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Aviva backs Milan Metro

The UK insurer’s investment is part of a €580m refinancing package closed by the project, the first to combine credit lines with a project bond in Italy.

Aviva Investors, the asset management arm of UK insurer Aviva, has invested €40 million in line 5 of the Milan Underground.

The liquidity injection is part of a €580 million debt package, comprising €430 million of bank debt and the issuance of a €150 million project bond, used to refinance the project. It is the first time a combination of credit lines and project bond financing has been used in the country, as provided for by a recent change in regulation aimed at channelling more international capital towards Italian infrastructure.

The bank debt was pooled from domestic and overseas lenders comprising Banca IMI, BBVA, BNP Paribas, Cassa Depositi e Prestiti, Crédit Agricole CIB, MPS, Natixis, Société Generale, UBI, and Unicredit. It matures in 2035. The project bond, which has a similar tenure, was entirely underwritten by institutional investors.

Line 5 of the Milan Underground, which links Bignami Parco Nord to San Siro Stadio, runs for 12.8 kilometres and crosses 19 stations. It began commercial operations yesterday, following the conclusion of works initiated in 2007.

The first section, stretching six kilometres and featuring seven stations, was inaugurated in February 2013. Two more stations, opened to the public in March last year, allowed for the interchange with Line 2 of the Milan Underground and the domestic railway system. With yesterday’s opening of the entire line, the total number of operational stations stands at 14.

Fully automated, the line is being built by a consortium led by Italian developer Astaldi which also comprises Ansaldo STS, AnsaldoBreda, Alstom Ferroviaria and ATM. Works on the five remaining stations are due to complete in November.

Aviva funded the investment via its European Secondary Infrastructure Credit Securitisation Vehicle, which closed in July 2013 on €425 million. Neither Astaldi nor Aviva replied to requests for further details on which institutions invested in the bond alongside the UK insurer before press time.