NCE sister title Infrastructure Journal has reported that the £5bn M25 widening PFI is set for financial close after lead back HSBC secured all the banks needed to finance the deal.
Infrastructure Journal has reported that HSBC has committed interest from all the banks it needs to finance the debt package and now does not need all 21 that are signed up in principle. This includes RBS, which was understood to be taking a late interest.
It also means that the Highways Agency will not have to rely on the Treasury’s newly-created infrastructure lending unit or the Department for Transport to make up the shortfall, rumoured to be between £100M and £300M. This cash would have sucked funding from other projects.
“The M25 now reflects what a good number of banks said they needed. It has been changed materially over the last few months and is now a deal that banks want to do,” a senior banking source told IJ.
“A group of banks got together and passed on what they needed. When their conditions were met, suddenly it is a deal that most banks can do. This is now a very good deal and it should do very well.”
The project must reach financial close before the end of April in order for work to begin on schedule. Delays to the project start would seriously jeopardise the scheme vital sections would not be complete in time for the 2012 Olympics.