The ¥22.7 billion ($231 million) 10-year project debt for the ¥126 billion Narita Rapid Rail project signed on 13 March 2009 – the final piece of debt for what is primarily a government subsidy driven project sanctioned by the Ministry of Land, Infrastructure and Transport in July 2002.

Sponsored by Narita International Airport Corporation, via project company Narita Rapid Rail Access Co, the scheme involves the development, leasing out and maintenance of the Narita New Rapid Line. The key construction elements of the project are the refurbishment of 32.3km of existing track on the Hokuso Line and construction of 19.1km of new track to Narita Airport, partly using disused rights-of-way originally planned for the cancelled Narita Shinkansen project.

When operational – construction began on 4 February 2005 and operation is expected to commence in July 2010 – trains will also utilize the Keisei Electric Railway's Main Line between Ueno and Keisei-Takasago. Trains are planned to run at a maximum speed of 160 km/h and could thus complete the run from Nippori to the airport in 36 minutes, 15 minutes faster than the current 51 minutes.

Narita Rapid Rail Access is responsible for EPC works while Keisei Electric Railway will operate the track and pay railway usage fees (based on traffic) to the project manager, cashflow which will be used to repay principal and interest on the debt. Debt repayments are scheduled in line with predicted ramp up and have a balloon at the end of the tenor.

The project is funded through a term loan, equity and subsidies from central and local governments. Narita International Airport Corp is also providing credit guarantees for the syndicated loan, although that is only partial risk cover.

The deal was lead arranged by Mizuho Corporate Bank and the Development Bank of Japan. The 10-year ¥23 billion facility comprises three tranches: two 10-year term loans of ¥5 billion and ¥15 billion each, and a ¥2.78 billion bridge loan with a tenor of one year and six months.

The deal was oversubscribed and syndication was smoothed by the parent credit cover and certainty of government subsidies for what is regarded by the authorities as a key piece of infrastructure development. The banks that came into the deal included BTMU, SMBC, Chiba Bank and three smaller trust banks, committing a combined total of ¥17.28 billion across all three tranches.

Narita Rapid Rail Access
Status: Signed 13 March 2009
Description: ¥22.7 billion debt financing for a 51.4 km rail project linking Narita airport and Tokyo
Sponsors: Narita International Airport Corp, Chiba Prefectural Government
Operator: Keisei Electric Railway Co,
Lead arrangers: Mizuho, Development Bank of Japan
Participants: BTMU, SMBC, Chiba Bank
Lender counsel: Nishimura & Asahi
Borrower counsel: Mori Hamada & Matsumoto
EPC Contractor: Narita Rapid Rail Access Co