Denver Eagle P3 Refinancing
John Laing Group plc ("John Laing" or the “Group"), the responsible investor and active manager of infrastructure projects internationally, is pleased to announce that it has successfully completed a refinancing of the Regional Transportation District’s (the “RTD”) Denver Eagle P3 project (the “Project”) in Denver, Colorado.
The refinancing of the 2010 Series Private Activity Bonds (the “2010 PABs”) was led by John Laing, working together with equity partners, Aberdeen Global Infrastructure Partners and Fluor Enterprises, and our client, the RTD.
The investment in Denver Eagle in 2010 marked John Laing’s entry into the US P3 market and was the country’s first public-private partnership transit project. The Project consists of the design, build, finance, maintenance and operation (“DBFOM”) of two new commuter rail lines and a portion of a third line to expand transit across the Denver metropolitan area, including a line connecting Denver International Airport to Denver Union Station. This includes approximately 35 miles of commuter rail transit lines, rolling stock, a commuter rail maintenance facility and systems and track improvements to Denver Union Station.
As a 45% equity owner in Denver Transit Partners (the “Consortium”) and active investor, John Laing appointees hold key positions within the Project, including the Chief Executive, as well as at the board level. The Group has played an active role in the successful delivery of the Project through construction and into operations. The third and final line opened in April 2019, and Denver Eagle is now building a strong operational track record, with all three commuter rail lines running at 95% plus reliability.
The Project is designed to help reduce congestion and provide a safe, affordable and reliable transport option for the 2.8 million people living in Denver’s growing metropolitan area. The Consortium has had a strong focus on local procurement, and the Project has contributed to economic growth in the region, with over US$900 million spent in the local economy to date.
The refinancing consisted of approximately US$311 million par value tax-exempt and taxable bonds (the “Refinancing Bonds”), which were used to redeem the remaining outstanding balance of the bonds issued in 2010 (the “Refinancing”). The Refinancing Bonds were priced on December 1, 2020, and the Refinancing reached financial close on December 18, 2020.
The Refinancing Bonds were rated A- by Fitch and Baa2 by Moody’s, a significant upgrade over the rating of the 2010 PABs issuance which reflects the completion of construction and strong operational performance to date. This will reduce the Project’s debt service cost going forward and improve cash yields. The resulting savings will be shared with the RTD, with the Refinancing delivering benefits for all parties.
Anthony Phillips, John Laing’s Co-Head of PPP & Greenfield Projects, said:
“The Refinancing is a great outcome for all stakeholders and could not have happened without close collaboration between all investors, our client and our banking partners. It is also an example of the value we add to major infrastructure projects as an active investor and the results that can be achieved through the use of public-private partnerships. We are proud to have played our role in a Project bringing much-needed train services to local Denver communities.”
The bonds were underwritten by B of A Securities, Inc., Barclays Capital, Inc., and Wells Fargo Bank Securities. John Laing and its partners were advised by Agentis Capital (financial advisor), Orrick Herrington & Sutcliffe LLP (legal advisor), and THB Advisory LLC (municipal advisor).