News & Analysis

Syndication ‘imminent’ for Nottingham tram PFI

Four banks which signed more than £421m of senior debt facilities in support of the NET 2 Nottingham tram PFI are poised to launch a syndication process targeting a ‘select group of banks’.

By
Andy Thomson
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A “select group of banks” is being targeted for a syndication of debt facilities that were signed in support of the UK’s £570 million (€689 million; $873 million) Nottingham Express Transit Phase TWO (NET 2) Private Finance Initiative (PFI) in December. The syndication is “launching imminently” according to a press release from Credit Agricole Corporate & Investment Bank (London).

Credit Agricole is one of four bookrunners which signed a £421.24 million senior facility financing last month – the others being Banco Bilbao Vizcaya Argentaria (London), The Bank of Tokyo-Mitsubishi UFJ and The Royal Bank of Scotland.

The debt package comprises the following senior facilities: a senior commercial loan facility worth £211.24 million over 18.25 years (paying 280 basis points over the first seven years and 290 basis points over the remainder); a senior capital contribution facility worth £100 million over four years (paying 280 points); and a European Investment Bank loan facility over 18 years worth £110 million.

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The NET 2 project, which was tendered by Nottingham City Council under a 22.25-year PFI concession agreement, involves the construction over three years of two new lines extending the existing 14.5-kilometre Nottingham light rail system to the suburban areas of Chilwell and Clifton.

Financial close for the project was announced just before Christmas, with the winning Tramlink Nottingham consortium comprising Meridiam Infrastructure (30 percent); OFI Infravia (20 percent); Vinci Investments (12.5 percent); Alstom (12.5 percent); Keolis (12.5 percent); and Wellglade (12.5 percent). The equity sponsors are writing a £96 million cheque. 

NET 2 should be up and running by the end of 2014. Tramlink Nottingham had been selected as the preferred bidder for the extension contract in March. The first part of the network cost around £200 million to build and has been operational since 2004. It was also awarded to the private sector under a 30-year plus PFI contract.