Pension Insurance Corporation has invested 拢100m (鈧�131m) in the Thames Tideway Tunnel (TTT), participating in an inflation-linked debt issue to fund the London sewer.
The 拢100m deal, listed on the London Stock Exchange, comes in addition to a 拢250m issue announced by Bazalgette Tunnel Limited on 16 June, part of its efforts to finance 拢3.1bn of the 拢4.2bn project, which will modernise the UK capital鈥檚 ageing sewer network.
PIC鈥檚 investment is in inflation-linked debt issued by Balzalgette, the special purpose company formed to construct and operate the tunnel.
PIC said the debt would be split across four tranches and be drawn down over a 4-5 year period.
Allen Twyning, head of debt origination at PIC, said the insurer was 鈥減roud to have become a significant investor鈥� in the project.
鈥淔or us,鈥� he added, 鈥渢he long lifetime of the project and the secure cash flows are a very good match for the pension payments we are committed to making decades into the future.鈥�
Pedro Madeira, treasurer at Bazalgette, added that PIC was 鈥渆xactly the kind of investor we want to invest in Tideway鈥�.
鈥淧IC was flexible in helping us conclude this transaction,鈥� Madeira said, 鈥渁nd there was a high degree of cooperation and goodwill in working around the clock to agree documentation.鈥�
In its separate announcement to the London Stock Exchange about the 拢250m transaction, Bazalgette said it would be split in three tranches, maturing over three years to 2052, with deferred purchase dates also staggered over three years starting in June 2018.
PIC has long been interested in the project, with Twyning telling IPE Real Estate sister publication IPE in late 2014 that it looked .
The project has attracted support from a number of local and European pension investors, including and UK pension funds backing the Pensions Infrastructure Platform.
The UK investors in 2015 and are now among the shareholders of Bazalgette, alongside Allianz and Amber Infrastructure.
The European Investment Bank last month also announced it would .
