Macquarie and Pension Insurance Corporation deliver innovative CPI-linked ECA financing for Teesside Renewable Energy Plant
London, 22 Sep 2016
Macquarie Specialised Investment Solutions (MSIS) has structured an innovative Consumer Price Index (CPI) linked, Export Credit Agency (ECA) guaranteed infrastructure debt investment, delivering £100 million of financing for the construction of the Teesside Renewable Energy Plant.
The debt was structured and placed in partnership with Pension Insurance Corporation (PIC), a specialist UK insurer of defined benefit pension funds. The £100 million transaction will support the construction of the 299MWe Teesside Renewable Energy Plant in the North of England which has a UK Government-supported Contract for Difference.
Peter Lucas, Head of MSIS said: "We are delighted to have partnered with PIC and Finnvera on this transaction. We brought together a unique combination of skills within our Macquarie Infrastructure Debt Investment Solutions and Specialised Capital Solutions teams to employ market leading expertise both in ECA financing and in structuring bespoke infrastructure debt transactions to meet the needs of institutional investors."
The transaction highlights the increasing role being played by institutional investors in financing major infrastructure projects - accessing high quality debt investments for liability matching purposes and earning illiquidity premium by operating buy and hold investment strategies.
Elizabeth Cain, Debt Origination Analyst at PIC added "This investment is not only an important piece of UK infrastructure, but also provides a high quality long-dated debt investment to support payment of pensions as part of our prudent investment strategy. It also represents one of a small number of CPI-linked transactions in the market, which PIC has been at the forefront of developing with a view to supporting UK pension schemes seeking to transfer their CPI-linked liabilities."
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Founded in 1969, Macquarie operates in 64 office locations in 28 countries and employs more than 14,300 people. Assets under management total approximately £256 billion at 31 March 2016. For more information, visit www.macquarie.com.
About Macquarie Specialised Investment Solutions (MSIS)
MSIS is a division within Macquarie Asset Management, Macquarie Group’s asset management business. MSIS provides debt solutions across a number of sectors including infrastructure, hedge funds and private equity funds, ship financing as well as Export Credit Agency backed facilities. The division is recognised for product innovation, with a strong track record of delivering tailored solutions to the market.
Pension Insurance Corporation plc ("PIC") provides tailored pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension funds. PIC brings safety and security to scheme members' benefits through innovative, bespoke insurance solutions, which include deferred premiums and the use of company assets as part payment. At 30 June 2016, PIC had £18.4 billion in assets and had insured more than 130,000 pension fund members. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345).