MAG turns to bond markets for £450m injection
MANCHESTER Airports Group (MAG) has raised £450m on the bond markets to repay debt used in the £1.5bn acquisition of Stansted last year.
It said the 20-year bond with an annual return of 4.75% was four times oversubscribed.
The proceeds will also be used to support future growth as it looks to provide more routes and expand its passenger base of 42m passengers across four airports – Manchester, Stansted, East Midlands and Bournemouth.
Australian investor Industry Funds Management took a 35.5% stake in the group to help fund the Stansted deal. This means Manchester City Council now holds 35.5% and the remaining nine councils of Greater Manchester share the remaining 29%.
Chief financial officer Neil Thompson said: “The strength of the bond is testament to the strong performance of the group and demonstrates the confidence of a wide number of UK and international blue-chip investors in the MAG growth strategy. The funds place the group on an extremely sound financial footing with funding now in place for the long term.”
RBS was the arranger and debt adviser on the transaction, and Bank of America Merrill Lynch, Barclays, HSBC and RBS were book runners. Besides the four banks that led the bond, MAG’s bank syndicate currently comprises Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Canadian Imperial Bank of Commerce, Commonwealth Bank of Australia, Lloyds, National Australia Bank, Prudential Capital of the UK and Royal Bank of Canada.
Andrew Paulson, managing director of Debt Capital Markets at RBS, said: “MAG’s debut in the bond markets was very well received by investors. Buyers of the bond included insurance companies, pension funds and asset managers from the UK, Europe and Asia. Investors were attracted to MAG’s strong business profile and successful track record of asset stewardship. Our London and Manchester offices have been working with MAG’s management team for nearly two years to deliver today’s terrific outcome for the company.”
