Paved with gold

20 May 2008 By Fiona Maharg-Bravo

The Spanish construction group and Citigroup s infrastructure fund have stretched themselves to the limit to pay $12.8bn for the Pennsylvania Turnpike. The pair is targeting returns in the low double digits a level that looks meagre for this kind of deal.

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Abertis Infraestructuras and Citigroup Infrastructure Investors, along with Criteria CaixaCorp, this week won a 75year lease of the Pennsylvania Turnpike. The group bid $12.8bn. The concessionaire will also implement a capital investment plan.

The deal is pending legislative approval from both the House of Representatives and the Senate in Pennsylvania.

A second place bid of $12.1bn was submitted by a group led by Goldman Sachs.

Abertis said total financing for the deal would total $14.5bn, $6bn from the three partners and $8.5bn in debt – including $7.5bn of senior debt and $1bn of junior debt.

The Spanish group said it estimated shareholder returns in the low double digits".

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