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By Josie Cox and John Geddie
LONDON, March 19 (IFR) - Merseylink PLC is preparing to issue a GBP290m 29-year bond guaranteed by the UK Treasury, in order to finance part of a bridge over the River Mersey in the North West of England.
Merseylink has hired HSBC as sole arranger, and Credit Agricole, HSBC and Lloyds Bank as joint bookrunners to arrange a series of UK investor meetings starting March 21 ahead of the placement.
The bond, which will be rated Aa1 stable by Moody's to reflect the underlying government support, will form part of the GBP600m construction costs of the Mersey Gateway Bridge project.
The deal falls under a GBP40bn government guarantee scheme that runs until 2016. The Treasury has named 23 projects as having pre-qualified for such government support, including Merseylink, according to its latest list published February.
So far only one of those projects has had a capital markets component: a GBP75m private placement for the Drax biomass conversion project which was arranged by Barclays.
Merseylink will be a much larger undertaking, although will not require as much debt issuance as the controversial nuclear power plant at Hinkley Point, which is expected to account for around a quarter of the total scheme.
(Reporting By Josie Cox and John Geddie; editing by Sudip Roy, Julian Baker)
((josie.cox@thomsonreuters.com)(+44 20 7542 8324)(Reuters Messaging: josie.cox.thomsonreuters.com@reuters.net))
Keywords: MERSEYLINKBONDS
