Slaughter and May advised Drax on its refinancing

Slaughter and May advised Drax Group plc (“Drax”) on its refinancing which involved an issue by Drax’s indirect wholly owned subsidiary, Drax Finco plc, of £550 million senior secured notes and an amendment and restatement of its senior facilities agreement.

The notes consist of £350 million 4¼% Senior Secured Notes due 2022 and £200 million Senior Secured Floating Rate Notes due 2022. The notes are to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange.

The proceeds from the offering of the notes, together with cash on hand, will be used as part of a refinancing of Drax group’s existing debt. An amendment to the previous £400 million credit facility became effective on 5 May. Under the amendment, an aggregate principal amount of £350 million is available to Drax Corporate Limited.

Slaughter and May has also advised on the extension of Drax’s existing commodity trading facility, to include physical gas commodity trades in addition to the existing power and dark green spread facility. The extension of the commodity trading facility allows Drax to transact prescribed volumes of trades without the requirement to post collateral.

Slaughter and May worked on the Senior Secured Notes as an integrated team with Cravath, Swaine & Moore acting as U.S. counsel.