Canadian Pension Funds Acquire the Chicago Skyway Toll Road Concession

February 25, 2016

S&C clients Borealis Infrastructure Management (the infrastructure division of OMERS, the Ontario Municipal Employees Retirement System), Canada Pension Plan Investment Board and Ontario Teachers' Pension Plan Board completed their previously announced acquisition of Skyway Concession Company LLC (SCC) from affiliates of Cintra and Macquarie.

SCC manages, operates and maintains the Chicago Skyway toll road, a 7.8-mile toll road that forms a critical link between downtown Chicago and its southeastern suburbs, under a 99-year concession agreement with the City of Chicago that runs until 2104.

The Skyway was originally leased to Cintra and Macquarie in 2005 in the first privatization of an existing toll road in the United States. The sale to Cintra and Macquarie was the start of a wave of public-private partnership transactions completed in the United States shortly before the 2008 financial crisis, and the Skyway is among the few assets that has been able to service its senior debt.

The financing package used by the consortium to acquire the concession is complex and multi-source, comprising a mix of commercial bank, insurance capital, bond and equity financing. Allianz Global Investors acted as lead investor in the $975 million private placement, demonstrating a recent trend of insurance companies seeking investments in the infrastructure sector.

The S&C team was led by Christopher Mann and Neal McKnight, along with Benjamin Kent, Joyce Kwok, Lindsey Counts, Kathy Wang and Michael Williams.