Herbies lands first mandate from Standard Chartered on Cairn refinancing

Herbert Smith and McGrigors have landed lead roles on the refinancing of a US$750m (£451m) debt facility for Scottish energy company Cairn Energy Hydrocarbons.

The facility will be underwritten by Standard Chartered Bank, marking the first time such a facility has been underwritten by a single bank rather than on a club basis since the start of the credit crunch.

Herbert Smith advised Standard Chartered along with fellow financier the International Finance Corporation (IFC). Project finance partner Adrian Cheng led the Herbert Smith team acting for Standard for the first time. The firm has previously advised the IFC on a US$1bn (£600m) loan facility for Cairn arranged in 2006.

Banking partner Iain Macauley led the McGrigors team acting for longstanding client Cairn.

The new deal will see this 2006 facility – supplied by Royal Bank of Scotland and the IFC – refinanced. It will fund the ongoing development of Cairn’s oilfields and pipeline in Rajasthan.

The transaction follows the clubbed US$2bn (£1.2bn) reserve-based facility for Tullow Oil, on which Herbert Smith acted for the lenders.

Cheng said: “This facility for Cairn and the Tullow financing demonstrate the banks’ continuing appetite for reserve-based lending in the post-credit crunch environment.”

Maclay Murray & Spens advised Standard Chartered on Scottish law, while Ogier advised on Jersey law and JSA provided Indian law advice.