Morgan Stanley's work on the May 14 $1.2bn financing for the repowering of the Topaz Power Portfolio took Project Finance magazine North America Portfolio Power Deal of the Year 2008. Morgan Stanley structured the deal and was the left-lead bank in the financing. The award appears in the March 2009 issue.

The transaction financed the repowering of ~1,900mw of gas-fired generation assets in Texas and represents the first financing Morgan Stanley has executed with Riverstone, the sponsor of Topaz.

Noting that it was the most complex power financing to come to market in 2008, the editors said the deal serves "as probably the best guide to how to get a deal done in 2009."

The transaction, which took place during extremely tight credit conditions, was a cross-divisional effort involving Global Capital Markets, Commodities and Investment Banking. As part of the transaction Commodities provided a physical toll - physically delivering gas and taking power - on the assets through 2014. The Corporate Derivatives Group led the execution of the interest rate hedge for the financing. GCM led the syndication of $740mn of bank facilities for Topaz.

In a move that prefigured the market's shift to club-style underwriting, Morgan Stanley - which held $75mn of the loans - brought in commercial banks Dexia Credit Local, ING Capital and Natixis as lead arrangers and underwriters to share the syndication risk. Prior to launch of retail syndication, WestLB, Caylon, GE Capital and Union Bank of California were included in the syndicate.

"The banks were the loudest in demanding that the portfolio's output be hedged," noted the editors.

In addition, Commodities will optimize the different features in Topaz's asset portfolio through trading, scheduling and delivering both physical power and physical gas in the spot markets.