Q2 2010 league tables: BNP leads debt revival

In April this year, complexities around the bank financing for Slovakia’s D1 highway PPP showed how hard banks sometimes have to work in the current climate in order to try and ensure projects reach financial close.

It was announced that a consortium of 20 commercial banks supporting the deal had come together to guarantee €800 million of a €1 billion loan being provided by the European Investment Bank in order to keep financial close on schedule. Under its rules, the EIB is not allowed to lend more than €200 million for a project without the remaining portion being guaranteed.

Previously, the Slovakian government said it would guarantee the €800 million portion of the loan, traditionally covered by commercial banks, because there wasn’t enough liquidity in the market. It would still do so, but since the state guarantee needed to be cleared by the European Union, the banks decided to provide a ‘bridge’ guarantee to allow the deal to close without any further delays. Once the EU clears the state guarantee, it will replace the one being provided by commercial banks.

The deal in a way symbolises the current state of the infrastructure banking market. Things are happening – but they're not happening easily. There are still willing participants; deals are still (slowly) getting done, though there may be twists and turns; overall liquidity is slowly improving; confidence in committing to longer tenors is growing; and the pricing of debt is coming back more into line with historic norms after the extreme swings of the pre- and immediate post-Crisis period.

Among the 20 commercial banks involved in the Slovakia D1 project is BNP Paribas, which tops the InfrastructureInvestor Assets (www.iiassets.com) Q2 2010 league table for mandated lead arrangers. The bank committed almost $2.5 billion of loans to 18 infrastructure projects from 1 April to 30 June, representing a more than 11 percent share of the market overall.

Among the loans made by BNP Paribas in the second quarter were: a $52 million term loan as part of the refinancing of the Ausol motorway concession in southern Spain; a $113 million 19-year, 8 months term loan to the Eirgrid East West Interconnector project, connecting the Irish power system to the British electricity grid through undersea/underground cables; and a $62 million 7-year term loan in support of the Ruby natural gas transmission pipeline between Wyoming and Oregon.

InfrastructureInvestor Assets is InfrastructureInvestor’s companion database containing key transaction details on over 2,300 infrastructure projects across the globe that have commenced or have been financed since January 1, 2006. This includes full details of over 1,600 project loans and bonds related to these assets as well as real-time league tables of financial sponsors, lawyers and banks involved in infrastructure projects.