Infrastructure investor, developer and manager Plenary has closed the first long-term bond issue for a PPP project in Australia since the Global Financial Crisis (GFC).

As part of a AUD1billion (US$760 million) refinancing of the Victorian Comprehensive Cancer Centre, the initial bank debt has been refinanced with a AUD450 million (US$342 million) 24 year domestic and offshore bond issuance, and an 11.5 year bank debt tranche. 

The long-term PPP bond market has lain dormant in Australia for the past 9 years leaving little competition for banks in Australian PPP financing and, as a result debt has been relatively hard to secure for tenures longer than 7 years.   

In what amounts to a re-opening of the bond market and competition for debt financing, the VCCC bond is the first of its kind.  It is a full term A$ “natural” bond with a floating interest rate. 

Paul Oppenheim, CEO of Plenary Australia, said:

“The VCCC bond is the culmination of a concerted effort over recent years to re-engage fixed income investors in the Australian PPP bond market.” 

“This outcome is a credit to the persistence of our origination team who have been searching for the right opportunity to re-activate the bond market.”  

“The bond issue has been supported by some of the world’s largest fixed income investors alongside key local institutions.”

Victorian Treasurer, Tim Pallas said:

“This is a vote of confidence in the state of the art VCCC facility, and yet another in the Victorian economy - the fastest growing in the nation.” 

The cancer centre PPP includes 96 overnight inpatient beds, 110 same-day beds, a dedicated clinical trials unit, accommodation for families of country patients, more than 20,000 square meters of dedicated research space for up to 1,200 researchers, eight operating theatres, two procedure rooms, eight radiation therapy bunkers, and education and training facilities. The PPP contract involves to design, build, finance and maintain the project for 25 years. Following a 4.5 year construction period the AUD1.1 billion VCCC was completed on-time and on-budget earlier this year and opened to patients in July 2016.