Valencia Road Expansions Financed

Sacyr Concesiones and 3i Investments have raised junior debt financing to fund the expansion of the CV-35 and CV-50 shadow toll roads connecting Valencia to the region.

The long-term debt, provided by an institutional investor, is being injected at the holdco level to Autovía del Turia, Concesionaria de la Generalitat Valenciana, keeping the original financing in place.

Financial adviser Rubicon had secured credit approval for a more traditional debt refinancing at the project level as well as
the holdco option.

However, the sponsors ultimately elected for the latter for a number of reasons including certainty of execution, the competitive margins on the original financing, and the mitigation of construction risk.

“It was really a tailor-made solution,” said Jesus Gonzalez Torrijos, managing director at Rubicon.

Sacyr, a transport infrastructure group, won a 35-year concession for these roads in September 2005 along with two local contractors, who subsequently sold off their stakes. Private equity investor 3i entered the project via its Managed Infrastructure Acquisitions fund.

The concession agreement stipulated that extensions would be necessary once certain traffic limits were reached. Construction of the expansion will begin in the coming weeks and should take between 18 and 24 months to complete.

PFI Issue 640 – January 16, 2019