36
infrastructure
investor
may
2014
Like an intricate passing move between
two in-formstrikers, AllianzGlobal Inves-
tors (Allianz) andCredit Agricole linked
up impressively to secure their goal of
financing the L2 Bypass in the French
city of Marseilles.
To summarise the move, Allianz
provided a €163 million fixed-rate
bond in two tranches: the first an €85
million senior secured project bond
(amortising 2041) provided by Allianz
funds; the second a €78 million loan
fronted by Credit Agricole and sold to
a securitisation vehicle, which in turn
issued a bond bought by Allianz (amor-
tising 2043).
This fancy footworkwasnot designed
merely to draw admiring gasps from
onlookers (though it arguably did just
that). Thepurposeof the complex struc-
turewas toallowAllianz tobenefit froma
Dailly guarantee fromtheFrenchgovern-
ment to cover the constructionphaseof
theproject.Under French law, theDailly
guarantee can only be provided to debt
issued by a bank.
The innovation ultimately allowed
Allianz the safety cushion that persuaded
it to become the first institutional inves-
tor to fund a greenfield public-private
partnership (PPP) project all the way
fromthe constructionphase. Indoing so,
it provided a powerful counter to those
sceptics who fear that construction risk
will always bea step too far for institutions.
The potential benefits if this proves
to be a breakthrough deal were neatly
summarised by Julien Touati and Mat-
thieuMuzumdar of sponsorsMeridiam
Infrastructure when they said in aQ&A
in the April 2014 issue of
Infrastructure
Investor
: “Once you have a large insti-
tutional investor willing to commit a
dedicated team of experts and sustain
it over the long term, it really changes
the game.” CouldL2 be the project that
gave other institutions the confidence
to follow suit?
Asked whether it felt the deal dem-
onstrated a new type of financing or
financing technique, Credit Agricole
said: “It helped to show and prove that
projects can be procured using innova-
tive funding techniques. This is good
news for government planners as they
try to source capital to finance the next
wave of transport schemes.”
Certainly, the judgeswere impressed
by the combination of bank and bond
instruments during the construction
and operational phases. Hopefully, the
residents of Marseilles will be equally as
impressed with a project that aims to
divert traffic fromthe city centre– reduc-
ing noise and pollution for the bulk of
the population.
n
How structuring innovation enabled an institutional
investor to join the game from the beginning
A perfect combination
BANKING AWARDS FOR EXCELLENCE 2013
L2 BYPASS (MARSEILLES)
Category:
European transport
Winner:
L2 Bypass (Marseilles)
Nominated by:
Credit Agricole Corporate
and Investment Bank (financial adviser,
rating adviser, mandated lead arranger,
joint book-runner, FCT (securitisation
vehicle) services, fronting bank, facil-
ity, security and intercreditor agent,
account bank)
Other participants included:
Societe
Generale (co-adviser); Allianz Global
Investors (mandated lead arranger);
European Investment Bank (lender);
French state (grantor); Bouygues Group
(sponsor); Meridiam Infrastructure
(sponsor); CDC Infrastructure (sponsor);
Spie Batignolles (sponsor); Colas (spon-
sor); Egis (sponsor); CACEIS (paying
agent of project bond issue)
Date of transaction:
7th October 2013
Size of transaction:
€620m
“This was all about innovation and problem
solving. It was clearly not easy to do, but
they found a way to do it.”
“What was impressive was the flexibility
of the financing mechanisms. You
had a public subsidy but you also had
the involvement of Allianz and the
securitisation vehicle.”
Honourable mentions in this category:
R1 Expressway bond refinancing
(nomi-
nated by Deutsche Bank and Natixis)
Thameslink rolling stock project
(nomi-
nated by Lloyds Banking Group and Sie-
mens Financial Services)
Tangenziale Esterna
(nominated by Banca
IMI)
WHAT THE
JUDGES SAID:
