At its October 23 session, the government approved the re-financing of the project of the R1 express-way project between Nitra and Banská Bystrica via a public-private partnership (PPP) format, meaning that the original bank loan will be replaced with the issuing of a project bond with a maturity date set for 2039. Therefore, the overall volume of the issue will equal €1.25 billion, with the final sum of saved resources depending on the placement and underwriting of bonds.
The re-financing was proposed by the concessionaire, Granvia, and the approach drafted in co-operation with two international financial institutes: Deutsche Bank and HSBC. According to the former, preliminary testing showed that there is interest on the market in the bonds, the rating of which is estimated by Standard & Poor’s agency at grade BBB+.
“Such positive rating evaluations indicate that bonds are likely to be sold on advantageous terms,” said the Transport Ministry, as quoted by the TASR newswire.
It might save the state a minimum of some €130 million or approximately €5 million in annual instalments, Transport Minister Ján Počiatek said after the government session on October 23. “We expect that the state could save at least €130 million in the state budget,” claimed Počiatek.
Počiatek added that the amount of savings stemming from the re-financing shall depend on the conditions of the bond subscription. It shall be complete by the end of November, SITA wrote. The resources saved from the refinancing will be divided between the Transport Ministry – 90 percent – and Granvia – 10 percent.
The construction of about 51 kilometres of E1 through the PPP cost almost €900 million, with a consortium of 12 commercial banks and the European Bank for Reconstruction and Development participating. The first three sections of R1 within PPP, between Nitra and Tekovské Nemce, about 45 kilometres long, have been in operation since October 2011 and the northern bypass of Banská Bystrica 5.7 kilometres long since July 2012.
(Source: TASR, SITA)
Compiled by Zuzana Vilikovská from press reports
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