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The French Ministry of Defence has announced that it has achieved refinancing closure of the defence department's new building.

In October 2016, the Ministry approved the refinancing of the PPP for the landmark building in Paris, which is referred to as the 'French Pentagon'. The French government approved a hybrid bond (80%) and bank loan (20%) scheme for the refinancing of senior debt for the project.

The 30-year debt package amounts to €806 million (US$879 million).

HSBC was selected to arrange a private placement. HSBC is also providing the bank debt portion of the scheme.

The project was awarded in February 2011. The project’s sponsor is an SPV led by Bouygues, and also comprising South Europe Infrastructure Equity Finance (SEIEF), FIDEPP and Caisse des Depots et Consignations (CDC) as equity providers.

The complex, built in Balard on the outskirts of Paris, houses 9,300 employees and comprises over 467,000 square metres of office space. The building is shaped as a hexagon, hence it is also known in France as the ‘Hexagone’. Completion of works was completed last year.

The 26-year PPP project has a capex of €600 million.

Gide has acted as legal advisor to the bank and CLP-Cliperton to the project owner. Ministry of Defence has been advised by De Gaulle Fleurance et Associés and Watson Farley & Williams.

This is the first time that the French state has initiated the refinancing of a PPP, as it is usually an initiative of the project’s private partner.