Cintra closes 2.78 billion dollars financing for the LBJ Freeway in Texas

Press releases

  • The 27.2 kilometer road is located in the metropolitan area of Dallas, Texas. The concession period is 52 years.
  • The project will have a dynamic (varies throughout the day depending on degree of congestion), electronic free-flow tolling system, to ensure a high level of service and smooth traffic movement.
  • Ferrovial is the largest Spanish infrastructure company in the US. With this project, the company will manage investments worth 9.55 billion euro.

Madrid, 17 June 2010.- LBJ Infrastructure Group, a consortium in which Ferrovial subsidiary Cintra has a majority stake, has successfully secured the placement of Private Activity Bonds (PAB), which signifies the last phase of the 2.78 billion dollars financing (2.26 billion euro) for the LBJ highway (IH-635) in Texas, USA. The company expects to sign the relevant documentation for financial closure next week.

The 21.2 kilometer highway, which will be operated under a "managed lanes" system, is located in the Dallas metropolitan area; the concession period is 52 years. The project involves constructing, maintaining, managing and financing the highway, which is expected to enter into operation progressively from 2013 to 2015.

Enrique Díaz-Rato, CEO of Cintra, said that: "reaching financial closure on a project of this size, in such volatile financial market conditions as those we are currently experiencing, is a real success. The financial closure of the LBJ comes on top of the successful financial closure of the North Tarrant Express, also in Texas in December, demonstrating the markets interest in highquality assets."

"The LBJ further strengthens our privileged position in the transport infrastructure sector in the U.S., especially in Managed Lanes projects, which aim to solve the problem of congestion in urban environments due to the lack of space to develop new routes. The new technological component of this type of project allows us to be, once again, at the forefront of the industry, with the resulting competitive advantages that this entails, explains Díaz Rato.

The project has been funded from four sources. Firstly, LBJ placed 615 million dollars of PABs (Private Activity Bonds) in the US municipal bond market on 15 June. In spite of the challenging conditions of the financial markets, this transaction was very well received by investors. Moreover, the Texas Department of Transportation (TxDOT) will invest close to 490 million dollars of public funding in the project. The US Federal Government has also granted a TIFIA credit of 850 million dollars.

Additionally, the three partners in LBJCintra (51% stake), Meridiam (42.4%) and the Dallas Police and Fire Pension System (6.6%)will contribute close to 672 million dollars in proportion to their stakes. In December 2009, Cintra closed funding amounting to 2 billion dollars for the North Tarrant Express toll road in Texas, in the important Dallas-Fort Worth corridor, one of the most congested routes in the US. The toll road measures 21.4 kilometers (13.3 miles).

The LBJ will use an electronic free-flowing tolling system, which will allow for smooth traffic movement and increase traffic carrying capacity. Tolls will be set dynamically on the basis of demand, and will vary throughout the day with the goal of providing users a safe and reliable level of service. Traffic on the road will be monitored in real time so as to keep vehicles moving at no less than 50 miles per hour in all segments.

Investments in the USA

Ferrovial is one of Spain's leading investors in the US and its largest investor in US transport infrastructure. Through Cintra, it has five toll road concessions which are operational or under construction: Chicago Skyway, Indiana Toll Road, SH 130, and the aforementioned NTE and LBJ. These five highways together represent a total investment of close to 9.8 billion euro. The two new projects in Texas (NTE and LBJ) will entail investment of close to 3.9 billion euro in the coming years.

Ferrovial also owns Texan construction company Webber, one of the state's leading civil engineering firms. Acquired by Ferrovial Agroman in 2005, Webber will work on the NTE project. Last year Webber reported 366 million euro in revenues. Ferrovial Servicios also operates in the US through subsidiary Swissport, which provides handling services at 48 US airports.


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