Highway 407 East Extension Project Reaches Financial Close

407 East Development Group General Partnership (“the Partnership”), a consortium led by SNC-Lavalin Inc. and Cintra Infraestructuras, a subsidiary of Ferrovial, announced the financial closure and official signing of a 33.6-year contract to design, build, finance and maintain Phase 1 of the Highway 407 East extension in Ontario (“the Project”). The contract was awarded by Infrastructure Ontario and the Ontario Ministry of Transportation, and is worth around $1 billion.

The financing for the Project consisted of $571 million in bonds and a $300-million short-term loan. BMO Capital Markets and Desjardins were the lead underwriters for the bond issues, with Scotia Capital, TD Securities, National Bank Financial, RBC Capital Markets and Casgrain as the selling agents. BMO and Desjardins were the lead arrangers for the bank facility.

The Partnership has entered into a fixed-price contract with the Province of Ontario for the Project. Phase 1 of the new highway will extend 22 kilometres east from Brock Road in Pickering to Harmony Road in Oshawa. It also includes the West Durham Link, a 10-kilometre north-south highway, east of Lake Ridge Road, connecting Highway 407 East to Highway 401. The design and build portion of the contract is expected to take ap-proximately three-and-a-half years. Once completed, the Partnership will maintain and rehabilitate the road for 30 years.

SNC-Lavalin Inc. was represented in-house by Michel Jodoin and Ciprian Gligor for SNC-Lavalin Capital, Christina Costy for SNC-Lavalin Operations & Maintenance, and Peter Drake for SNC-Lavalin Construction. Cintra Infraestructuras was represented in-house by Cristina Alvarez and Brett Carson. Ferrovial was represented in-house by Mercedes Agreda and María Eugenia Carballo Fdez de Villalta.

Davies Ward Phillips & Vineberg LLP acted for the Partnership in connection with its winning bid and the establishment of the bank and short and long-term bond facilities for the financing of the Project, with a team comprising Carol Pennycook, Greg Southam, Patrice Thomas, Chris Goodyear, David White, Sonny Bhalla, Bradley Ashkin, Jennifer Prieto and Dale Osadchuk.

Infrastructure Ontario was represented in-house by David Ho and Eric Tilley. The Ontario Ministry of Transportation was represented in-house by Ross Flowers and Richard Di Mauro. Both Infrastructure Ontario and the Ontario Ministry of Transportation were assisted by a team from Cassels Brock & Blackwell LLP that included Jim Janetos, Charles Newman, Sabrina Fiorellino, Stephen Morrison, Janine Kovach and Matthew Alter.

The bank lenders and bond underwriters were represented by Osler, Hoskin & Harcourt LLP, with a team led by Tobor Emakpor, Danna Donald, Michael Innes and Alex Gorka.