The Infrastructure sub-portfolio includes a range of corporate loans and securities, project financing and acquisition funding for ports, airports, toll roads, tunnels, multi-storey car parks, schools and hospitals as well as for projects in the energy supply, water supply and waste disposal, and telecommunications sectors. These are usually government-regulated markets. At the end of 2016, the portfolio still contained 338 individual exposures (prior-year end: 361 exposures) to 170 counterparties. Since the portfolio was taken over, the nominal value of the Infrastructure portfolio has been reduced by 36.7%, from EUR 18.0 billion to EUR 11.4 billion. Syndicated loans make up 36% and securities 64% of the portfolio. It has some extremely long maturities; around 52% of the exposures will mature after 2040. The portfolio also has a strong regional focus, with around 57% of the nominal value in the United Kingdom.
Examples of successful unwindings and restructurings in the Infrastructure segment in 2016:
- In a series of individual transactions, financing arrangements for operators of toll roads in France amounting to around EUR 320 million and with remaining maturities of up to six years were sold to various investors at a profit and the related swap transactions closed out at the same time.
- Mid-2016 saw the sale of a share in a financing arrangement for an exclusive 99-year licence to operate multi-storey car parks in a US city. The transaction was preceded by a thorough restructuring. The strategy that aims to maximise value even required an investment in the operator company in the course of the restructuring. This paid off, as car park operations stabilised and revenues began to rise again once the restructuring had been completed successfully. This allowed the exposure to be exited by selling on much improved terms.
- The prior restructuring of the exposure also paid off in the case of the financing arrangement for a toll road in a US east coast state. The term of the receivable of around USD 240 million ran until 2038. Back in 2014, in the course of the operator company’s recapitalisation, FMS-WM had reduced its share by around 75% and at the same time improved the margin significantly.These improvements enabled the remaining receivable to be sold in 2016 and ultimately resulted in the risky and particularly labour-intensive exposure being repaid in full.