Gordie Howe bridge looks to bond markets
The group picked to build a new bridge between Canada and the U.S. is planning to raise money in the Canadian bond market to fund the project expected to cost about $3.5 billion (US$2.6 billion), people familiar with the matter said.
Bridging North America General Partnership (BNA), slated to build the Gordie Howe International Bridge between Windsor and Detroit — one of the world’s busiest trade corridors — began three days of meetings with Canadian fixed-income investors on Wednesday, according to people who asked not to be identified as the talks are private.
The executives will discuss the sale of a dualtranche $454-million offering of senior secured notes in meetings in Toronto and Montreal, organized by RBC Dominion Securities Inc. and HSBC Securities Canada Inc., the people said. The transaction will include $163.5 million of notes with a 3.644-per-cent coupon due May 2038, and $291 million of 4.058-per-cent securities due August 2053, according to S&P Global Ratings which assigned a A-minus rating to the bonds in an Aug. 29 report that put the project cost at $3.46 billion.
Proceeds from the bond sale, alongside a $587-million loan facility, will help build the bridge, according to S&P. The majority of the rest of the funding will come from the Windsor-Detroit Bridge Authority, a Canadian government corporation which is granting the concession, in the form of progress payments.
WDBA picked BNA to build the bridge in July and plans to make the company a private sector partner, said Mark Butler, a Windsorbased spokesman for WDBA. “That’s contingent on them reaching financial close and we fully expect that to happen by the end of September,” he said.