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Allianz in £130m Northern Irish debt restructuring

The asset manager has backed the £250m DBFO2 road project, shortly after announcing the launch of its maiden UK infra debt fund.

Allianz Global Investors (AllianzGI), the investment unit of German insurer Allianz, has completed a restructuring of the financing package behind Northern Ireland’s DBFO2 public-private partnership (PPP).

The £250 million (€314 million; $429 million) project, which began construction in 2007 and has a 27-year maintenance period, involves building 38 kilometres of new road. These comprise 12 kilometres of new tracks on the A1 and four new junctions – completing the upgrade to dual carriageway of the road from Belfast to Dublin – as well as more than 20 kilometres of the A4 from Ballygawley to Dungannon.

The restructuring transaction saw AllianzGI acquire all of the bonds issued by Amey Lagan Roads Financial, the project company, amounting to a total value of around £130 million. The unit invested on behalf of third-party clients – including UK pension funds – as well as other Allianz Group entities.

“This restructuring puts the DBFO2 project, one of significant importance to the local community, on a sound financial footing. Road projects like this, and the M8, M73, M74 Scottish motorway improvements project we recently invested in, give institutional investors access to the long term, secure cash flows they need to match their equally long term liabilities,” commented Paul David, director of infrastructure debt at AllianzGI, in a statement.

The news comes just a day after Allianz launched its debut UK debt fund, which has a target of £500 million. Although the DBFO2 deal was funded via money the firm holds in separately managed accounts, Allianz says its profile is within the remit of the transaction universe the vehicle will be targeting in the near future.