Weekly Closer: Transport leads the way

Led by two megadeals, the transportation sector dominated in terms of both value and volume this week with a total deal value of more than $5.7 billion coming from eight financial closes.

Social infrastructure made its strongest showing yet, with five of seven deals reporting financial results, bringing the value of those projects to $692.8 million. Renewables saw seven closes as well, with the four of those to report financial details valued at $368.08 million. The energy sector saw a single deal closed in Latin America, though details of that transaction remain to be reported.

By geography, Western Europe was home to nine deals; the Middle East and Africa to six; Asia-Pacific and Latin America to three each; and North America saw two deals close this week.

Transportation | Total Weekly Deal Value – $5.7 billion

By far the largest deal of the week to reach financial close was the $2.89 billion (€2.6 billion) Pedemontana Lombarda Toll Road PPP Refinancing in Italy. Ashurst advised a club of underwriters in the issuance of a $222.32 million loan for the project, with participants including Banca IMI, Banca Popolare Di Milano, Gruppo UBI Banca, Intesa Sanpaolo, MPS Capital Services Banca Per I Impressa and Unicredit, according to IIassets.com.

The second – and only other – mega-deal of the week was the Kansai and Osaka International Airport PPP Project. Sponsored by Orix and Vinci Airports, the $1.68 million greenfield project closed on 1 March with the aid of financing from underwriters Mizuho and Sumitomo Mitsui Banking Corp. MHBK acted as facility agent in the transaction and SMBC as security agent. Clifford Chance advised the borrowers.

In Colombia, the $648 million Pacifico 3 Highway PPP Project was able to reach financial close after Goldman Sachs successfully led a $260 million bond raise that closed last week. Arup advised the lenders’ decision-making and deal-structuring process, according to IIassets.com. Holland & Knight advised Financiera de Desarrollo Nacional (FDN) bank.

The Japan International Cooperation Agency (JICA) and the government of the Arab Republic of Egypt reached close on the Borg El Arab International Airport Extension PPP Project on 1 March. The $161.2 million project calls for the construction of a new passenger terminal along with the expansion and development of incidental facilities. The deal was made possible through a loan from JICA with an interest rate of 0.1 percent over 40 years plus a 10-year grace period.

It was reported this week that John Laing Infrastructure Fund acquired a 40 percent stake in the Barcelona Line 9 Section II Metro Project from Iridium Concesiones de Infraestructuras on 28 January for $121.56 million. Line 9 runs directly through the centre of Barcelona, connecting the city’s airport to the port district.

With financial advice from Ernst & Young Global, NCC Infrastructure and Soma Enterprise completed the sale of their 38 percent stake in the Bangalore Elevated PPP Tollway for $109.41 million on 24 February to IDFC Alternatives’ India Infrastructure Fund II (IIF II). The fund now owns a 76 percent majority stake in the project.

The Kuwait Fund for Arab Economic Development signed a $75.87 million loan agreement for the financing of the Moshoeshoe I International Airport Improvement PPP Project on 22 February. The 22-year loan includes a grace period of 5 years. It will be amortised in 34 semi-annual payments with an interest rate of 1.5 percent per annum in addition to 0.5 percent per annum to cover administrative expenses. 

The borrower also intends to obtain additional financing from the Fund for Project Loans from the Arab Bank for Economic Development in Africa (to cover 15.5 percent of project costs), the Saudi Development Fund (13 percent), the OPEC Fund for International Development (15.5 percent, Abu Dhabi Fund for Development (19 percent). All remaining project costs will be covered by the government of Lesotho.

In the final transportation deal to report close details this week, The Nordic Investment Bank was reported to have provided a 10-year loan in the amount of $18.93 million to finance the Copenhagen Airports Pier C Expansion Project, with the transaction reaching close on 9 February.

Social Infrastructure | Total Weekly Deal Value – $692 million 

Leading a robust week of social infrastructure deals is the 23 February financial close of the $294.58 million YDA Group-sponsored Konya Karatay Integrated Health Campus PPP Project. The project to develop an 838-bed hospital carries a debt-to-equity ratio of 75/25 percent with $163.96 million provided through a loan from The European Bank for Reconstruction and Development (EBRD), Siemens Financial Services and Unicredit. Along with EBRD, multilateral support for the project comes from the Black Sea Trade and Development Bank and the Islamic Development Bank, the latter two of which are providing parallel financing of €50 million and €67.5 million, respectively.

For $208.8 million, Hunt Companies acquired a 100-percent ownership stake in Forest City Enterprises’ military housing business, FCMC, which comprises more than 30 unique US-located military housing communities.

It was reported this week that the $58.38 million National Referral Hospital PPP Project reached close on 19 February with a 25-year, $15.1 million loan from the Kuwait Fund for Arab Economic Development. The borrower has stated intentions to seek additional loans from the Arab Bank for Economic Development in Africa (17 percent of project cost), OPEC Fund for International Development (25 percent) and the Saudi Fund for development (17 percent). 

In the UK, the $41.08 million, 800-student New Elgin High School PPP Project reached financial close on 26 February. Developer Balfour Beatty plans to complete the first phase of the project by the end of 2017, with phase two and three set for completion by June 2018. 

Another UK education project to report close this week was the $31.1 million Kelso High School PPP Project, which is set to be developed by Galliford Try and Morrison Construction and delivered in partnership with Hub South East Scotland.

Two social infrastructure deals to report closing without financial details this week were the British Transport Police PPP Project Acquisition and the Oldham Social Housing Project Acquisition.

Renewables | Total Weekly Deal Value – $368 million

On top of the renewables heap this week is the Ergon Peru Three Solar PV Projects financial close on $158.89 million. The project aims to install 500,000 solar PV panels across the Peruvian countryside. Clifford Chance advised Credit Suisse and guarantors Tozzi Green and Tozzi Holding on the issuance of a $30 million loan to back the project, which paved the way for a 24 February closing.

The $99.32 million Hurgada Photovoltaic Power Plant PPP Project closed with the signing of a 40-year loan (10-year grace) carrying 0.3 percent interest by JICA on the lending side and the Egyptian government on the borrowing side on 1 March.

ERG Renew closed its acquisition of Brockaghboy Wind Farm in the UK from TCI Renewables on 29 February. The buyer now holds a 100 percent interest in the $83.26 million project.

In Japan, Canadian Solar signed an agreement with Goldman Sachs Japan for the financing of the 10.2MWp Aori-Misawa Solar Power Plant on 24 February. Goldman led the provision of a $26.61 million loan (providing $13.3 million itself) which matures on 1 February 2036 with a two-year grace period and a fixed coupon rate of 1.4 percent.

Three renewables deals reported closing this week without financial details. They comprise the H2O Power Acquisition in Pennsylvania, the Sunrise Solar Energy PSC Acquisition in Jordan, and Les Monts Wind Project in France.

Energy 

The only non-renewable energy deal to report closing this week was Los Guindos Power Plant Acquisition in Chile by GE Energy Financial Services from Inprolec, which closed on 25 February. The seller continues to maintain a 25 percent operating interest. Financial details of the deal were unreported.