MUFG has acted as Sole Lead Agent and Bookrunner on the debut issuance in the US Private Placement market of £300m Senior Secured Notes, due to mature in 2032, by Bazalgette Tunnel Limited (trading as “Tideway"). Tideway is the company responsible for delivering the Thames Tideway Tunnel, a critical piece of infrastructure designed to tackle the problem of pollution in the River Thames.
Since the award of its licence by the UK water industry regulator (Ofwat) in August 2015, Tideway has raised debt financing from the bank market, the European Investment Bank and UK institutional investors. Through this US Private Placement issuance, Tideway succeeded in raising competitively priced, long-term funding, while further diversifying its funding sources and establishing a benchmark for future issuances.
MUFG leveraged its global network to execute the transaction through a targeted distribution to a number of U.S. institutional investors, who were able to provide Tideway with sterling denominated funding. By executing the transaction in this manner, MUFG eliminated the need for a full offering memorandum, streamlining the investor marketing and due diligence process, thus allowing Tideway to seize an attractive market window and to conclude the issuance within an expedited timetable.
Darryl D'Souza, Executive Director of Infrastructure Finance, EMEA at MUFG, said:
“This landmark transaction will be instrumental to the delivery of the high-profile Thames Tideway Tunnel project. Reflecting MUFG's strong relationship with Tideway and its shareholders and our strong global project finance franchise, Tideway entrusted MUFG to execute their inaugural issuance in the US PP Market. This successful US PP transaction demonstrates the broad range of products that we are able to deploy in support of our clients in the European infrastructure sector beyond traditional bank debt financing."
Conrad Owen, Managing Director and Head of Private Capital Markets at MUFG in the Americas, said:
“MUFG has a strong presence in the US Private Placement market which we are increasingly deploying in support of MUFG's international client base who recognise the competitive and flexible features of the US PP product. MUFG was able to utilise its strong relationships with institutional investors to ensure that the offering was met by more than enough demand at the clearing level. The deal marks MUFG's third sole bookrunner and fourth non-USD transaction in 2017 to date, and fourth sterling issuance since March 2016."
Construction is due to be complete on the tunnel by 2024 and the entire project is estimated to cost £4.2bn.