Although toll roads are a familiar feature of French transport infrastructure, the A63 is notable for both its size and the incorporation of a concession fee payable to the French Ministry of Ecology, Sustainable Development, Transport and Hous­ing (MEEDDAT).

The ministry originally launched the tender for the project in 2006, and Vinci, Eiffage and Colas (a subsidiary of Bouygues) all prepared bids. A shock court decision in April 2007, however, brought the tendering process to a halt. Altervia, a road construction start-up, claimed it had been blocked from the bidding process, and the Paris Administrative Tribunal ruled in its favour.

Environmental assessments delayed the project further, and the ministry re-launched the tender in March 2009. Vinci, Eiffage and Colas all entered the process once again and France’s big three all pre-qualified in December.

All three firms submitted best and final offers in April 2010, but Vinci and Colas soon asserted themselves as the two favourites for the contract. The Vinci bid gained the support of more commercial banks than Colas, but MEEDDAT award­ed the contract to the Bouygues subsidiary in August. The Colas-led Atlandes consortium was confirmed as preferred bidder the following month, at which point it was able to approach the banks that had backed the Vinci bid.

The contract’s Eu1.1 billion size made it an attractive proposition for the banks, but appetite was strong for a number of other reasons. Firstly, the project entails the widening of a pre-existing road with proven traffic volumes and while toll roads are political contentious in several countries, they are already prevalent in France. There is, however, only a small number of toll roads in the French PPP pipeline, the only other being the Eu122 million A150, and this further fuelled bank enthusiasm.

Given its previous difficulties, the French state was keen to close the project as quickly as possible. MEEDDAT originally gave Colas a 60-day window for financial close, although this was later extended to the end of January. An eight-strong commercial bank club came together by the end of September, and stayed in place until close.

The final package was split between Eu756 million in commercial bank debt and Eu184 million from the European In­vestment Bank. The commercial bank club is comprised of BBVA, Banca IMI, Credit Agricole, Societe Generale, Credit Mutuel, Mediobanca, Natixis, and Santander.

The commercial tranche was oversubscribed, and banks took different ticket sizes, carrying labels such as mandated lead arranger (MLA), senior MLA and initial senior MLA. Wrangling over ticket sizes made up the bulk of lender discussions, but the tight timeframe imposed by MEEDDAT curtailed drawn-out disputes. BBVA, Banca IMI and Credit Agricole put in for the largest amount, closely followed by Societe Generale.

The precise composition of the commer­cial debt went through some last minute changes. Banks originally planned for a 19-year term loan split into a Eu381 million tranche and a Eu358 million tranche. In its final form, however, this was re­placed by a unified Eu669 million term loan with an increased tenor of 25 years.

The Eu699 million term loan is accompanied by a Eu67 million equity bridge, repaid as a bullet after 3.5-years, a Eu8 million standby facility and a Eu12.5 million four-year VAT revolver. Pricing on the long-term debt starts around 250bp over Euribor, and increases by 100bp through a series of steps up post-completion. The equity bridge carries a flat margin of 150bp. Debt service coverage ratios are in the region of 1.3x.

The sponsors of the Atlandes consortium, providing Eu220 million between them in equity, are HSBC European Motor­way Investment (a subsidiary of the HSBC-managed HSBC Infrastructure Fund III, 42.01%), DIF Infrastructure II (24.65%), Colas (10%), Egis (8.34%), Spie Batignolles (7.5%) and NGE (7.5%). The road’s engineering, procurement and construction contractor is a joint venture of Colas, Spie Batignolles and NGE, while Egis will be operations and maintenance contractor.

The 40-year concession involves the upgrading, widening to six lanes and operation of a 105km section of the A63 between Salles and Saint Geours de Mar­emne. The contract requires around Eu500 million in development stage capital and also carries a Eu400 million concession fee paid to the government by the sponsor.

The concession fee is a unique feature of the project, and can be considered a pay­ment for the acquisition of existing infra­structure, including an existing work­force, as well as the recognition that the road has proven traffic, although it is not tolled, and currently designated the N10. MEEDDAT fixed the fee amount before the tendering process, rather than making it subject to competing proposals from bidders.

Colas is set to start construction, split into two phases, in the third quarter of 2011. The first phase will be completed in October 2013, at which point tolls will be charged at reduced rates. Full rates will come in with the completion of the second phase in July 2014, although local traffic will be able to use the highway section free of charge. Heavy goods vehicles will be charged on a sliding scale according to their environmental impact, and the A63 will be the first French toll road to use this system. The project is a designated a trans-European network, based on its facilitating trade between France and the Iberian peninsular.

Atlandes
Status: Financial close 18 January 2011.
Size: Eu1.16 billion
Location: Aquitaine, South West France
Description: Widening to six lanes of a 105km stretch of toll road
Sponsors: HSBC European Motorway Investment (42.01%), DIF Infrastructure II (24.65%), Colas (10%), Egis (8.34%), Spie Batignolles (7.5%) and NGE (7.5%)
Commercial lenders: BBVA, Banca IMI, Credit Agricole, Societe Generale, Credit Mutuel, Mediobanca, Natixis, and Santander
Multilateral lender: European Investment Bank
Government legal adviser: Clifford Chance
Government financial adviser: KPMG
Lender legal advisers: White & Case, De Pardieu Brocas Maffei (EIB)
Lender technical adviser: Currie & Brown
Sponsor legal adviser: Gide Loyrette Nouel
Sponsor financial adviser: HSBC