Meridiam, Cintra hit $3.6bn financial close for Virginia’s I-66

Spain’s Cintra and France’s Meridiam have closed financing for the Interstate 66 Outside the Beltway toll road project in Virginia, a public-private partnership requiring almost $3.6 billion in investment.

The developer and the fund manager, which together form the I-66 Express Mobility Partners consortium, have secured financing for the PPP after Virginia Department of Transportation selected their bid last November. In addition to a mix of commercial debt and federal government funding, Meridiam and Cintra have committed $1.5 billion of equity to the project.

The I-66 expansion will feature the construction of three new lanes in each direction along a stretch of highway between local Route 29, near Gainesville, and Interstate 495 in Northern Virginia. The project also calls for reconstructed interchanges, park and ride facilities with 4,000 new parking spaces, new transit options and a shared-use facility for pedestrians and cyclists.

Bank of America Merrill Lynch and Citibank arranged $737 million through the sale of private activity bonds, earning a 3.92 percent return. The earliest bonds to mature are due in 2047. The partnership also secured a $1.23 billion TIFIA loan maturing in 2057.

The partners have also committed a $500 million upfront payment to fund additional transportation improvements. They have also agreed to pay net value of $800 million for transit service along the highway and $350 million for other projects to improve the I-66.

Virginia announced in 2015 it would procure the I-66 expansion as a 50-year concession agreement with private-sector partners.

“The commonwealth put the new PPP law into action by closely evaluating risk and what would make the best business sense for the commonwealth,” VDOT Commissioner Charlie Kilpatrick said at the time.

Virginia’s transportation department selected Meridiam and Cintra last year after considering bids from a Transurban and Skanska partnership and a group including InfraRed Capital Partners, Isolux and Fluor.

The express lanes are scheduled to open in 2022.