Marguerite and Westbourne back €2.6bn Italian road PPP

The two firms invested €265m in a €1.57bn bond issuance, one of the largest ever on a European greenfield project.

Melbourne-based Westbourne Capital and the pan-European Marguerite Fund have invested in the €2.57 billion Pedemontana–Veneta highway PPP in northern Italy, contributing €225 million and €40 million respectively.

The project, which reached financial close last week, is financed in part through a €1.57 billion bond issuance, one of the largest ever for a European greenfield project. The project is being developed by a consortium comprising Fininc, an Italian firm holding a 51 percent stake, and Madrid-based Sacyr, which holds the remaining share.

The bond issuance by Superstrada Pedemontana Veneta, the concession company, included two tranches; €1.22 billion in senior bonds due in 2047 with a 5 percent coupon and €350 million in subordinated bonds, due in 2027 with an 8 percent coupon. Both Marguerite and Westbourne invested in the latter tranche.

The project will build 162km of roadway between the Vicenza and Treviso provinces, including two tunnels and 68km of secondary roadway. Superstrada Pedemontana Veneta will hold a 39-year concession on the roadway, with revenues generated by a combination of tolling and availability payments. The project also received €915 million in subsidies.

With this deal, its third highway investment, the €710 million Marguerite Fund is now fully invested. A collaboration of six European financial institutions including the European Investment Bank, the fund was launched in 2010 to make capital-intensive infrastructure investments in EU countries. Last month, Marguerite launched its second fund with around €700 million in commitments. Like its predecessor, the vehicle will focus on greenfield renewables, broadband and transport projects. The Marguerite Fund also made a series of exits last week, selling its stake in four renewables projects and one highway asset to London-based Pantheon Ventures.