Macquarie, Cintra refinance Canadian toll road

407 ETR issued $500m of new senior notes due 2012 and will retire $400m of senior bonds due this year. The issuance indicates toll road operators' ability to refinance their assets despite a difficult credit environment and softening traffic figures tied to the overall economic slowdown.

Macquarie Infrastructure Group- (MIG) and Cintra-owned Canadian toll road 407 ETR has refinanced $400 million of senior bonds due this year by issuing $500 million of new senior notes.

Toll roads: able to
refinance

407 International, the holding company for the 407 ETR, agreed to issue $300 million of 4.65 percent senior notes due 20 January 2012 and $200 million of 5.10 percent senior notes due 20 January 2014. Post-issuance proceeds of $466 million will be used to refinance $400 million of senior notes due 27 July 2009.

The issuance indicates the toll road operators’ ability to refinance their assets despite a difficult credit environment and softening traffic figures tied to the overall economic slowdown.

Last month, MIG slashed the valuation of its portfolio of toll roads by 24 percent from its June 2008 levels due to macroeconomic conditions and the market environment.

Globally, MIG has a portfolio of 11 toll roads across seven countries, many of which, like the 407 ETR, it owns jointly with Cintra. MIG used to own 40 percent of the Spanish toll road developer, which is now owned by Spain’s Grupo Ferrovial.

In October 2004, MIG sold its interest in Cintra but negotiated a further direct stake in the 407 ETR, taking its total direct interest to 30 percent.

In related news, Cintra extended the terms and conditions on its Radial-4 toll road in Madrid. The debt, which will now mature in January 2011, amounts to €556.6 million.

A syndicate of 29 banks, including the European Investment Bank, are creditors for the debt.
Redial 4 is 55 percent owned by Cintra. Itinere, another Spanish toll road developer that is being acquired by Citi Infrastructure Investors for €7.9 billion, has a 25 percent interest in the road.