Legal & General finances LAX ConRAC with $173m of debt
11 Dec 2018
LGIM Real Assets (“LGIM RA”) announces that it has completed its largest infrastructure debt transaction in the USA having provided, on behalf of its clients including Legal & General Retirement Institutional (LGRI), c.$173 million in long-term financing to LA Gateway Partners, LLC (“LAGP”)*.
LAGP has been selected by Los Angeles World Airports (“LAWA”) to deliver a Consolidated Rent-a-Car Facility (“ConRAC”) at Los Angeles International Airport (“LAX”) under a long-term Public-Private Partnership (“P3”) contract.
LAX is one of the busiest origin and destination airports in the US and the 5th busiest airport by passenger numbers in the world. As a result, there is significant pressure on the existing infrastructure within the vicinity of the airport. LAWA has embarked on a c.$5.5 billion Landside Access Modernization Program, a project which seeks to improve access, reduce traffic congestion, provide more travel time certainty and improve air quality in and around LAX.
In support of this project, LGIM RA has provided long-term debt to facilitate the design, construction, financing, commissioning, operations and maintenance of the LAX ConRAC. Rent-a-car facilities are currently dispersed around LAX, with customers having to travel by mini bus to and from the terminal, adding to the existing congestion and poor air quality around the airport. The LAX ConRAC, which is expected to be operational by mid-2023, will see the construction of a c.5.3 million square foot facility that will consolidate the numerous rent-a-car companies into a single facility. This will be connected to the terminal buildings through rail transportation, seeking to relieve existing congestion from around the vicinity of the airport and improve passenger journey times.
Tom Sumpster, Head of Infrastructure Finance, LGIM Real Assets, said; “We are delighted to be providing $173 million of debt financing to support both LAGP and LAWA in a significant infrastructure upgrade to one of the busiest airports in America. Having made our maiden infrastructure debt investment in the US in 2016, our involvement in this high-profile transaction demonstrates how quickly LGIM RA has built its profile in America. We will continue to be active in this competitive market as we seek to deploy further capital in the US.”
...this important infrastructure project [which] will greatly enhance the passenger experience for travellers using Los Angeles Airport (LAX). This transaction further demonstrates our global reach, as well as our commitment to connecting pensions to the real economy. Our investment will improve people's lives and living environment, while securing the pensions of our members.
Eleanor Bucks, Managing Director, Direct Investments and Real Assets, Legal & General Retirement
For further information
LGIM Real Assets
Harriet de Beaufort-Suchlick
Capital and LGIM Real Assets
T: +44 (0) 20 3124 4879
* Los Angeles Gateway Partners (“LAGP”) is a special purpose vehicle created by Fengate Asset Management and PCL Construction.
Notes to editors
LGIM Real Assets
LGIM Real Assets is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £983.3bn in assets on behalf of over 3,200 clients (as at 31 Dec 2017), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has AUM of £27bn (as at 31 Dec 2017), actively investing and managing assets across commercial property, private residential, infrastructure and property lending and, most recently, corporate credit.
Legal & General Group
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with a number of growing businesses in the US. Over fifteen million people worldwide rely on us to help them save for the future and to protect their families and their homes.
We operate in three principal areas:
- Investing & Annuities, where we manage £58bn of retirement annuities for policyholders and invest for their long term return within Legal & General Retirement, as well as investing our own balance sheet within Legal & General Capital;
- Investment Management, where we have £983bn in total assets under management from clients in the UK, US, Asia and EMEA and a leading UK workplace savings and retail investments business within LGIM; and
- Insurance, where we provide protection against life events for customers, with £2.9bn of gross written premiums principally in life insurance in the UK and US within Legal & General insurance and household insurance in the UK within our General insurance division.