Abertis will issue up to 5,000 million euros more to refinance its debt and support the purchase of assets in the world. The Spanish concessionaire thus challenges the market in full crisis of its main shareholder, Atlantia, which has caused the rating agencies to have lowered their ratings in recent weeks. The decision has been taken, at the same time, in full offensive of the group led by José Aljaro to acquire Brisa, the largest operator in Portugal, with an estimated operating value of 2,500 million euros.

The board of directors of Abertis agreed last week to expand the bond program it launched in March 2019 to repay the debt derived from the public acquisition offer (opa) of Atlantia and ACS on the concessionaire. In this way, the maximum amount of the plan has increased by 71%, from the original 7,000 million to 12,000 million. Through this program, called European Term Notes (EMTN) and listed on the Irish debt market, Abertis undertook during 2019 a total of eight issues for a joint amount (in constant currency) of 5,869 million euros.

The Spanish company still had room to continue borrowing from this plan – up to the initial 7,000 million – but has chosen to extend it to the low interest rates offered by the market and in a context in which the company has on the horizon operations of inorganic growth

Abertis returned last year to the capital market after several years of absence due to the corporate slowdown forced by the process of opa (duty of passivity). Not surprisingly, the previous issues dated back to 2016. Currently, the outstanding balance of the company's bonds that control Atlantia (50% plus one share) and ACS (has 30% directly and 20% minus one Hochtief share indirectly) amounts to 10,244 million euros. They are, in total, 19 bonds whose financial cost ranges between 5.99% of a small placement in 2008 and 0.625% that set in the issuance of 700 million last summer.

Abertis will seek to lower its financial costs even more, set in the first half of 2019 at 3%. After all, the average interest of the eight placements of last year reaches 1.97%, compared to 4.22% of the ten most expensive bonds, all prior to 2014.

Abertis' debt skyrocketed last year as a result of the debt program launched in Ireland to pay the bank loan of more than 9,000 million euros that Atlantia and ACS had assumed to acquire the concessionaire. Specifically, net indebtedness stood at 23,555 million euros in June 2019. This volume, therefore, is prior to the July and September emissions, for a total amount of 2,800 million.

Apart from the corporate bonds of the parent company, several subsidiaries of Abertis also issued debt in the last year for refinancing and growth. This is the case of Vías Chile, for around 500 million euros, Autopistas Metropolitanas (Metropistas), in Puerto Rico, for about 106 million euros, and Arteris, in Brazil, for about 374 million euros.

With the expansion of the bond plan by 5,000 million, Atlantia and ACS considerably increase the cushion so that Abertis continues to borrow. They do it in a scenario of uncertainties over the crisis in Atlantia, threatened by the transalpine government with the cancellation of the bulk of its concessions in Italy. In fact, this situation has caused the rating agencies to have cut the scores of both Atlantia and Abertis. Moody's and S&P have downgraded the rating of the Catalan-based concessionaire in recent weeks. However, the firms have highlighted the company's ability to overcome these difficulties and underlined the shielding represented by the parasocial pacts between ACS and Atlantia.

Asset purchases

With the additional 5,000 million, whose time horizon is not limited, Abertis may, in addition to refinancing debt, face corporate operations. The company resumed the investment path last October upon reaching an agreement, together with the Singapore GIC fund, to acquire the highway concessionaire in Mexico Red de Carreteras de Occidente (RCO) from Goldman Sachs. The disbursement for the Spanish group, which is already covered, is close to 1,500 million. Now, Abertis is in the race to buy 80% of the Portuguese Brisa from José Mello and Arcus, as advanced by 'elEconomista' on December 19. With an estimated value of more than 2,500 million, it competes with international and concessionary funds such as the Spanish companies Globalvia and Roadis.


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