Behind infrastructure’s gold rush
The £9 billion ($17 billion) buyout of BAA by Spain’s Ferrovial in March this year crystallized the changed attitude towards infrastructure among capital markets investors. Indeed, the deal took the market by surprise – particularly investors that had bought BAA’s €2.85 billion bond issue the week before Ferrovial revealed its hand. Several investors in that issue (which had no change of control clause) report that the company had dismissed any suggestion of a buyout during the roadshow, indicating that the company was simply too big to be bought out. Ferrovial’s move shows that in this credit environment no one is too big any more.
This is in no small part due to the kind of leverage multiples that infrastructure companies can now finance themselves at – the high teens. The BAA deal itself was predicated...
