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International banks and EBRD refinance Hungarian motorway project
M6 Duna, the consortium building Hungary’s M6 motorway, will be the first
company in Central and Eastern Europe to issue Senior Floating Rate Notes, in
a public private partnership-project (PPP) providing early refinancing of its
original funding.
M6’s original financing is being replaced by a €212 million of Senior Floating
Rate Notes arranged by Dexia Capital Markets, €200 million of Senior Debt
provided by the European Investment Bank and a €19 million Debt Service
Reserve Facility provided by Dexia.
The EBRD will take a €32 million participation in the Senior Floating Rate
Notes, which will be listed on the Luxembourg Stock Exchange and wrapped with
financial guarantee insurance provided by Financial Security Assurance Limited
(U.K.).
The M6 Duna consortium consists of Bilfinger Berger BOT GmbH of Germany and
the Austrian construction companies Porr Infrastruktur GmbH and Swietelsky
International GmbH. The group has been awarded a 22 year-term concession to
design, build, operate, maintain and finance the 58,6 km section of the M6
between the “érdi tető” interchange near the M0 Budapest orbital motorway and
Dunaújváros.
The EBRD provided a €32 million loan to the original M6 financing and the
consortium expressed strong interest in the Bank’s continued participation.
The EBRD has extensive experience in financing and structuring road PPPs in
Hungary, including the financing of the M5 motorway to Szeged in 2004.
Alexander Auboeck, EBRD Business Group Director for Infrastructure, said the
new project will set an example for the region. This is the first PPP to be
refinanced on the capital market and is aimed at attracting a new type of
investor to the Hungarian market.
The M6 motorway is part of the Trans European Network corridor V and will
ultimately connect Budapest with the Hungarian-Croatian border. The 58.6 km
concession section is expected to open in spring 2006.
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