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 10/19/2015 Refinancing for South Fraser Road in Canada

Iridium Concesiones, through its subsidiary, ACS Infrastructure Canada, Inc., successfully priced last Friday CAD $228 million of Senior Notes in a comprehensive refinancing of the project debt for its South Fraser Perimeter Road concession project.

Proceeds will be used to retire CAD $162 million of existing bank debt, pay swap breakage and make a special upfront dividend. The refinancing was targeted mainly at large insurance companies and pension funds across the US and Canada. The new capital structure will include a single tranche of Senior Notes of $228 million. ACSIC, Star America and Ledcor are the equity sponsors in the concession company for the project.

The South Fraser Perimeter Road, also known as the mainland portion of Highway 17, is a 40 km four-lane divided corridor linking Highway 17 in Delta, along the south side of the Fraser River to Highway 15 in Surrey and to the Golden Ears Bridge. South Fraser Road is a key component of British Columbia’s “Gateway Program”. The Project was delivered 6 months ahead of schedule and on-budget on December 2013. The Company will continue to perform all operations, maintenance and lifecycle obligations through 2033, for which it will receive scheduled availability payments during the operating period. With the Project largely de-risked after completing the construction period, the Concessionaire launched the refinancing approximately 3 years after full operations with no availability payment deductions due to excellent performance.

At pricing, the offering was oversubscribed and the final book will include 2 of the largest and most sophisticated institutional investors in the private placement market. A final spread of +200 bps was achieved over the 10-year interpolated Canadian Treasury for an all-in coupon of 3.58% for a final maturity in 2033. The transaction is set to close on October 23rd.

Pursuant to a refinancing agreement in place, the Sponsors and the British Columbia Province share 50% of the net present value benefits from the refinancing and the Province will realize its gain through a long-term reduction of its Availability Payment obligations.

SMBC Nikko Securities America, Inc served as financial advisor to Sponsors on the transaction. SMBC acted as lead placement agents. National Bank Financial and Casgrain acted as co-agents. Fasken Martineau DuMoulin LLP and McCarthy Tetrault LLP served as Investors’ and Sponsors’ Counsel, respectively. The British Columbia Province was advised by KPMG as financial and legal advisor.


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