Abertis and Canadian funds in the race for Chicago Skyway

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Abertis and Canadian funds in the race for Chicago Skyway

Spain's Abertis Infraestructuras and a consortium of three Canadian pension funds are in the race to acquire the Chicago Skyway Bridge in the United States.

The Canadian consortium is being advised by RBC Capital Markets and is composed of Borealis Infrastructure, Ontario Teachers' Pension Plan and Canada Pension Plan Investment Board (CPPIB).

According to sources, a Chinese bidder could also be preparing an offer.

Spain's Cintra and Australia's Macquarie had announced plans to sell their concession for the Chicago Skyway Bridge back in June 2015. Cintra has a 55 % stake in the concession while Macquarie holds the remaining 45 %.

The Chicago Skyway Bridge is a 12.55 km toll road built in 1958 to connect the Dan Ryan Expressway to the Indiana Toll Road. 36% of the Skyway's structures are overpasses, the majority of which are located over the Calumet River. Some 50,000 vehicles use the highway daily.

In January 2005, the Skyway Concession Company, LLC (SCC) assumed operations on the Skyway with a 99-year operating lease that gave the City of Chicago a US$1.83 billion cash infusion. SCC is responsible for all operating and maintenance costs of the Skyway and has the right to all toll and concession revenue.

Ferrovial published that the Chicago Skyway Bridge had revenues of €62 million (US$68 million) and an operating income of €54 million (US$59 million) in 2014. The concession has a total debt of approximately US$2.3 billion, most of its debt comes from two 2005 bond issues. The bonds will mature in June 2016.

The concession owners will need about a 34-plus EBITDA multiple to keep it out of the hands of creditors.

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