MIDIS structures £502 million debt facility for Quad Gas Group

• Combined offering of fixed, floating and inflation-linked infrastructure debt
• Tailored financing based on MIDIS’ ability to participate in infrastructure M&A processes
• Investment marks the final deployment of MIDIS’ first UK inflation-linked fund

Macquarie Infrastructure Debt Investment Solutions (MIDIS) has structured a £502 million financing for the Quad Gas Group, to be used to part fund the acquisition of a 61 per cent shareholding in National Grid plc’s UK gas distribution business.

The £502 million financing is the largest lender participation in the acquisition debt structure, solely arranged by MIDIS and invested in by managed clients of MIDIS and Barings. The financing provided a flexible package for the winning consortium offering fixed, floating and inflation-linked debt tranches, with maturities ranging from 20-25 years.

James Wilson, co-head of MIDIS said: “The MIDIS debt financing has been specifically structured for the acquisition, driven by our deep understanding of infrastructure M&A and debt processes. This is a very significant deal for us, not only as it represents a unique opportunity for our investors in a long-term, private deal with a blue chip regulated utility, but because it is the final deployment of our first UK inflation-linked infrastructure debt pooled fund.”

The allocation completes the final investment of MIDIS’ first UK Inflation Linked Infrastructure Debt Pooled Fund. The fund’s £829 million of commitments were made across 15 investments – more than 80 per cent were inflation linked - with maturities ranging from 18 to 40 years. This pooled fund formed part of a wider £1.5 billion fundraising for the UK inflation-linked debt strategy, which has deployed funds on behalf of a number of major UK pension funds to support their liability driven investment strategies.

Following first close in November 2014 and now fully invested only 26 months later, MIDIS’ first fund targeted UK pension schemes seeking debt investments to match their long-dated inflation-linked liabilities and paved the way for MIDIS’ second UK inflationlinked pooled fund - which adopts the same strategy and is open only to institutional investors.

Since 2012, MIDIS has invested over £2.8 billion in infrastructure debt transactions, across 44 projects in the renewables, transport and utility sectors globally.