Meridiam closed five landmark projects in Europe in 2013, one of the strongest performances of any sponsor anywhere. Meridiam has proven to be comfortable working with bank and bond debt, with Spanish and French construction companies, and in Western Europe, Eastern Europe and North America

Meridiam is a long-term financial sponsor with a 25-year fund horizon. Meridiam manages 28 assets worth €2.8 billion ($3.8 billion) and has three funds under management: Meridiam Infrastructure, Meridiam Europe II and Meridiam Infrastructure North America II. Meridiam was founded in 2005, is headquartered in Paris, and its founding sponsor was Credit Agricole.

The refinancing of the R1 Expressway availability road in Slovakia was Meridiam’s largest financing last year, at €1.24 billion. It was the largest ever unwrapped PPP bond financing in Europe, and took out the bank debt on the first PPP in Slovakia. Deutsche Bank and Natixis put together the bond refinancing of project company Granvia, for which Meridiam and Vinci were 50/50 shareholders.

The R1 no longer featured construction risk, and did not feature traffic risk, but it had a tangled relationship with its grantor. Sponsors and government had been locked in disputes over the project’s payment regime since 2011, as Slovakia familiarised itself with PPP risk allocation. But after they settled the dispute project sponsors, Slovak government officials and bookrunners all participated in the bond marketing process and the track record of Meridiam and Vinci meant that the 26-year bonds were in high demand.

The R1 issue received €1.4 billion in orders and tight pricing of 235bp over mid-swaps. Institutional investors bought 51%, with accounts from Germany, the UK and Slovakia. With the dispute between government and the R1 sponsors over, future Slovak PPPs should make easier progress.

Meridiam even managed to close a financing in Spain, which has suffered from poor economic growth and employment, sickly toll road financings, and a troubled banking sector. “The A66 Benavente-Zamora benefitted very strongly from the support of the government of Spain and the European Investment Bank,” says Matthieu Muzumdar, investment relations director at Meridiam.

Sponsors Meridiam, Acciona and Cintra closed the A66's €160.5 million in debt in July, with the EIB, BBVA, Santander and Instituto de Crédito Oficial (ICO) participating. The greenfield project involves building a 49km dual-carriageway to connect Benavente and Zamora in the north-east of Spain, a Trans-European Transport Network (TEN-T) project. The sponsors achieved a 21-year tenor because the project did not feature traffic risk and its sponsors had solid construction experience.

In France, Meridiam sponsored two deals in the French PPP sector, part of a resurgence in activity in the country. In July BAMEO, Meridiam and SHEMA closed the €300 million Barrages Aisne Meuse VNF project. The sponsors hold a 30-year concession to modernise and upgrade 29 dams on the Aisne and Meuse rivers. A club of four commercial banks provided Eu266 million of 27-year senior debt for the locks PPP.

The €595 million L2 Marseille road project was the largest infrastructure financing last year in France and the first uncovered bond financing for a French PPP. Meridiam, together with Bouygues, CDC, Spie and Egis, developed a new structure with Allianz Global Investors as sole debt provider and Crédit Agricole as fronting bank. The 28-year bond financing was split into two tranches, and was the first securitisation of receivables with a Dailly guarantee.

Meridiam closed the University of Hertfordshire, its first student accommodation project in the UK, after joining Bouygues and Derwent Living ahead of financial close as a 55% sponsor. Legal & General bought the project’s £145 million ($238 million) of A-rated, unwrapped bonds. The financing featured some demand risk, though low levels of gearing, allowing the sponsors put together a 41-year inflation–indexed financing.

For Meridiam, closing long-dated financing is a priority. “As a long-term investor we very much want to steer clear of major financing risk ... It is encouraging to see banks and institutional investors lending long-term,” says Muzumdar.

In the US in 2013, Meridiam closed a $519 million private placement of the Long Beach Courthouse in California and closed a private activity bond financing for Texas’ $1.3 billion North Tarrant Express 3.

Meridiam looks like featuring in a landmark Scottish PPP this year, with the £415 million M8, M73, M74 availability road project due to close early in 2014. The Scottish Roads Partnership consortium – comprising Ferrovial, Lagan, Meridiam and Uberior – is putting the final touches to another bond solution, for which Allianz and the EIB are likely to be investors. Meridiam and Ronesans are sponsors of the 1,550-bed €500 million Adana healthcare project in Turkey, to which the EBRD is also attached.