The Infrastructure sub-portfolio consists mostly of corporate loans and securities, project financing and acquisition funding. The financed properties include ports, airports, toll roads, tunnels, multi-storey car parks, schools and hospitals, for example. Projects in the energy supply, transport, water supply and waste disposal, and telecommunications sectors also feature.
At the end of 2015, there were still 361 individual exposures in the portfolio, meaning that since the portfolio was taken over, the nominal value of the Infrastructure portfolio had been reduced by 23%, from EUR 18.0 billion originally to EUR 13.8 billion. Compared with the prior year-end, the exposures had been reduced by 7.9% and the nominal value by 1.4%.
Here is one example of a successful restructuring or wind-up:
- In the eastern USA, FMS-WM was involved in financing an almost 15-kilometre toll road intended to improve the connections from a regional airport to the transport network. The project became a severe problem case as soon as the receivable was transferred to FMS-WM, as commercial and residential areas originally planned in the region fell victim to the financial crisis. The current volume of traffic and therefore the toll revenues were around 30% less than forecast in 2009 and over 50% below forecasts in 2013. In this period, some syndicate members sold receivables at discounts of around 70% to the nominal value. In 2014, the threat of insolvency could only be averted through a painful restructuring and large write-downs by all parties. In the process, the equity provider, an Australian builder and operator, lost its investment completely. Not until the successful restructuring did open the door for the receivable to be sold. For this, FMS-WM initially joined forces with another owner, enabling it to offer a potential buyer a majority interest in the project. The long-term growth prospects were attractive to buyers, as the concession for the toll road has more than 90 years to run. The price achieved was roughly double the prices on the secondary market at which other syndicate members had sold their shares two years before.