Moody's changes to negative rating outlook on Mersey Bridge after Brexit
Moody's Investors Service has changed to negative from stable the outlook on the ratings of the concessionaire of the Mersey bridge project. The agency also changed the rating of three other UK infrastructure-related investors: Network Rail Infrastructure Finance PLC, LCR Finance plc and Ineos Grangemouth Plc.
The actions follow referendum vote in favour of the UK leaving the European Union (Brexit) and the recent change in the outlook of the UK's Aa1 government rating to negative from stable.
The change in rating outlook to negative for all four UK-domiciled infrastructure and project finance issuers reflects the fact that their debt benefits from a guarantee provided by the Government of the United Kingdom. As such, their ratings move in lockstep with those of the sovereign.
The Mersey bridge project is being developed under a 30-year contract to design, build, finance and operate the asset.
In April 2014 the project achieved financial closure. The total project investment was estimated at £600 million (US$904.7 million). KEXIM invested £102.5 million (US$154.5 million) in the project, alongside HM Treasury providing a 29-year £257 million (US$387.5 million) Mersey Gateway bond with HSBC as sole arranger, and Credit Agricole, HSBC and Lloyds Bank as joint bookrunners to place the bonds. The balance of funding was provided by four banks (Lloyds, SMBC, KfW and Crédit Agricole) and the Merseylink sponsors.
The Mersey Gateway is a six-lane cable stayed toll bridge spanning 2.13 km over the River Mersey in the North West of England (Manchester-Liverpool). With a river span of 1 kilometre, along with a new and improved high standard road of 9.5 kilometres long and three towers rising up to 125 metres above the river bed, the bridge will stand as an iconic piece of UK infrastructure, connecting north Widnes and Merseyside with Runcorn and the national motorway network in north Cheshire.
The Merseylink consortium's equity partners are Macquarie Capital Group Limited, Bilfinger Project Investments Europe Limited and FCC Construcción.
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