Allens acts on string of bond deals for infrastructure companies

Allens has acted on the latest example of a single asset infrastructure company entering the domestic debt capital markets.

Perth Airport Pty Ltd, a subsidiary of Perth Airport Development Group which operates and maintains Perth Airport, issued A$400 million bonds due 2021. The deal was arranged by National Australia Bank and Westpac Banking Corporation.

The Allens team was led by Partner and Head of Debt Capital Markets James Darcy.

Mr Darcy also advised on several other recent bonds issuances by Australian infrastructure entities, including issuances by AMT Management (operator of the Eastern Distributor road in Sydney), ConnectEast (operator of EastLink road in Melbourne), port operator Adani Abbott Point, as well as Perth Airport's previous bond issuance in July 2013.

According to Mr Darcy, this deal represents a further example of the rising confidence of the Australian debt capital market in infrastructure companies falling in the BBB- to BBB+ ratings range.

Mr Darcy said that single asset infrastructure companies are increasingly seeking to diversify their debt through the Australian debt capital markets.

'Since the decline of the monolines, Australian infrastructure assets have predominantly been funded through shorter term bank debt. We are now seeing increasing activity from single asset infrastructure companies seeking diversification in the domestic bond market as well as offshore capital markets,' Mr Darcy said.

'This is particularly the case for brownfield assets with an operating history and predictable cashflows,' Mr Darcy said.

A further noticeable trend is the availability in the domestic bond market of seven year debt for infrastructure companies.

'Infrastructure companies are clearly interested in obtaining longer term tenor to better match the longer term nature of their asset base. We have seen an increase in seven-year bond issuances over the past year, and in many ways seven has become the new five in terms of tenor. The question is whether the domestic market can stretch out to tenors of 10 years and beyond, something many in the market would be keen to see.'

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