Allens Arthur Robinson (Allens) is acting for the National Australia Bank Limited (NAB) in its role as private sector project financier of the South East Queensland Schools Public Private Partnership Project, the initiative that will see seven new state schools built in high-growth areas of South East Queensland, and involves the first use of the 'supported debt model' developed by Queensland Treasury.

This model was devised to lower the overall cost of debt for PPPs by having Queensland Treasury Corporation (QTC) agree to provide the 'risk free' portion of the funding for the operating phase of the Project, which was assessed to be around 70 per cent of the capital cost.

Financial close comes after the Aspire Schools consortium, comprising the Commonwealth Bank of Australia and Leighton Infrastructure Investment Limited groups, was awarded a contract to develop and maintain the SEQ Public Private Partnership (PPP) Schools project.

Allens acted for NAB in its capacities as Senior Construction Lender, Subordinated Lender (Construction and Operating phases), Working Capital Provider, Swap Bank, Facility Agent and Security Trustee.

Allens brought together a team from Sydney and Brisbane, with Partners Phillip Cornwell and Alan Millhouse leading on the deal, supported by Senior Associates Alexander Danne and Karla Fraser and lawyers Jason Hitch and Mary-Frances Murphy.

Allens advised NAB on the novel supported debt model which involved complicated intercreditor issues. The documents may be expected to set the market precedent for future transactions using this model.

According to Mr Cornwell: 'This deal comes at an important time when the Queensland Government is focusing its efforts on promoting infrastructure and encouraging private sector investment in PPPs across the state. Considering the complexities and the impact of the global financial crisis, the transaction closed on 29 May 2009 quickly after the award of exclusivity in early March 2009.

'This first use of the supported debt model will help pave the way for future PPPs with government co-finance which will now have the benefit of a market precedent structure.'