PF Archive

Streetwise

01 12 2005

Love or hate the pricing, but syndication of Phase 1 of Madrid's flagship ringroad project, Calle 30, closed on 13 December with 14 banks, including the mandated lead arrangers, participating. At 35bp over Euribor – the average pricing across both A and B tranches – the deal was expected to have trouble finding takers. It did not. Joining mandated lead arrangers Caja Madrid, Societe Generale and Dexia Sabadell are: Instituto de Credito Oficial (also mandated lead arranger on tranche A only); joint lead arrangers BBVA, La Caixa, Bank Nederlandse Gemeenten and Banca OPI; Helaba with lead arranger status; and at arranger level Caixa Galicia, Lloyds TSB, Caixa Catalunya, IKB Deutsche Industriebank, and Ibercaja. The total project cost is around Eu4.5 billion ($5.4 billion) in two phases – Phase 1 funding the southern ring and Phase 2 the northern. If the project is fully realised it will set a new volume record for Spanish public-private-partnership (PPP) deals. The Phase 1 financing comprises a Eu1.35 billion 30-year tranche A loan backed by the fixed-price repayment stream of the concession service contract, and a Eu1.15 billion 20-year B tranche linked to performance risk, since payments from the municipality may be subject to deductions for under-performance. Separately, the deal also features a Eu114 million subordinated loan to partially back the private sector sponsors' equity stakes. Banesto, Fortis and Royal Bank of Scotland backed the Ferrovial/ACS bid and, although unconfirmed, are thought to have put up the sub-debt. There is no middle opinion on Calle 30 pricing – arguably it...