Macquarie and Heathrow partner on £115m inflation linked debt financing

Macquarie Infrastructure Debt Investment Solutions (MIDIS) has provided a unique form of inflation linked financing to Heathrow, as it continues to deploy capital raised from institutional investors in 2014. 

MIDIS worked closely with Heathrow to lend a £115m inflation linked Class B note that matures in 2036. The note is believed to be one of the first of its kind being inflation linked, delayed settlement and at the Class B level. It is also believed to be one of the longest Class B notes ever completed.

The funds come from investments into Macquarie’s infrastructure debt strategy platform which comprises of a pooled fund and separately managed accounts. MIDIS has raised total commitments of £979 million [$1.56 billion] from 11 major institutions to invest in UK inflation linked debt and is targeting investment-grade issuers in sectors such as utilities, renewables, transport and social housing. Today’s deal follows the financing of seven on-shore wind farms by MIDIS last December.

Kit Hamilton, Associate Director, MIDIS: “Heathrow represents the kind of investment opportunity that is very attractive to institutions and pension funds today. It is an established infrastructure issuer with a strong management team operating in a regulated sector. We were able to work quickly with Heathrow on a unique instrument that met their borrowing needs and provided the long-term inflation linked returns our clients require.”

Andrew Efiong, Director of Treasury at Heathrow said: “We were attracted by Macquarie’s ability to offer a financing product tailored precisely to our needs. They came to the table with committed funds from long-term investors and were able to complete the financing in very short order. This facility will help us continue to invest in and develop Heathrow for the future.”