Fundraising

PEBBLE makes splash in Dutch prison deal

A variation of ING’s innovative debt platform was deployed as Zaanstad Penitentiary reached financial close.

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The Pi2 consortium – comprising Dutch construction firm Ballast Nedam and Dutch technical services business Royal Imtech – has achieved financial close for the €300 million Zaanstad Penitentiary project in the Netherlands.

Debt facilities of €195 million were brought together by a variation of ING’s PEBBLE debt “open source” platform which it launched as a way of trying to combine bank finance with long-term institutional investor funding.

PEBBLE uses a tripartite structure typically comprising an A note, a B loan and a construction revolving facility. While the A note is targeted primarily at the institutional investor market, the B loan is aimed at the banks.

In the case of Zaanstad, ING teamed up with fellow Dutch bank NIBC to deploy what it called a “PEBBLE-Commute” structure, a slight variation of the PEBBLE model. A source close to the deal said it was a smaller deal than PEBBLE would typically look to undertake and was being viewed as a kind of “beta test”.

The same source said this was likely to be the last public-private partnership (PPP) to reach financial close in the Netherlands in 2013, but that a strong deal flow was in the pipeline for next year which PEBBLE would be looking to exploit.

“This is an important step in the development of public-private partnerships in the Netherlands,” said Theo Bruijninckx, chief executive officer of Ballast Nedam, in a statement. “The market parties have shown themselves capable of attracting long-term capital through institutional investors.”

Zaanstad Penitentiary will be a new building on the Hoogtij industrial site in the Dutch town of Westzaan. It will serve as a detention centre and prison and will accommodate over 1,000 people. It is scheduled to open in 2016.

Pi2 has signed a DBFMO (design, build, finance, maintain, operate) contract with the Netherlands’ Government Buildings Agency over a 25-year period. Ballast Nedam is the sole shareholder of Pi2. It has a 65 percent stake and Royal Imtech has a 35 percent stake in the design, build, maintain, operate phase.