US$650 million financial close for Denver International Airport P3

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US$650 million financial close for Denver International Airport P3

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The Great Hall Partners consortium has achieved financial close of the contract for remodeling and commercial operation of the Jeppesen terminal at Denver International Airport, otherwise known as the Great Hall project.

The terminal encompasses over 70,000m2 of floor space. The upgrades will include creating new shopping and foodservice areas, relocating and expanding the TSA screening areas, improving building access and passenger flow, creating a new check-in area, and optimizing space and efficiency in the terminal. The estimated cost of these upgrades is US$650 million.

Ferrovial Airports is the majority partner of the consortium, with an 80% stake. The other members are Saunders Construction and JLC, an investment fund created by Loop Capital and Magic Johnson Enterprises. The construction and refurbishment work will be carried out by Ferrovial Agroman and Saunders Construction.

The consortium signed the contract for the project with the City and County of Denver on 24 August 2017.

The total investment will be financed by a combination of governmental payments, equity committed by the consortium partners, and a bond issue completed last week. The equity provided by the consortium amounts to US$73 million, while the bond principal amounts to US$189 million. The bond was rated BBB by Fitch and BBB- by S&P. The bond has an average yield to maturity of 4.083% and is callable before maturity. The average yield to call is 3.34%.

Construction is scheduled to begin in the summer of 2018. It is estimated that the upgrades will be complete in late 2021. Following this, the consortium will operate and maintain the Great Hall for 30 years. Great Hall Partners will be remunerated by Denver International Airport, an enterprise of the City and County of Denver, during this period. These payments, added with the cost of design and construction, equal a maximum contract value of $1.8 billion

The project is expected to create 400-450 construction jobs, more than 800 permanent jobs and generate an additional $3.5 million in annual taxes and general fund revenue for the City of Denver.

Opened in 1995, Denver International Airport is the largest commercial airport in North America in terms of acreage and ranks sixth in terms of traffic. It is served by 25 airlines, flying 58 million passengers each year to and from over 180 destinations in the Americas, Asia and Europe.

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