Plenary achieves financial close on Pennsylvania Rapid Bridge Replacement Project

Plenary is pleased to announce it has achieved financial close on the US$899 million Pennsylvania Rapid Bridge Replacement Project, the first public private partnership (P3) to bundle multiple bridges in a single procurement in the U.S. and Plenary’s third U.S. project to close.

Plenary is the project sponsor, financial arranger and an 80% equity investor for the Plenary Walsh Keystone Partners consortium, which has been contracted by the Pennsylvania Department of Transportation (PennDOT) to deliver the project.

The Plenary Walsh Keystone Partners consortium also includes The Walsh Group, Granite Construction Company and HDR. The team will rely heavily on local subcontractors to deliver the project.

Plenary Concessions’ Chief Operating Officer for Civil Projects, Matt Girard, was encouraged by the way Plenary Group’s financing team and its partners at PennDOT had worked together to achieve this significant milestone.

“This process has resulted in a solid partnership between Plenary and PennDOT that will now underpin the rollout of what will be a challenging 36-month construction program and the 25-year maintenance term that will follow for each bridge.”

Mr. Girard said the consortium’s attention had already turned to quickly mobilizing its local teams that are ready for construction kick off in May 2015, with a projected completion date of December 2017.

Under the P3 contract, Plenary Walsh Keystone Partners will finance and manage the design, accelerated construction, financing, maintenance and rehabilitation of 558 geographically dispersed, structurally deficient bridges across the state over a 28-year contract term. PennDOT will be responsible for routine maintenance such as snow plowing and debris removal.

To ensure PennDOT’s construction program is met, Plenary Walsh Keystone Partners has taken a local approach to construction, utilizing 18 different Pennsylvania-based subcontractors to leverage local knowledge and existing sub-contractor networks.

The consortium successfully priced US$721,485,000 of tax-exempt Private Activity Bonds (PABs) on February 24, and has now achieved Financial Close 22 days later as scheduled. The BBB rated PABs priced at a premium, were oversubscribed, and were purchased by over 40 different investors. J.P. Morgan and Wells Fargo acted as the underwriters.

Plenary Group will be supplying 80% of the equity financing, with the remaining 20% coming from Walsh Investors.

This is the third project to be closed by Plenary Group’s rapidly-expanding U.S. business. Plenary’s other projects in the U.S. include the U.S. 36 Managed Lanes in Denver, Colorado and the SH 183 Managed Lanes project in Dallas, Texas.

Plenary is targeting Financial Close on its fourth U.S. deal, the Long Beach Civic Center in California, for late 2015.