Manchester Airport Group (MAG), the operator of Manchester, London Stansted, East Midlands and Bournemouth airports, has completed its debut bond offering in the UK capital markets.
The group issued a £450 million (€549 million; $752 million), 20-year bond, through an offering it described as four times oversubscribed at around £2 billion. The bonds have an annual coupon of 4.75 percent.
The proceeds of the transaction will be used to repay bank debt MAG took on when purchasing Stansted Airport in February 2013. The deal saw IFM Investors, the Australian fund manager, become a shareholder in the group to support the £1.5 billion acquisition.
IFM and Manchester City Council now own 35.5 percent of MAG each, while the other nine councils of Greater Manchester share the remaining 29 percent.
Andrew Paulson, managing director of debt capital markets at RBS, noted that buyers of the bond included insurers, pension funds and asset managers from the UK, Europe and Asia. “Investors were attracted to MAG’s strong business profile and successful track record of asset stewardship,” he said.
RBS acted as arranger and adviser on the issue, while Bank of America Merrill Lynch, Barclays, HSBC and RBS were mandated as book runners.
The transaction is a further indication of the growing popularity of capital markets for infrastructure asset managers, which have tapped investor appetite for yield and liquidity to refinance more traditional forms of debt.
It comes less than a month after Heathrow Airport Holdings, the UK airport operator owned by Spain’s Ferrovial, successfully placed £200 million of inflation-linked bonds.
The bond issued by MAG has a senior secured structure similar to those of other UK airport companies, according to a statement issued by the group.