IP5 – casts a long shadow
Portugal's biggest toll road and almost the equivalent of the first
UK 8-deal DBFO roads programme, IP5 reached financial close in late
April and features some of the most aggressive EIB terms to date.
The 166.8 km shadow toll reached financial close on April 28. The Eu1.2 billion deal funds a DBFO 30-year concession awarded to the Mota-led Lusoscut. The transaction comprises Eu102 million equity, Eu435 million of senior debt, a Eu470 million loan from the EIB, and Eu127 million of cashflow during construction.
Tenor on the EIB loan is an unprecedented 27 years and EIB funding constitutes 45% of the transaction. EIB involvement ensured that witholding tax ? from which each bank in the commercial tranche has to get exemption from the Portuguese government for ech individual deal ? did not become a major stumbling point given EIB immunity from the levy.
The EIB loan is covered by guarantees from the commercial banks and is unusually aggressive in that the guarantees fall away very quickly ? half at year eight and the remainder at year 15.
Pricing on the commercial facilities is 125bp during construction dropping to 100-110bp depending on performance. The commercial banks are in for 25 years with a release profile post year 17.
Construction is due to start on May 1 according to the financial modelling and finish in June 2006. Most of IP5 is only two-lane at the moment. The deal expands the lanes to three and should make a large improvement in safety by straightening parts of the existing road dogged by bends.
Abbey National Treasury, Banco Espirito Santo, BCP Investimento, Banco Comercial Portugues de Investimento, Caixa Geral de Depositos, ING Bank, Dai Ichi Kangyo Bank and Bank of Ireland have taken equal amounts of the senior debt and are also guarantors on the EIB loan.
PricewaterhouseCoopers Project Finance and Privatisation team and BES Investimento acted as joint financial advisers to Lusoscut with Ashurst Morris Crisp providing sponsor legal counsel. Allen & Overy acted for the commercial lenders with Herbert Smith counselling the EIB.
Mota/Lusoscut (again advised by PricewaterhouseCoopers and BES) is going to BAFO on June 11 for the Grande Porto Scut ? the last of Portugal's shadow tolls. The consortium faces competition from Ferrovial-Agroman. Mota is believed to have considered a bond financing along the lines of Ferrovial's Algarve Scut issue but is said to have abandoned the idea.
Lusoscut shareholders include: Mota, Bento Pedroso Construcoes, Engil, OPCA, Hagen, Amandio de Carvalho, Sociedade de Empreitadas Adriano, Rosas Construtores, Monte & Monte, Alberto Martins de Mesquita e Filhos, Jaime Ribeiro & Filhos, Banco Espirito Santo and Banco Comercial Portugues de Investimento.
Despite heavy criticism from the banking sector over its BAFO system the Portuguese process is unlikely to change for the next round of smaller real tolls. However the days of the straight shadow toll are numbered Europe-wide, and changes in the growing toll road market are likely to come in the form of a variety of payment mechanisms.
The 166.8 km shadow toll reached financial close on April 28. The Eu1.2 billion deal funds a DBFO 30-year concession awarded to the Mota-led Lusoscut. The transaction comprises Eu102 million equity, Eu435 million of senior debt, a Eu470 million loan from the EIB, and Eu127 million of cashflow during construction.
Tenor on the EIB loan is an unprecedented 27 years and EIB funding constitutes 45% of the transaction. EIB involvement ensured that witholding tax ? from which each bank in the commercial tranche has to get exemption from the Portuguese government for ech individual deal ? did not become a major stumbling point given EIB immunity from the levy.
The EIB loan is covered by guarantees from the commercial banks and is unusually aggressive in that the guarantees fall away very quickly ? half at year eight and the remainder at year 15.
Pricing on the commercial facilities is 125bp during construction dropping to 100-110bp depending on performance. The commercial banks are in for 25 years with a release profile post year 17.
Construction is due to start on May 1 according to the financial modelling and finish in June 2006. Most of IP5 is only two-lane at the moment. The deal expands the lanes to three and should make a large improvement in safety by straightening parts of the existing road dogged by bends.
Abbey National Treasury, Banco Espirito Santo, BCP Investimento, Banco Comercial Portugues de Investimento, Caixa Geral de Depositos, ING Bank, Dai Ichi Kangyo Bank and Bank of Ireland have taken equal amounts of the senior debt and are also guarantors on the EIB loan.
PricewaterhouseCoopers Project Finance and Privatisation team and BES Investimento acted as joint financial advisers to Lusoscut with Ashurst Morris Crisp providing sponsor legal counsel. Allen & Overy acted for the commercial lenders with Herbert Smith counselling the EIB.
Mota/Lusoscut (again advised by PricewaterhouseCoopers and BES) is going to BAFO on June 11 for the Grande Porto Scut ? the last of Portugal's shadow tolls. The consortium faces competition from Ferrovial-Agroman. Mota is believed to have considered a bond financing along the lines of Ferrovial's Algarve Scut issue but is said to have abandoned the idea.
Lusoscut shareholders include: Mota, Bento Pedroso Construcoes, Engil, OPCA, Hagen, Amandio de Carvalho, Sociedade de Empreitadas Adriano, Rosas Construtores, Monte & Monte, Alberto Martins de Mesquita e Filhos, Jaime Ribeiro & Filhos, Banco Espirito Santo and Banco Comercial Portugues de Investimento.
Despite heavy criticism from the banking sector over its BAFO system the Portuguese process is unlikely to change for the next round of smaller real tolls. However the days of the straight shadow toll are numbered Europe-wide, and changes in the growing toll road market are likely to come in the form of a variety of payment mechanisms.
Request a Demo
Interested in IJGlobal? Request a demo to discuss a trial with a member of our team. Talk to the team to explore the value of our asset and transaction databases, our market-leading news, league tables and much more.