Highway to Venice: refinancing the Passante di Mestre toll road


The largest italian project bond ever issued for the first green motorway in Italy. 

The Passante di Mestre is the 32.3 km stretch of motorway allowing drivers to avoid a very busy area around Venice (the Mestre ring road). The immediate effect has been streamlining the always very intense traffic flows and a reduction in the number of accidents.

To finance its construction, Societe Generale assisted CAV - Concessioni Autostradali Venete, the company licensed to manage it, in the role of documentation bank and bookrunner and with emission of an 830 million euro Project Bond.

This Project Bond is the largest ever issued in Italy and it is the first to benefit from credit enhancement for 20% of the debt by the European Bank for investments. 

“The Passante will be a permanent laboratory dedicated to new technologies, to communication systems and to traveller safety,”  Laura Serato, president of CAV.

Operative since 2009, the Passante is a true vital artery for Italy. It is located in one of the most advanced areas of the country in terms of economy and tourism (and therefore with the highest traffic), as well as being a fundamental hub for that Trans European Network that represents the main crossroads between central, eastern and western Europe. In 2015, traffic on the Passante di Mestre registered a record increase in Italy of 5.5% compared to the previous year. These are precisely the records that enabled the bond to obtain a Moody’s preliminary rating of A3 with stable outlook, two notches higher than the Republic of Italy (Baa2). The bond also has a very high coupon at 2.1% (parameters also based on the performance by the equivalent average length multi-year treasury bonds, which is today very low), which will translate into lower toll fees and therefore considerable savings for single users who frequently travel on this stretch.

But the role of Societe Generale was not limited purely to emission of the Bond. “If the project bond legal framework has managed to benefit from the improvements introduced to the Tender Code by the 2014 Sblocca-Italia decree (for example: elimination of the nominative form of bonds, the introduction of security agents and the general privilege on credit deriving from the licence), it is also thanks to us. We sat down at the table with the Ministry of Infrastructures and Transport to propose modifications to the law on project bonds,” explains Massimiliano Battisti, Head of Infrastructure and Asset Backed Finance in Italy, at Societe Generale. “Our proposals were listened to and adopted by the government and today emission of this bond is a reality.”

With this bond, which attracted important foreign investors – with 57% of the debt in fact placed outside Italy (in Germany, France, Benelux and the UK), Societe Generale is among the true pioneers on the Italian Project Bond market.

But the Passante di Mestre will also be the first “green motorway” in Italy, given that a 150-hectare will run alongside it, which is already being built. “The Passante will be a permanent laboratory dedicated to new technologies, to communication systems and to traveller safety,” explained Laura Serato, president of CAV, “with special focus on the environment and tourism.”