Nouvelle Autoroute 30 closes $1.2B bond refinancing

On June 14, 2018, Nouvelle Autoroute 30, s.e.n.c.(NA30) successfully closed the $1.2 billion bond refinancing for Montreal highway Autoroute 30 (A-30) concession project (the A-30 Project). The bonds included approximately $828 million in long-term bonds, due 2042, priced at roughly 4.11% and approximately $390 million in medium-term bonds, due 2033, carrying a coupon of approximately 3.75%. The long-term bonds and the medium-term bonds are senior-secured and consist of two classes of bonds each. This bond issuance is considered the largest transportation infrastructure P3 bond financing in Canadian history. The bonds were assigned ratings of BBB+ from each of S&P and Fitch.

Proceeds from the offering, which was led by RBC Dominion Securities Inc. (RBC), HSBC Securities (Canada) Inc. (HSBC) and CIBC World Markets Inc. (CIBC), were used to refinance NA30’s existing term loan facility for the A-30 Project, to terminate existing interest rate swaps and to fund required reserves, with the remainder of the proceeds being distributed to NA30’s sponsors as a special distribution. The refinancing was marketed to large insurance companies, pension funds and other institutional investors in the United States and Canada. The offering was more than three times oversubscribed and the final book included some of the largest and most sophisticated institutional investors in the North American private placement market.

As part of the refinancing, certain hedging arrangements between NA30 and several of its original lenders were novated to affiliates of RBC, HSBC and CIBC. These novated hedges are designed to mitigate inflation risks to project revenues, providing for a more predictable and consistent project cashflow.

NA30 is owned indirectly by ACS Infrastructure Canada Inc., Teachers Insurance and Annuity Association of America, Acciona Concessiones S.L. and funds managed by Northleaf Capital Partners, and is the private partner responsible for the completion, operation and ongoing maintenance and rehabilitation of the A-30 Project. Highway 30 is a public-private partnership project between NA30 and the Ministère des Transports du Québec, and runs between Châteauguay and Vaudreuil-Dorion in Québec.

NA30 was advised by McCarthy Tétrault LLP with a team led by Stephen Curran that included Mathieu Dubord, Charles-Antoine Souliere, Robin Mahood, Robert Hansen, Michael Bennett, Jeremy Pleasant, Glynnis Morgan, Etienne Guertin, Thomas Etienne and Eve Tessier (business), Liezl Behm, Ailbish Skinner and Candace Pallone (financial services), Jocelyn Perrault, Walker MacLeod and Pantelis Kyriakakis (bankruptcy and restructuring) and Christopher Falk (tax). NA30 was advised in the United States by Skadden, Arps, Slate, Meagher & Flom LLP with a team that included Riccardo Leofanti and Annabelle Gardere and by Gowling WLG (Canada) LLP as special counsel with a team that included Luc Lissoir, David Kierans, Pierre Lissoir and Joey Suri.

Blake, Cassels & Graydon LLP represented RBC, HSBC, CIBC and the bondholders with a team led by Catherine Doyle that included Yannick Beaudoin, Aaron Palmer, Tim Andison, Michael Bantey, Alain Massicotte, Clementine Sallee, Sebastien Guy, Fabien Lanteri-Massa, Jean Gagnon, Christine Ferguson, Mahnaz Jan Ali, Alexis Beaudin Fol, Ted Gotlieb, Yu Li and Emilie Cazes. US legal advice was provided by Paul, Weiss, Rifkind, Wharton & Garrison LLP with a team that included Christopher Cummings and Thea Winterton-Perks.

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