: November 30, 2036
Project: A 23.2 MW run-of-river hydroelectric project near the Saint-Anne
Falls on the Sainte-Anne River. The project sells power to Hydro-
Québec Distribution under a 20-year power purchase agreement,
with an option to renew for another 20-year period.
Source of Revenue: Hydro-Quebec
Project Costs: $64,223,950
Debt Amount: $57,800,000
Mod. Duration: 10.14
Average Life: 14.26 years
6Sample Transaction – Renewable Energy, Solar Figures as at February 28, 2019
MOM Solar
Inception Date: June 1, 2016
Maturity Date: September 30, 2032
Project: Refinancing of a portfolio of 24 operating rooftop solar projects (total
capacity of 7.8 MW-AC), each selling power to the Independent
Electric System Operator under an Ontario Feed-In Tariff Contract.
Source of Revenue: Independent Electric System Operator
Project Costs: $63,327,082
Debt Amount: $45,000,000
Mod. Duration: 10.06
Average Life: 12.50 years
7Transactions with First Nations Figures as at February 28, 2019 First Nations Transaction Overview Stonebridge contributed to the realization of twelve (12) transactions with a total project size of $603.5 million. Stonebridge Infrastructure Debt Funds, provided $171 million of the $439 million senior debt needed to finance these projects. 8
Sample Transactions – First Nations Figures as at February 28, 2019
Renewable energy
Hydro Solar
Inception Date: September 18, 2015
Inception Date: September 15, 2015 Maturity Date: December 31, 2055
Maturity Date: December 31, 2049 A 10.0 MW run-of-river hydroelectric
Refinancing of a 6 MW run of the river project on the Namewaminikan River in
hydroelectric project located on the the Municipality of Greenstone in
Canoe Creek watershed on the West Project: Northern Ontario, on the eastern shore
Coast of Vancouver Island, BC. The of Lake Nipigon. The project sells power
Project: Project sells power to British Columbia to the IESO under a 40-year Feed-In-Tariff
Hydro and Power Authority under a contract.
power purchase agreement with a
First Nations: Animbiigoo Zaagi’igan Anishinaabek,
remaining term of 35 years.
Biinjitiwaabik Zaaging Anishinaabek, &
Bingwi Neyaashi Anishinaabek First
First Nations: Tla-o-qui-aht First Nation Nations
Source of Revenue: BC Hydro Source of Revenue: Independent Electric System Operator
Project Costs: $16,972,495 (EV) Project Costs: $66,670,000
9SIDF I & II – Performance Breakdown Figures as at February 28, 2019
Performance Analysis
400
350
300
250 All projects are
Government-
backed
200 (Weighted Avg.
Spread 292 bps)
150
100
50
-
Never
experienced
a loss
Average Provincial Bonds Infrastructure Energy A Corporate
Consistently generated attractive spread over comparable Provincial Bonds: on average over 200 bps
10Figures as at February 28, 2019
Appendix
11Overview
Stonebridge Financial Corporation, founded in 1998, is an asset manager, debt arranger and financial advisor in the Canadian private debt
sector.
The co-founders Denis Bourassa, Co-Executive Chairman and Co-Chief Executive Officer, and Robert Colliver, Co-Executive Chairman, are co-
owners.
With 24 employees and offices in Toronto, Oakville and Montréal, Stonebridge is comprised of four main business units:
• Investment Management: currently manages CAN$772 million in committed capital for Stonebridge Infrastructure Debt Fund I L.P.,
Stonebridge Infrastructure Debt Fund II L.P., and two separately managed accounts;
• Project Financing: successfully syndicated over 160 project finance transactions totalling $3.9 billion in private project finance debt;
• Bulk Lease Financing: advanced CAN$2.56 billion in lease financing and currently $443.0 million under administration;
[1] Since October 1st, 2013, the Leasing unit operates as Stonebridge Lease Financing Corporation, an affiliate of Stonebridge.
• Portfolio Administrative Services: administers CAN$3.3 billion in private debt. This amount is comprised of CAN$2.1 billion in private
project finance debt administered on behalf of Canadian life insurance companies, pension funds and other institutional investors,
CAN$772 million in fully discretionary assets managed by the investment management unit and CAD$443 million managed by the bulk
lease financing unit.
Stonebridge started with the support of three LifeCos (Maritime Life now Manulife, Canada Life now Great West Life and Industrial Alliance).
Stonebridge is registered as a portfolio manager, exempt market dealer and investment fund manager. Stonebridge is regulated by the Ontario
Securities Commission.
Arranger, financial advisor and asset manager in the Canadian private debt sector
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