Macquarie’s £502m debt facility closes National Grid deal

Macquarie Infrastructure Debt Investment Solutions has fully deployed its first UK infrastructure debt fund with this deal.

The infrastructure debt division of Macquarie Group has agreed to a £502 million ($682 million; €588 million) debt facility that allows the consortium purchasing a 61 percent interest in the UK’s National Grid to reach financial close, PDI sister publication Infrastructure Investor has reported.

Macquarie’s Infrastructure Debt Investment Solutions’ agreement also fully deploys its first UK infrastructure debt fund.

MIDIS provided the largest debt facility for the £13.8 billion acquisition of the UK energy company’s 130,000 kilometre network of gas distribution pipelines. The consortium, led by another Macquarie Group subsidiary, won the acquisition in an auction in December.

The deal was structured with fixed, floating and inflation-linked debt tranches, with maturities ranging from 20 to 25 years.

“The MIDIS debt financing has been specifically structured for the acquisition,” the platform’s co-head James Wilson said. “This is a very significant deal for us, not only as it represents a unique opportunity for our investors in a long-term, private deal with a blue chip regulated utility, but because it is the final deployment of our first UK inflation-linked infrastructure debt pooled fund.”

Fully invested after 26 months, the Macquarie Infrastructure Debt Fund made £829 million of commitments across 15 investments. More than 80 percent were linked to inflation with maturities ranging from 18 to 40 years. The fund was part of a wider £1.5 billion fundraising for a UK inflation-linked debt strategy.

MIDIS has launched a second infrastructure debt fund, open only to institutional investors.

The National Grid acquisition in December featured a 61 percent interest in the major UK energy supplier’s 130,000km network of gas pipelines sold to a consortium of domestic and international investors. As a result of the deal, National Grid receives a £3.6 billion cash payment and another £1.8 billion in debt financing.

The consortium included the following participants: Macquarie Infrastructure and Real Assets with a 14.5 percent stake, China Investment Corporation Capital with 10.5 percent, Allianz Capital Partners with 10.2 percent, the Qatar Investment Authority with 8.5 percent, Hermes Investment Management with 8.5 percent, and Amber Infrastructure and Dalmore Capital each with 4.4 percent.