Detroit Bridge Inches Closer as Project Prepares to Sell Bonds
(Bloomberg) -- 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 C$3.5 billion ($2.6 billion), people familiar with the matter said.
Executives at the Bridging North America General Partnership (BNA), which is 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 dual-tranche C$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 C$163.5 million of notes with a 3.644 percent coupon due May 2038, and C$291 million of 4.058 percent securities due August 2053, according to S&P Global Ratings which assigned a ‘A-’ rating to the bonds in an Aug. 29 report that put the project cost at C$3.46 billion.
Proceeds from the bond sale, alongside a C$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 sign an agreement that will make the company a private sector partner, said Mark Butler, a Windsor-based 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 in a phone interview.
Final details, including cost and construction schedule, are yet to be decided, Butler said.
BNA is owned by units of Madrid-based ASC Actividades de Construccion y Servicios SA, Texas-based Fluor Corp. and Aecon Group Inc. Representatives for ACS, Fluor and Aecon didn’t respond to a request for comment on the bond sale. RBC and HSBC declined to comment.
The bridge, expected to be completed in 2025, will consist of six lanes over 2.5-kilometers (1.6-miles) across the Detroit River, the busiest land-border crossing between Canada and the U.S., where about 7,000 trucks cross each day, according to WDBA. It will be among the top five longest bridges in North America, according to WDBA’s website.
The bridge was named in 2015 after hockey legend Gordie Howe, who was born is Saskatchewan and played 25 years for the Detroit Red Wings.
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