Fund Managers

BAA in £2.75bn Heathrow, Stansted refinancing

The oversubscribed refinancing involved 17 ‘existing and new relationship banks’ from the UK, Continental Europe, the US, Canada and Australia. The new debt facilities have a five-year tenor and carry margins of between 150bps and 225bps.

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UK airports operator BAA – a subsidiary of Spanish developer Ferrovial – has refinanced £2.75 billion (€3.4 billion; $4.3 billion) of debt for two of its London airports, Heathrow and Stansted, the airports operator announced yesterday.

The oversubscribed refinancing – which received some £4 billion of commitments – counted 17 banks including Barclays and Lloyds – serving as joint arrangers – Bank of America Merrill Lynch, Banco Bilbao Vizcaya Argentaria, BNP Paribas, Canadian Imperial Bank of Commerce, Citi, Deutsche Bank, HSBC, JP Morgan, Morgan Stanley, National Australia Bank, Royal Bank of Canada, Royal Bank of Scotland, Santander, UBS and Siemens Financial Services, BAA said.

The banks are providing a total of £2.75 billion of debt split into a £2 billion revolving credit facility – comprising a £1.5 billion Class A general purposes facility, a £400 million Class B general purposes facility and a £100 million Class A working capital facility – as well as £750 million of standby liquidity facilities. The new debt, which matures in 2017 and is replacing facilities expiring in August 2013, will pay margins of between 150 basis points and 225 basis points.

“These new facilities provide BAA with the very strongest base for our investment programme to continue to improve Heathrow’s critical infrastructure and maintain its position as the world’s leading international airport,” Fred Maroudas, BAA’s director of treasury, commented in a statement.

Maroudas' comments come as discussion around a third Heathrow runway has been reignited, with the UK government signalling it will not stop BAA from submitting proposals for a third runway, partly to ward off the threat of legal action from the airports operator. However, a spokesman from the Department for Transport told the Guardian the coalition government was still against a third runway.

In related news, BAA was recently given leave by the Royal Courts of Justice to again appeal against the sale of Stansted Airport – the seventh time BAA will be able to argue against the Competition Commission’s ruling that it sell the London airport.

Under instructions from the watchdog, BAA has already been forced to sell Gatwick and Edinburgh airports, both acquired by Global Infrastructure Partners.