Keys to the Keystone state

20 May 2008 By Lauren Silva

Citigroup partnered with Spain’s Abertis to buy Pennsylvania’s turnpike. It will have a large debt offering and will tap several different markets. The deal won t be easy. But stable cash flow and lower return expectations make these deals more feasible than buyouts.

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Citi Infrastructure Investors and Abertis Infraestructuras with Criteria CaixaCorp have won a 75year least of the Pennsylvania Turnpike. The group bid $12.8bn. The concessionaire will also implement a capital investment plan in excess of $5.5 billion.

This is a great day for Pennsylvania, Governor Rendell said. We urgently need new funding for road and bridge repair, and a turnpike lease will help us meet that need. Under the terms and conditions we set, the turnpike will be upgraded and tolls will be no higher than the Turnpike Commission will charge.

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

A second place bid of $12.1 billion was submitted by a group led by Goldman Sachs. A Macquarieled consortium made a third bid but did not advance to the final round on because its bid was not within 10 percent of the highest initial bid, the state's press release said. The bank bid $8.1 billion, according to Bloomberg.

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