Silvertown Tunnel closes tightly priced DFI/ECA-backed facility
The RiverLinx consortium – comprising Macquarie Capital (22.5%), Cintra (22.5%), Aberdeen Standard Investments (22.5%), BAM PPP PGGM (22.5%) and SK E&C (10%) – has sealed a DFI/ECA-backed loan to finance the Silvertown Tunnel in the UK.
The project, which has a total cost of £1.2 billion, is backed by a 25-year concession, excluding the construction phase, and is the UK’s first road tunnel to have dedicated bus lanes. Once operational in 2025, the tunnel will relieve congestion on the 122-year-old Blackwall Tunnel.
The facility comprises five tranches: a £450 million 20-year senior debt tranche provided by Credit Agricole, ICO, Korea Development Bank, KEB Hana, Norinchukin and Shinsei Bank, which priced at 150-170bp over Libor; a £100 million equity bridge loan – priced at 110bp – was put up by Credit Agricole, DZ Bank, SMBC, Woori Bank; a £175 million 29-year Kexim direct loan priced at 150-170bp; a £375 million 18-year K-Sure-backed facility funded by Credit Agricole, Norinchukin and KfW IPEX-Bank priced at 80-100bp; and a £100 million 29-year private placement provided by Aviva and Samsung Life, which priced at 150-170bp over Gilts. Royal Bank of Canada is providing interest rate swaps.
The project was suspended in August this year when losing bidder STC – comprising Iridium, Hochtief and John Laing – challenged Transport for London’s (TfL) decision to award the project to RiverLinx. However, the injunction against the tunnel project was lifted in October when STC consented to TfL’s court application to lift the automatic suspension on the awarding of the contract.
Allen & Overy provided legal counsel to the sponsors, while Hogan Lovells is acting for the lenders. Macquarie Capital is financial adviser to RiverLinx, while KPMG is advising on financial matters to TfL.
