The group of companies behind the new Limerick city by-pass, have raised €241 million. The funds will be used to for the design, construction and maintenance of an approximate 10 kilometre tolled dual carriageway bypass to the south west of the city of Limerick, pursuant to a 35 year Public Private Partnership (PPP) project agreement. The four year construction programme includes a 675 metre long immersed tube tunnel under the river Shannon. The scheme is part of the Irish National Roads Authority’s Transport 21 Agenda.
The funds were raised by DirectRoute (Limerick) Limited, a special purpose company owned 40 per cent by Strabag AG, an Austrian construction company, 20 per cent by John Sisk & Son, 20 per cent by Lagan Holdings Ltd and 20 per cent by Roadbridge Ltd.
The company raised €143.5 million in a guaranteed secured loan due 2040 from Landale Asset Purchasing Company No 3 Limited and a €97.6 million guaranteed secured loan from the European Investment Bank. Both transactions were rated Aaa by Moody’s Investors Services.
The source of repayment for the senior secured debt will be toll payments made by the road users. Senior debt holders are largely insulated from traffic volume through a traffic guarantee mechanism granted by the National Roads Authority.
According to Moody’s, the project is exposed to some traffic volume risks, operational performance risks and capital maintenance risks, but ‘these risks have been adequately mitigated by a satisfactory financial/contractual structure’ the rating agency says. |
