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SPV Metro 5 S.p.A. has signed a €580 million (US$647.7 million) loan contract to refinance and complete Line 5 of the Milan Underground.

The operation consists of a €430 million (US$480.2 million) bank loan and the issuance of a €150 million (US$167.5 million) project bond, both coming due in 2035. It is an innovative operation that sees, for the first time in Italy, the combination of credit lines with a project bond, as provided for by recent regulations.

The fully-automated Line 5 of the Milan Underground is built under project financing by Astaldi as leader of the SPV Metro 5 S.p.A., consisting of Ansaldo STS S.p.A., Ansaldo Breda S.p.A., Alstom Ferroviaria S.p.A. and ATM S.p.A. (a company fully-owned by the Municipality of Milan).

Line 5 of the Milan Underground stretches for 12.8 kilometres, along the route that from Bignami Parco Nord crosses 19 stations reaching San Siro Stadio. The entire line was open to the public on 29 April, concluding works that had been started up in 2007. The first section, 6 km in length and featuring 7 stations from Bignami to Zara, was inaugurated in February 2013. Two other stations were opened to the public in March 2014, reaching Garibaldi station, thus allowing for the interchange with Line 2 of the Milan Underground and the domestic railway system. Therefore, with last opening of the entire line, the total number of operational stations rises to 14. The works are slated for completion in November 2015, by which time the final five stations will also be open to the public.

Contributing to the financing operation's success was the pool of Italian and international credit institutes composed of Banca IMI, BBVA, BNP Paribas, Cassa Depositi e Prestiti, Crédit Agricole CIB, MPS, Natixis, Société Generale, UBI, and Unicredit. The project bond was underwritten entirely by institutional investors.

Astaldi relied on the legal assistance of the law firm DLA Piper for financial matters, whereas, for the aspects related to the concession agreement and project contracts, Astaldi relied on the assistance of Lawyers Marco Annoni and Andrea Segato and of law firm Carbone e D'Angelo. The pool of credit institutes and institutional investors were assisted by the law firm Bonelli, Erede Pappalardo, that oversaw the various steps of the operation, including the advisory start-up phase.

We have recently reported about several rail PPP projects globally:

• Thiruvananthapuram Light Metro project - India
• Eglinton Crosstown LRT Project - Canada
• Accra - Kumasi high speed rail - Ghana
• GO Transit East Rail Maintenance Facility P3 in Canada - Canada