In May 2008, Calyon acted as mandated lead arranger and joint bookrunner, with 8 other Tier 1 banks, in the EUR 708 million refinancing of Autema toll road concession and associated inflation swaps. Autema is owned by Cintra and Abertis.

This transaction is a good example of Calyon's strong cross-selling capabilities. It was highly successful thanks to the close cooperation between Project Finance and Fixed Income Markets teams, together with the important support from Paris inflation trading team. This also offered Calyon at the same time an opportunity to develop its position in the Spanish inflation market.

The transaction was highly rewarded by the sponsors, as it was instrumental in monetizing the majority stakes of Abertis and Cintra in the project far in advance of the end of the concession agreement, executed under very difficult market conditions.

Autema is a major toll road located in the Catalonian region. The concession enjoys a level of EBITDA guaranteed by the AA-rated Catalonian Government over the concession period. The concession therefore does not retain any traffic risk.

Abertis is Spain's leading private company in the management of transport and communications infrastructure.

Cintra is one of the leading private developers of transport infrastructure in the world in terms of number of projects and investment volume. It also dominates the car park sector in Spain.

The project:

The project comprised the refinancing and recapitalization of Autema for a total long-term debt amount of EUR 708 million. In conjunction with the project debt, two 27-year hedging contracts were structured to cover the interest rate risk and the inflation risk.

Revenues of Autema are annually adjusted according to the evolution of the Spanish inflation. The project is therefore adversely exposed to low inflation scenarios, in which the toll rates to be received are lower than the ones theoretically estimated in the Base Case. The objective of the inflation swap is a two-fold:

• reduce variability of inflation-related cash flows by agreeing a fixed inflation rate for the Base Case,
• improve the risk profile of the debt by allowing the Concessionaire to agree a Base Case with the Lenders. This implied a more certain forecasted cash flow generation at closing, as Lenders were willing to agree on a higher long-term inflation rate and ultimately on a higher project debt amount.

Therefore, by swapping the annual inflation, the revenues achieved by the project are increased by the differential between the actual inflation rate and the swapped inflation rate.