Chicago Skyway deal reaches financial close

The Chicago Skyway has officially changed hands for the first time since it was first privatised in 2005 with three Canadian pension funds reaching financial close on the $2.8 billion deal announced last November.

With the closing of the transaction, the Canada Pension Plan Investment Board (CPPIB), Ontario Municipal Employees Retirement System (OMERS) and Ontario Teachers’ Pension Plan (OTPP) each acquire a 33.33 percent stake – paying $512 million each – in the Skyway Concession Company (SCC), which will continue to operate and maintain the 7.8-mile toll road under the original 99-year lease agreement.

Spain’s Cintra teamed up with Macquarie Group (via Macquarie Atlas and Macquarie Infrastructure) to assume operation of the Skyway in January 2005 following what was the first privatisation of an existing toll road in the US. Under the terms of the original agreement, for which Cintra and Macquarie paid $1.83 billion, SCC is responsible for all operating and maintenance costs of the Skyway but has the right to all toll and concession revenue.

According to reports, the Canadian pensions also paid an additional $28 million to the City of Chicago, slightly higher than the $21 million Chicago Mayor Rahm Emanuel had requested, in the form of a real property transfer tax.

While CPPIB and OTPP confirmed the financial close of the transaction, both declined to comment further. OMERS and Emanuel’s office had not responded to a request for comment by press time.

The Chicago Skyway is a critical infrastructure asset in the US Midwest region as it connects Interstate-94 (I-94) – also known as the Dan Ryan Expressway – in Chicago to the Indiana Toll Road (I-90). Built in 1958, the asset includes a 3.5-mile elevated mainline structure crossing the Calumet River. The Skyway Concession contract expires in 2104.