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December 22, 2010

AFL plays important role in first Russian PPP financed by infrastructure bonds


Deutsche Bank’s Asset Finance & Leasing group (AFL) played an important role in the structuring and financial close of Moscow-Minsk M1’s EUR 750m highway project, financed through Russia’s first major infrastructure bond.

The project consists of the construction of a 19km, six-lane highway between the Moscow ring road and the existing motorway (Federal Road M-1 ‘Belorussia’) to Minsk. The project bears full traffic risk and will ease congestion around the greater Moscow Metropolitan Area.

Subject to the completion of milestones, the Russian State Investment Fund will provide capital grants of EUR 260m towards the financing of the project.

The consortium, jointly advised by Deutsche Bank and Gazprombank, was led by the leading Russian asset manager ‘Leader’ (a closed joint-stock, investment company). It was originally set-up in cooperation with FCC-Alpine and Brisa. Deutsche Bank brought a wealth of experience from similar international projects and was instrumental in tailoring the structure and steering the financing process in the Russian post-crisis environment.

The infrastructure bonds received a Russian credit rating equal to ‘A Stable’ and were significantly oversubscribed. The infrastructure bond issuance, arranged by Gazprombank, was the first of its kind in the Russian capital markets. The bonds have an 18-year maturity and will pay a coupon linked to a combination of the Russian Consumer Price Index and Russian GDP.

The Moscow-Minsk M1 highway project is one of two pilot projects in the expanding market for Russian Public Private Partnerships (PPP).

Thomas Rueschen, Global Head of Asset Finance & Leasing said: “Deutsche Bank’s key involvement in this landmark Russian transaction demonstrates the Bank’s strength in the global infrastructure sector and the success of our strategy for the Russian market.”

Bernd Fislage, Head of AFL Project Finance, Europe & North America, added: “This achievement puts Deutsche Bank in an ideal position to advise on current and future major Russian infrastructure projects, such as the high-speed railway projects across Russia, and the country-wide municipal upgrading programme for major Russian cities, where Deutsche Bank is already advising one bidder on the Yanino waste processing plant project in St Petersburg.”


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