Network Rail closes £4bn financing
In a landmark transaction, Network Rail has secured £4bn of
financing facilities through a complex commercial paper programme.
Barclays acted as facility agent on the supporting liquidity facility,
while HSBC acted as Security Trustee and Merrill Lynch as arranger
of the CP programme. All three banks and the hedge counterparties
were advised by international law firm Freshfields Bruckhaus Deringer,
which previously advised two of the banks involved in the £10bn
refinancing of Network Rail in October 2002, following the release
of Railtrack from administration.
Simon Hall, co-head of Freshfields Bruckhaus Deringer’s
finance practice, advised Barclays, and commented, “This is
a groundbreaking piece of work. Clearly the size of the transaction
makes it significant, but the structure itself is of interest. There
are some complex inter-creditor arrangements involved, and the structure
is supported by the Strategic Rail Authority. This transaction has
established the parameters for the future fundraising activities
of Network Rail.”
Network Rail intends to commence issuing notes in
early July in various currencies in the euro and U.S. markets. While
Merrill Lynch is the arranger of the programme, the dealers are
Barclays Capital, Citibank, HSBC, Merrill Lynch, RBC, Royal Bank
of Scotland, UBS and WestLB. The CP programme is supported by a
£4bn standby loan facility provided by the Strategic Rail
Authority and a £1bn standby commercial bank liquidity facility,
for which Barclays is acting as agent.
Simon Hall led a team including associates Andy
Kolacki and Dan Webster (for Barclays), partner David Winfield and
associate Simon Woods (for HSBC), partner Jeremy Pitkin and associate
Nicholas Lasagna (for Merrill Lynch) and partner Peter Green and
associate Jason Lee (for various hedge counterparties).
Allen & Overy’s Nick Williams and Hugh
Kelly represented the SRA and Linklaters’ Anne Hoe and Mairead
Ni Dhonncha advised Network Rail.
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