Plenary Group has issued an A$450 million ($343 million; €316 million) bond for a healthcare PPP project in Melbourne, the first of its kind in Australia since the global financial crisis.
The PPP bond, which has a tenor of 24 years and a floating interest rate, is part of an A$1 billion refinancing package for the Victorian Comprehensive Cancer Center, which opened in July. The initial bank debt has now been wholly refinanced through the bond issuance and a new, 11.5-year bank loan tranche.
“The bond issue has been supported by some of the world’s largest fixed income investors alongside key local institutions,” said Paul Oppenheim, chief executive of Plenary Australia, in a statement. The company added that the largest contributions came from North America.
US groups TIAA, MassMutual and Canada’s Manulife had reportedly been in talks with Plenary to invest in the offshore tranche while Australian institutions, including IFM Investors, Hastings Funds Management and AustralianSuper, were interested in the domestic tranche.
TIAA and Hastings confirmed that they have invested in the bond. MassMutual could not be reached for comment. Manulife, IFM, AustralianSuper and Plenary had not responded to queries by press time.
Plenary said for the past nine years, the long-term PPP bond market “[had] lain dormant in Australia”. Debt has been relatively hard to secure for tenures longer than seven years, owing to the weak competition facing banks in the Aussie PPP market, it added.
VCCC is one of seven projects the developer has originated alongside Canadian pension fund CDPQ. In August, the institution agreed to acquire a 20 percent stake in Plenary for an undisclosed sum.