Metlife leads I-595 refinancing

Florida's I-595 has secured an oversubscribed refinancing seven years after financial close, showing that the US' first availability-payment concession and the state's maiden public-private partnership (PPP; P3) retains strong following among infrastructure investors.

Metlife and its private placement clients, through a $213 million investment in senior secured notes, soaked up more than one quarter of the total $827 million offering. 

The notes were priced 155 basis points over a seven-year US Treasury bond, with an interest rate of 3.31 percent. With an average lifespan of seven years, they will reach final maturity in 2031.

The offering brought 15 investors to the table, including Metlife and its private placement clients. According to a Metlife statement, the proceeds will be used to retire a portion of the project's outstanding debt and for repayment of loans. 

Signed in 2008, the contract called for Spanish developer ACS to make improvements to the existing highway by adding three tolled express lanes with rates controlled by the state, building a new entrance and exit ramps, and complete construction on several adjacent projects. In return, the state would pay the company a lump sum of $685 million once construction was completed, followed by $64 million each year for the duration of the 30-year operations and maintenance phase. 

In mid-2011 ACS began expressing interest in offloading its stake in the project as part of a broader strategy to reduce overall company debt. US asset manager Teachers Insurance and Annuity Association of America ( TIAA-CREF) met ACS halfway, buying out half of its stake for €588 million ($645 million) in October of that same year. 

Extrapolating on these figures, the total debt and equity investment on the I-595 P3 to date is just north of $2.1 billion. By the end of the contract term the state of Florida will have paid around $2.6 billion for the project. 

Macquarie Capital's Chris Voyce, who advised ACS on the refinancing, was promoted to executive director as a result.