EFTA Document EFTA01433961

Subject: RE: RIN follow up From: Vahe Stepanian Date: Thu, 19 Apr 2018 17:53:03 -0400 To: Paul Barrett Cc: Stewart Oldfield Paul- Apologies for the delayed response — had a bit of a crazy day here. Answers to your questions: Are the loans on completed infrastructure projects or more like construction loans? o The RIN team is focused on investing in loans secured by operational infrastructure projects. RIN II will have concentration limitations that require 85% of the portfolio to be comprised of loans secured by operating assets. For reference, there are 3 loans currently in RIN I's portfolio that are either (i) greenfield construction or (ii) have a large brownfield expansion underway and comprise —12% of RIN I's portfolio as of today. Although these loans have do have some construction risk, we believe that these risks have been well mitigated as described in the table below. Loan Nature of Construction Construction Risk Mitigants Cheniere Energy (SPLNG,CCTP) Assets includes operational pipeline, 4 operational LNG terminals, and 1 re- gasification/storage terminal. 1 additional LNG terminal under construction and another under consideration. Lump-sum, fixed-price, turnkey EPC Contracts for the construction with Bechtel, a premier engineering, construction and project management companies The EPC Contracts include liquidated-damage provisions requiring performing within 95% of design specifications and 18-month defect liability provisions and are guaranteed by Bechtel Global (entity that includes Bechtel's oil, gas, chemicals, power & communications businesses) EFTA01433961 Project uses proven and leading liquefaction tech (ConocoPhillips Optimized Cascade Process) Bechtel has built one-third of the world's liquefaction plants, is currently ahead of the guaranteed construction schedule for the first four trains of (with the first two trains complete), and previously built the Sponsor's existing regasification facilities at the Sabine Pass LNG terminal on time and within budget. Bechtel has never been called to pay delay or performance Liquidated Damages Elba The project is an expansion of an existing facility — infrastructure interconnections and LNG storage tanks are already in place. The Project's construction is currently 35% complete. Fixed price, lump sum, date-certain EPC Contract with delay Liquidated Damages. Backstopped by parent guaranty from IHI (Japanese Corp Rating of A-) for full payment and performance and letter of credit for 12.5% of contract price EPC work is generally mechanical in nature and IHI is a reputable and experienced EPC Contractor (worked on other LNG projects worldwide, including Gulf LNG, Cove Point, Adriatic LNG, and more) The Project has a budgeted contingency of $41.7 million and a key Kinder Morgan (joint owner) subsidiary has pledged to fund an additional $68.0 million in cost overruns, with no dilution to the Borrower. Kinder Morgan and the Borrower are committed to providing an additional $62.6 million on a pro rata basis, resulting in a total contingency amount of $172.3 million, well above the independent engineer's identified target amount of $86.5 million Sasol Chemicals Project is an expansion of an existing petrochemical complex that currently generates EBITDA. The Borrower is constructing an additional petrochemical complex on the Westlake site called the Lake Charles Chemicals Project, which is 80% complete EFTA01433962 The Borrowers parent, Sasol, (rated Baa2/BBB-) has provided a completion guarantee The credit agreement limits the Secured Debt to Equity Ratio to 60:40, which equates to a minimum equity contribution from Sasol of —$4.4 billion How do we have recourse on an essential infrastructure asset? o —98.4% of RIN I's portfolio is comprised of senior secured loan obligations. These loans' security packages typically include the assets and equity owned by the borrower. I've also attached a copy of the PPM here, which I think will be helpful as you continue to dig in. Note it is watermarked for Alpha Group. Happy to answer additional questions. Best, Vahe From: Paul Barrett [mailto: Sent: Thursday, April 19, 2018 12:00 PM To: Stewart Oldfield Cc: Vahe Stepanian Subject: RE: RIN follow up Stu EFTA01433963 2 questions for the team: Are the loans on completed infrastructure projects or more like construction loans? How do we have recourse on an essential infrastructure asset? Thanks Paul Paul Barrett Alpha Group Capital LLC 142 W 57th Street, 11th Floor, New York, NY 10019 (o) (c) From: Stewart Oldfield ‹ > Sent: Tuesday, April 17, 2018 10:00 AM To: Paul Barrett <I MIMM > Subject: RE: RIN follow up Just tried you. I'm around all day. Thanks EFTA01433964 From: Paul Barrett [mailto: Sent: Monday, April 16, 2018 7:45 PM To: Stewart Oldfield > Cc: Vahe Stepanian Subject: Re: RIN follow up Let's chat tomorrow morning. Paul Barrett Alpha Group Capital LLC 142 W 57th Street, 11th Floor, New York, NY 10019 (o) (c) On Apr 16, 2018, at 6:11 PM, Stewart Oldfield wrote: Paul, Please let us know when it makes sense to follow up next on RIN. I'd also like to chat a bit about your inventory finance trade when you have a few minutes. Hope all is well, Stew <image001.png> EFTA01433965 Stewart Oldfield, CFA, CAIA Director Deutsche Bank Trust Company Americas Deutsche Bank Wealth Management 345 Park Avenue, New York, NY 10154 Tel. Mobile Email Securities offered through Deutsche Bank Securities Inc. This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Please refer to https://db.com/disclosures for additional EU corporate and regulatory disclosures. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Please refer to https://db.com/disclosures for additional EU corporate and regulatory disclosures. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication EFTA01433966 in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Please refer to https://db.com/disclosures for additional EU corporate and regulatory disclosures. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01433967