Norton Rose Fulbright has advised the funders to the Aberdeen Roads Limited Consortium (Balfour Beatty, Carillion and Galliford Try) in connection with the contract to design, build, finance and operation (DBFO) the A90 Aberdeen Western Peripheral Route / Balmedie to Tipperty (AWPR / B–T route) project in Scotland. The project, worth £745 million is being delivered in partnership by Transport Scotland, Aberdeen City Council and Aberdeenshire Council. The Project achieved a successful financial close on Friday December 12, 2014.
The project was closed under a unique financing structure with £600 million of funding being sourced from a combination of senior secured fixed-rate bonds of Allianz, European Investment Bank (EIB) debt, a tranche of senior commercial debt provided by Bank of Tokyo-Mitsubishi (BTMU) and equity bridge facilities provided by Royal Bank of Canada (RBC) and Barclays. The bonds amount to £190 million and are listed on the Luxembourg Stock Exchange. The EIB is providing £270 million and BTMU £80 million in senior bank debt and £60 million equity bridge facilities making this one of the largest and most complex UK roads projects to close involving bond financing.
Mark Berry, projects partner at Norton Rose Fulbright comments:
“We have been working with the Connect Roads Consortium as funders’ advisers throughout the procurement phase, and so we are now delighted to help the Project to achieve financial close in order to permit construction of this nationally significant road to commence. The multiple teams at Norton Rose Fulbright supported the funders and sponsors to help bring this project to a successful financial close extremely quickly and efficiently.”
Martin McCann, global head of infrastructure, mining and commodities at Norton Rose Fulbright led the financing team, he comments:
“There have been very few project bonds in the UK in recent years and even fewer interfacing with both DFI and commercial lenders. Clearly there is a very mature market for project bonds in Canada and that is a wonderful market to draw on. We are delighted to have closed this pathfinder deal. We expect this now be rolled out all over Europe across both infrastructure and energy”.
Farmida Bi, debt capital markets partner at Norton Rose Fulbright comments:
“We're delighted to have worked on this innovative project bond which supports infrastructure development in the UK and is one of the first to have closed since the financial crisis. The issue shows that the debt capital markets are a viable option for the UK's infrastructure needs and we are likely to see more of this type of financing for large infrastructure projects both across the EU and globally.”
Construction of the AWPR / B–T route will include 12 junctions, two river crossings at the River Dee and River Don, a bridge for crossing the Aberdeen to Inverness Railway, four major pipeline crossings and three wildlife bridges in addition to more than 100 other structures. Work on the bypass is expected to be completed by winter 2017.
Norton Rose Fulbright’s depth of resources and experience enabled it to field several separate teams to support the multiple funding parties required for this complex funding solution. Norton Rose Fulbright worked together with Shepherd and Wedderburn LLP who advised the funders in relation to Scottish Law aspects of the project.
The team advised on the drafting and negotiation of all of the financing documents including the project bond and supported the funders on all aspects of their due diligence of the project risks.
The Norton Rose Fulbright team was led by London partners, Mark Berry, Martin McCann and Farmida Bi assisted by Matthew Hardwick, Oliver Carruthers, Andrew Coote, David Carter and Bevan Peachey. Dan Metcalfe and Kirstin Russell advised HSBC in its trustee and agency roles and Chris Brown with assistance from Yannis Erifillidis advised Bishopsfield Capital Partners as bond monitoring adviser. The Shepherd and Wedderburn team was led by partner Clare Foster, assisted by partner, Rhona Harper.
Allen & Overy were advisers to EIB.
Pinsent Masons advised the project company, Aberdeen Roads.
