Project bonds fund construction of French PPP

Author: Danielle Myles | Published: 8 Nov 2013
  • Construction of the Marseille L2 ring road has been partially funded by two tranches of project bonds totaling €162 million;
  • These are the first project bonds to fund construction in France since the collapse of the monolines;
  • The first tranche consists of €78 million of bonds issued directly by the project company; the second is €84 million of notes issued by a French securitisation vehicle to refinance a loan secured by Dailly transfer;
  • Allianz and a number of its funds are the sole investors in both tranches;
  • Banks are looking to set up platforms to play the fronting role provided by Allianz in this deal, to ensure they continue to earn fees from project financings despite regulatory constraints on long-term lending.

The Marseille L2 ring road has unlocked the institutional investor financing market for greenfield projects in France.

The deal demonstrates how project bonds can be structured to overcome the...