Chicago Skyway Toll-Road Concession Mulls US Bond Issue

Tuesday November 16, 2004

MADRID (Dow Jones)--A consortium led by Spanish public works company Cintra SA (CIN.MC) that won the 99-year concession to run the Chicago Skyway toll road is considering two bond issues in the U.S.

The bond issues - with maturity of 40 to 45 years - will be used to refinance part of the debt used for the project.

Depending on market conditions, a first bond issue could be launched some time next year, Jose Maria Lopez de Fuentes, Cintra's U.S. manager, Tuesday told reporters after a company presentation on the Chicago Skyway project.

The winning consortium is made up of Cintra, with a 55% interest, and Australia's Macquarie Infrastructure Group (MIG.AU) with a 45% stake.

The Skyway project requires an investment of $1.82 billion. Cintra will pay $500.5 million, while Macquarie will disburse $409.5 million in January.

The rest is financed by a $1.190 billion syndicated credit from Banco Santander Central Hispano (STD, Calyon, Banco Bilbao Vizcaya Argentaria SA (BBV) and Germany's Depfa Bank (DEP.XE).

The credit will have three tranches: the first for $1.02 billion, the second for $90 million and the third for $80 million.

The potential bonds already have investment grade as the preliminary rating by S&P and Moody's.

During the Cintra presentation, the company's chief executive, Juan Bejar, also said he expects traffic on the Chicago Skyway to grow by at least an annual rate of between 4% and 8%.

In 2003, the Chicago Skyway saw nearly 48,000 vehicles a day, which translated into toll revenue of $39.7 million. That compares with just over 51,200 vehicles and a toll revenue of $43.9 million in 2001.

Traffic levels seen in 2001 won't be recovered until 2007-2008, Bejar said.

Inaugurated in 1959, the Chicago highway connects the Dan Ryan Express Way, south of Chicago, with the Indiana Toll Road, giving access to Indiana, Michigan and the north-western states.

Also in the U.S., Cintra has made the shortlist for a $1.07 billion project in the U.S. to design, develop, build, finance and operate a 44-kilometer toll-road between Dallas and Fort Worth in Texas.

Cintra is also bidding on the Trans Texas corridor, an infrastructure project worth $150 billion. In Europe, the company is pursuing seven toll-road projects in Portugal, Greece, Italy, Ireland and Finland.