Cutting the cost of finance for Bordeaux’s A63 motorway


As a key player in financing the real economy, SG CIB advised on the refinancing and distributed the loan, delivering funding cost benefits for the concession company and French State.

In June 2015, the A63 toll motorway became France’s first single-asset toll motorway to be refinanced without credit enhancement. With SG CIB playing all the main roles in the transaction, both banks and institutional investors competed to invest in the EUR 860 million loan, ensuring that the concession company Atlandes significantly reduced its cost of funding.

Planning had started a year earlier in mid-2014. Connecting Bordeaux with the Spanish border, the 105km-long A63 had been completed ahead of schedule in 2013. Traffic revenues were in line with forecasts, underlining the merits of the project. But although the debt markets looked increasingly buoyant, achieving Atlandes’ objectives for lower financing costs and improved terms would require a clever financing strategy, backed by a full range of fund-raising and hedging solutions.

Atlandes and its shareholders - Colas, InfraRed, Spie batignolles, Egis, NGE and DIF - selected SG CIB as financial advisor, and the bank also acted as lead debt arranger and hedge coordinator. Atlandes, with close support from SG CIB, carefully planned its strategy, eventually opting for a floating rate loan rather than a bond. SG CIB distributed a portion of the transaction to institutional investors, as well as restructuring the original interest rate swaps.

“Societe Generale’s very strong advisory and arranging capabilities were instrumental in the success of this strategic transaction.”
Jacques Walckenaer, CFO at Atlandes.

“Given SG CIB’s long standing expertise in the infrastructure sector, we decided to retain them as our financial advisor and rating advisor, in order to drive the refinancing of the A63 motorway and extract optimal value for Atlandes, its shareholders and the French State,” said Jacques Walckenaer, CFO at Atlandes. “SG CIB’s very strong advisory and arranging capabilities were indeed instrumental in the success of this strategic transaction.”

“Societe Generale’s ability to handle all dimensions of infrastructure financing was key in improving the funding cost and financing structure to Atlandes,” explained Laurent Bouchilloux, SG CIB’s Head of Infrastructure Project Finance - Paris. “We were able to analyse whether bond or loan financing was the best option, and then combine bank and institutional investor liquidity to optimise competitive tension.”

The A63 is already delivering important economic benefits to Southwest France. The six-lane motorway allows more freight and holiday traffic to flow between France and Spain than the four-lane road it replaced. In future, more European toll road refinancing transactions are likely to follow the A63’s example, channelling more private funding into EU infrastructure.