Budapest Airport completes a €1.4 billion refinancing

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Budapest Airport completes a €1.4 billion refinancing

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The shareholders of Budapest Airport (BUD) together with the airport management have successfully signed amended and restated financing documents.

The shareholders of the project are AviAlliance (55.44%), Malton (23.33%), a subsidiary of GIC, and Caisse de dépôt et placement du Québec (21.23%).

Financial investors and banks showed a strong interest in lending to Budapest Airport, the debt was strongly over-subscribed. This was driven by the strong passenger traffic increase during the past years combined with the overall improved performance of the airport, the significantly decreased leverage and last but not least an improved Hungarian sovereign credit rating.

The debt facilities sum up to €1.4 billion (US$1.6 million) with longer tenors than before, e.g. now split into tranches of 5, 10, and 15 years. In addition to savings on the al-ready existing banking tranche, with margins in the range of recent western European transactions, the airport also redeemed its expensive mezzanine facility.

The amended lending club includes existing partners, new international institutions and especially banks with local presence. The investor club comprised:

  • Senior lenders: BBVA, BNP Paribas, Crédit Agricole, Deutsche Bank, EDC, HSH-Nordbank, ING, K&H, KBC, Natixis, RBC, Siemens, SMBC, Société Générale, UniCredit Hungary
  • Junior lenders: Deutsche Bank, Macquarie, Park Square, Credit Suisse. Plus a €50m participation by core sponsors CDPQ, GIC and PSP Investments
  • Swap counterparties: BBVA, BNP Paribas, Crédit Agricole, Deutsche Bank, K&H, RBC, SMBC, Société Générale, UniCredit

After the successful signing, AviAlliance currently expects closing and fund flow in the coming week.

As the company’s adviser, Rothschild co-ordinated the transaction. Linklaters and Clifford Chance, which advised the senior banks and junior investors respectively.

Budapest is Hungary's biggest international airport and – after Prague – the second-biggest airport in the countries that joined the EU in 2004 and the first large center of aviation in the region to be privatized.

In June 2007, AviAlliance, together with its consortium partners, had initially assumed responsibility for the airport management with a stake of 75 percent minus one vote. In July 2011, the partners also acquired the 25%  airport shareholding of the Hungarian state. Since then, Budapest Airport is fully privatized

Very shortly after the takeover by the AviAlliance consortium, the modernization program BUD Future was initiated. For a total of €261 million, the infrastructure was thoroughly modernized and new business fields are still being opened up. The centerpiece of the program is the new terminal building BUD SkyCourt, which was opened in March 2011 and links Terminals 2A and 2B. The large glass structure offers passengers and visitors a high-quality stay, with interesting views of both the apron and the landside. At the same time, it accommodates the central security system, which streamlines passenger screening and check-in processes.

Gerhard Schroeder, Managing Director of AviAlliance and Chairman of the Board of Directors of Budapest Airport Zrt, said:

"We are very pleased with the strong interest of the market and happy that we were able to secure a long term financing for the airport with very attrac-tive terms."

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