RBS attracts eight banks to Aussie road close

Royal Bank of Scotland has pulled together a club of eight banks to join it in reaching financial close for Bilfinger Berger’s €562m Peninsula Link – a 25-kilometre road near Melbourne. The deal reasserts RBS’ presence in the PPP market, after it was forced to scale back its activity when it ran into trouble following the financial crisis.

A club of nine banks, assembled by Royal Bank of Scotland (RBS), has reached financial close for Bilfinger Berger’s €562 million Peninsula Link, a 25-kilometre road near Melbourne.

The club, which is providing a debt package of about €484 million for the deal, comprises RBS together with: Australia and New Zealand Banking Group; National Australia Bank; BBVA; Bank of Ireland; Sumitomo Mitsui Banking Corporation; the Bank of Tokyo-Mitsubishi; Santander; and WestLB. Bilfinger Berger is providing one-third of the equity, or €26 million, with Australian superannuation funds such as Prime Super, a Victoria-based fund, providing the rest.

Geoff Daley, RBS’s head of infrastructure advisory, said the deal was already fully underwritten in late 2009 and did not require any state guarantees, unlike the recently closed €2 billion Victorian desalination plant. “Now, only six months later, we’ve delivered to the state a risk allocation in financing which has assisted the government to move the PPP market away from reliance on such support,” he said.

The move is timely and comes just as the Australian government has announced that it will pull a debt guarantee scheme at the end of the year which guaranteed debt raisings by states struggling to raise money for infrastructure projects.

Southern Way, the winning consortium comprising Bilfinger Berger, Abigroup and RBS, will hold the concession contract for 25 years. The project will receive availability payments from the government, a form of regulated public contribution based on certain contractual obligations. The road is expected to be open to the public in 2013.