Refinancing announced for A28 highway concession in France

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Refinancing announced for A28 highway concession in France

Société Autoroute de Liaison Seine-Sarthe (Alis), the concessionaire of the A28 Rouen-Alençon motorway PPP project in France, has announced the successful refinancing of the debt associated to the project.

Alis has strengthened its financial structure by placing €900 million in bonds (US$1 billion): €857.5 million at a fixed rate of 2.485%, amortizing to 2046, and €42.5 million French CPI linked, maturing 2032. The bonds were rated Baa2 by Moody's.

Interest will be payable semi-annually in arrear on 31 January and 31 July in each year starting on 31 January 2017.

These new bonds have refinanced the existing debt of the concessionaire, which comprised 3 tranches of wrapped French CPI linked bonds maturing in 2017, 2027 and 2032, and 2 tranches of mezzanine debt.

HSBC and Deutsche Bank were the joint arrangers and bookrunners of the bond issue.

Given the economic performance of Alis since its commissioning in October 2005 and the present favourable market conditions, Alis and its shareholders, with the support of its advisors, decided to redeem its current debt and issue new bonds.

The refinancing had 3 goals:

  • redemption of the existing wrapped bonds due July 2017 to July 2032, and its refinancing with longer duration debt, until 2046;
  • reduction in funding cost, given forecast lower short and longer term interest rates;
  • reinforcement of Alis’ credit standing, by the removal of an element of existing refinancing risk.

The current shareholders of Alis are PGGM (33.17%), Mirova Core Infrastructure Fund (MCIF) (26%), Aberdeen Infrastructure Partners (13.6%), Sanef (11,67%), SAPN (8%) et Egis (8%).

The project was signed in December 2001.

The concession includes a 125-kilometre section between Rouen and Alençon of the A28 motorway. The motorway is part of a motorway link between Calais (which is connected to the Northern Europe motorway system and to the Eurotunnel) and Bayonne (which is connected to the Iberian Peninsula network), by-passing the Paris region on the western side and is part of the European highway E402. The Motorway is the final section of the major Rouen-Alençon-Le Mans-Tours motorway link which has been built under several concessions.

The motorway is a controlled-access, 2-lane dual carriageway with the exception of the sections where the motorway crosses the Le Bec and La Risle valleys where there is, in each case, a single lane dual carriageway on a single viaduct.

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