BAA Gets Bondholders' Approval To Restructure Debt

by Robert Lee, Tax-News.com, London

06 August 2008

BAA, the operator of several major UK airports, announced on 6th August that it has secured "overwhelming" support for its plans to migrate all series of existing bonds into a new financial structure.

In meetings held on 5th August, holders of the nine series of bonds voted to accept BAA's proposal to migrate bonds into the new ring-fenced structure, backed by Heathrow, Gatwick and Stansted Airports and Heathrow Express.

Initially, objections to the refinancing proposal by a hedge fund client of Swiss investment bank UBS had threatened to throw the deal off of the rails, but the issue came to a head during Tuesday's bondholder meeting and BAA secured the support it needed to go ahead with its proposal.

According to BAA, this outcome "represents a significant step in the re-financing process."

BAA expects to make a further announcement soon, confirming that the conditions relating to the effectiveness of the proposals have been satisfied or waived.

A number of other workstreams (including finalising the arrangement of banking facilities for the non-designated airport group) are still required for the re-financing to reach a successful close, the company said. BAA will work towards completion during August.

BAA, which was bought by Spanish firm Ferrovial for more than GBP10bn two years ago, owns and operates seven airports in the UK, including London's Gatwick, Heathrow and Stansted. It also has a 65% stake in Naples Airport and retail management contracts at three US airports.

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