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STRICTLY CONFIDENTIAL
CAPA Conference: MumbaiPeter Farthing, Macquarie Bank Limited
1 February 2018
Innovative Approaches to Investing in and Funding Infrastructure
Contents
STRICTLY CONFIDENTIAL
01 Macquarie’s Presence in Infrastructure and Aviation 2
02 Investing in Infrastructure Assets 9
03
Alternative Funding and Investing Strategies:
• Slots Financings
• Future Flow Securitisations
• Ground Support Equipment
15
STRICTLY CONFIDENTIAL
1Macquarie’s Presence in Aerospace and
Aviation
PAGE 3STRICTLY CONFIDENTIAL MACQUARIE
Macquarie Aviation/Aerospace highlights
Specialised airport and aviation financing, asset management, equipment trading/remarketing, & asset services
AIRPORT
INVESTMENT
+20 investments
in 14 years
Long term direct
investor manager
Value enhancing
operational focus
Airport and
terminal manager
Servicing ~ 144m
passengers per
annum
AIRPORT
SERVICES
Arlanda &
Stansted rail
Own / operate
Stansted Express
Own / operate
Arlanda Express
Baggage trolley
franchise
GSE RENTAL
PROGRAMMES
Specialised GSE
rental solutions
Tailored rental
arrangements
Broad coverage of
airside equipment
3-10 year rental
facilities
Maintenance &
Telematics options
CHECK-IN &
TICKETING
Key airport
ITC rental
Ticketing kiosk
rentals
Information
display rentals
Managed
technology services
POS technology
and retail fit-out
AIRCRAFT
LEASING
USD7bn aircraft
portfolio
+270 commercial
aircraft
+90 airline clients
worldwide
Experienced
management
Most modern
aircraft types
PAGE 4STRICTLY CONFIDENTIAL MACQUARIE
GroupsMacquarie India platform1
MacCap is a leading financial advisor in infrastructure and real estate transactions
ranking #3 by Bloomberg for announced M&A in CY2015 and #1 infrastructure advisor
in India. MacCap is also a leader in Private Capital Markets (PCM) transactions in India,
having advised on more than $US5b transactions in real estate and infrastructure
Macquarie Capital
MIRA managed funds are among the largest foreign infrastructure investors in India with $US1.3b
invested across 25 projects. MIRA managed funds are also collectively the largest investor in
Indian toll roads with with over 4,000 lane kilometres equity invested of ~$US465m2 across 15
assets
Macquarie Asset Management
Macquarie is a leading broking and research house in India and is with a market share of more
than 6%. Current research coverage of 101 stocks (over ranked top 8 equites broker in India
70% of overall market cap and over 85% of NIFTY Index). The Commodities and Financial
Markets division provides structured trade finance solutions across financing, physical supplies/
off-take, logistics and hedging
Commodities and Global Markets
1. Headcount as at 31 March 2017. 2 Includes investments exited in March 2017
795
staff
in
Gurgaon
103
staff in
Mumbai
Provides finance, technology, risk management and MAM operations services across all
Macquarie business groups, divisions and geographies. Operates as an extension of global
functional teams servicing respective functions globally with the FMG footprint being the highest
(40% of global FMG headcount)
Global Finance Services (GFS)
Macquarie is the biggest Infrastructure Investor in the World with US36.5b capital raised (Infrastructure
Investor 2017)
Macquarie has a long standing commitment to the Indian market, being based here since 2006 and with 900 staff across Delhi and Mumbai
Macquarie’s India Platform
PAGE 5STRICTLY CONFIDENTIAL MACQUARIE
A
B
A
B
C
D EF
G
H
K
J
A B
C
DE
G
A
F
ML
H
Delhi
Mumbai
Chennai
N
O
Airports Energy Roads Telecom
towers
MIRA IndiaUS$ 1.6b deployed in 44 assets across two funds
MB Power (Madhya Pradesh) Limited
1,200 MW coal based power plant in
Anuppur
Adhunik Power and Natural Resources
Limited
540 MW coal based power plant in
Jamshedpur
Ambuthirtha (Soham Renewable Energy)
22MW operational hydropower plant
Mannapitlu (Soham Renewable Energy)
15MW operational hydropower plant
Mahadevpura (Soham Renewable
Energy)
6MW hydropower plant
Mullibettu (Soham Renewable Energy)
10.5MW hydropower plant
Nekkilady (Soham Renewable Energy)
12.5MW hydropower plant, under
construction
Ind Barath Energy Utkal Limited
700 MW coal based thermal power plant
Stridor Portfolio Assets (Punjab)
31 MW across 2 solar assets
Stridor Portfolio Assets (Gujrat)
253 MW across 12 solar assets
Stridor Portfolio Assets (Madhya
Pradesh)
27 MW across 1 solar asset
Stridor Portfolio Assets (Tamil Nadu)
5 MW across 1 solar asset
Stridor Portfolio Assets (Orissa)
5.5 MW across 1 solar asset
Stridor Portfolio Assets (West Bengal)
5 MW across 1 solar asset
G
A
B
C
D
F
E
ATC Telecom Gurgaon (Head office)
India’s 2nd largest tower company by
tenancies
A
H
I
J
K
L
M
N
Indira Gandhi International
Airport (Delhi)
India’s largest airport by PAX
Rajiv Gandhi International Airport
(Hyderabad)
India’s sixth largest airport by PAX
A
B
Jaora – Nayagaon Road
128km long toll road, currently tolling
Kharar – Ludhiana Road
78km long HAM road, currently under
development
Belgaum – Dharwad Road
79km long toll road, currently tolling
Bhandara Road
80km long toll road, currently tolling
Durg Road
83km long toll road, currently tolling
Sambalpur – Baragarh Road
88km long toll road, currently tolling
A
B
C
D
E
Dhankuni – Kharagpur Road
111km toll road, currently tolling
Chennai Outer Ring Road
30km long annuity road, under construction
Ranastalam – Anandapuram
47km long HAM road, under construction
Jadcherla Expressways Private Limited
58km long toll road, currently tolling
Trichy Tollways Private Limited
94km long toll Road, currently tolling
Ahmedabad Mehsana Road
52km long toll road currently tolling
Vadodara Halol Road
32km long toll road currently tolling
Tada Nellore Road
111km long toll road currently tolling
Nandigama Viajayawada Road
49km long toll road currently tolling
H
I
K
J
L
M
N
O
I
J K
L
M
N
G
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I
Divested in March 2017.
PAGE 6STRICTLY CONFIDENTIAL MACQUARIE
GMR Airports Limited has key ownership stakes in:
• 64% stake in Delhi Airport Ltd
• 63% stake in GMR Hyderabad Airport.
Case Study: Delhi/Hyderabad Airports
Macquarie Asia Infrastructure Fund invested US$200m into GMR Airports Limited
Investment details
• Convertible preference share investment
• Convertible to equity 4 years from investment.
Rationale:
• vital operating airports critical to India's aviation
sector
• regulated assets
• Good asset quality
Key Concerns:
Regulatory regime at the time of investment –the regulator had just been formed and DIAL was hybrid till, GHIAL was single till. Since then, GHIAL is now hybrid till.
Real estate monetization - pricing and schedule of Delhi Airport land
Restriction on land usage at Delhi Airport –being restricted to only Airport related activities Thus a large number of hotels constructed at Delhi Airport
PAGE 7STRICTLY CONFIDENTIAL MACQUARIE
Resources
Tata Power Co. Ltd.
Acquisition of 10% stake in
Geodynamics Ltd.
A$ 44.1 million
2008
Tata Power Co. Ltd.
Acquisition of 30% Stake in
Bumi Resources
US$ 1,100 million
2007
Sale of Griffin Coal to Lanco
Infratech
Undisclosed
2010
Griffin Coal
Financial Advisor to the Administrator
Divestment of 25% stake in
Block-9 (Yemen )
US$ 90 million
Financial Advisor
Reliance Industries Ltd.
2012
Transactions for MacCap India
Real Estate
Residential Partnership with European pension funds
2012
US$ 190 million
Godrej Properties
Sole Financial Advisor
QIP
US$ 350 million
Housing Development &
Infrastructure Limited
Joint Bookrunner
2009
FIG
US$ 255 million
Exclusive Financial Advisor to Axis Bank
2012
Acquisition of the investment
banking, securities and related
businesses of Enam
Axis Bank
PTC India Financial ServicesPrincipal Investment
US$ 20 million
2007
advisor on fair valuation
Undisclosed
2011
Undisclosed
Financial Advisor
Tokio Marine
2009
Advised on its life insurance JV
with:
FCCB Restructuring
US$ 360 million
Sole Financial Advisor
Suzlon Energy Ltd
2012
Convertible Bond
US$ 175 million
Sole Global Coordinator,Joint
Bookrunner and
Lead Manager
Suzlon Energy Ltd
2011
Suzlon Energy Ltd.
FCCB Restructuring /
Covenant Modification
US$ 500 million
Joint Dealer Manager, Joint Consent Solicitation Agent
2009
Industrials
Fortis Healthcare Ltd.
Advised on acquisition of HK
based Quality Healthcare
A$ 202 million
Financial Advisor
2010
Fortis Healthcare Ltd.
Takeover defence for Parkway
Holdings
US$ 810 million
Financial Advisor
2010
Acquisition of Whyte & Mackay
from United Spirits
£ 430 million
Financial Advisor
Emperador Inc.
2014
Infrastructure
US$ 107 million
Exclusive Financial Advisor
2014
Advisor to Lanco on sale of
hydro power plants to Greenko
Lanco Infrastructure
US$ 182 million
Book Running Lead Manager
2013
Institutional placement of fresh
equity shares
Adani Port
US$ 150 million
Financial Advisor
2013
Advisor to Greenko on Capital
Raise
Greenko PLC
US$ 0.5 billion
Financial Advisor
2013
Sell down 70% stake in Island
Power, Singapore
GMR Energy Ltd.
US$ 700 million
Financial Advisor
2016
Acquisition of Korba West
Power Plant from Avantha
Power
Adani Power Limited
US$ 1.0 billion
Financial Advisor
2015
Acquisition of Udupi Power
Plant from Lanco Infratech
Adani Power Limited
US$ 80 million
Lead Bookrunner
2015
QIP
Ashoka Buildcon Limited
US$ 337 million
Financial Advisor
2014
Advisor to CPPIB on their
US$337mn investment in
L&T IDPL
L&T IDPL
Indian Infrastructure focused
mezzanine investment
platform
US$ 1.0 billion
Sole Financial Advisor
PEL and APG
2014
US$ 125 million
Financial Advisor
2014
EIG invested US$ 125 million
in Greenko
Greenko PLC
Real Estate focused high yield
Indian rupee debt platform
US$ 500 million
Sole Financial Advisor
PEL and CPPIB
2014
Structured funding for residential
projects
US$ 100 million
Sole Financial Advisor
Runwal Group
2015
US$ 60 million
Book Running Lead Manager
2015
Initial Public Offering
Prabhat Dairy Limited
US$ 81 million
Book Running Lead Manager
2015
Initial Public Offering
Sadbhav Infrastructure
Projects Limited
Development partner for India Entertainment City
2014
Confidential
ADIH - IEC
Sole Financial Advisor
Issue of 70% equity via new
shares to Mahindra and
Mahindra
KRW 525 billion
Joint M&A sell-side advisor
2011
Ssangyong Motors
TMET
Bookrunner and lead Manager
Reliance Communications
Qualified Institutional Placement
2014
US$ 800 million
US$ 72 million
Exclusive Financial Advisor
Providence Equity Partners
2012
Acquisition of 17.3% economic
interest in
Exclusive Financial Advisor
Aditya Birla Minacs
Exclusive financial advisor to
PE consortium on acquisition of
Minacs
2014
US$ 260 million
US$ 500 million
Financial Advisor
2013
Acquisition of
Barings Asia
Strategic partnership for equity
investments in residential
development in India
Sole Financial Advisor to
Piramal Fund Management
2017
PEL and Ivanhoé
~US$ 350 million
Advised MIRA on sale of two
operating road assets to
Abertis
US$ 135 million
2017
Financial Advisor
Sale of leased office portfolio
Exclusive Sell-side Advisor
2017
Hiranandani
~US$ 1 billion
Affordable Housing Platform
US$ 200 million
Exclusive Financial Advisor
Shapoorji Pallonji Group
2015
Across a number of verticals over the past 10 years
PAGE 8STRICTLY CONFIDENTIAL MACQUARIE
International Capital Markets Expertise Virgin Atlantic: First European Slots Deal
Transaction Overview
• £252m senior secured note
• Secured over take-off and landing Slots at Heathrow
• Bond instruments privately rated by Moodys’ –
investment grade
• A1 and A2 senior tranches offering different returns and
amortisation profile to accommodate investor demand
• 15 year maturity (AWL 10 years (A1 tranche) and 12
years (A2 tranche))
• Notes placed with blue-chip long term institutional
investors at attractive rates including:
• Pension Funds
• Insurance Groups – Life and General; and
• Specialist Debt Funds
• Macquarie’s role:
• devised structure and advised Virgin Atlantic Airways;
and
• acted as sole arranger and distributor of the bonds
Virgin Atlantic on the transaction
“As a business we challenge ourselves to think differently. We are
always looking for new opportunities to strengthen our position so
that we can invest more for our customers
This is an innovative financing arrangement. It represents not only a
significant milestone for Virgin Atlantic as our maiden capital
markets transaction, but is also the first time an airline has
successfully accessed the value of its London Heathrow slot
portfolio in this way.”
Macquarie successfully helped Virgin Atlantic to unlock the value of their Slots – a European first
Virgin Atlantic’s CFO
“This was a ground-breaking deal which was both innovative and
challenging. Full credit to the Macquarie team for seeing this through
from inception to closing, we are delighted with the terms of this
offering”
STRICTLY CONFIDENTIAL
2Investing in Infrastructure Assets
PAGE 10STRICTLY CONFIDENTIAL MACQUARIE
Infrastructure Assets and their Characteristics
Distinguishable Features – lower volatility and inflation linkage
• Essential nature or quality of services
• Strategic and monopolistic position of underlying assets
• Limited substitutability risk
• Inflation protection – natural link to inflation
• Long dated cashflows to match investor’s long-dated liabilities
• Lower correlation with equity and traditional assets classes can provide diversification benefits to fund managers – defensive assets
Three key ‘defensive’ indicators:
• Volatility
• Beta
• Correlation to equity markets
Measured with the aid of the infrastructure indices across these indicators (FTSE Global Core, Brookfield Global, UBS Global, MSCI World, S&P Global) compared to MSCI AC World Index
Investors are looking for specific qualities when investing in infrastructure
PAGE 11STRICTLY CONFIDENTIAL MACQUARIE
Investing in Infrastructure and ‘Core Plus’
Not all infrastructure assets are treated the same by investors
Less Risk / Less Return
Core / Core Plus
▪ Bridges, tunnels, Toll roads
▪ Pipelines, energy transmission and distribution
▪ Water and waste water systems
▪ Landing slots
▪ Future Flow
More Risk / More Return
Value Added
▪ Airports / Sea ports
▪ Rail Links
▪ Contracted Power Generation
▪ Rapid Rail Transport
Opportunistic
▪ Development Projects
▪ Satellite networks
▪ Merchant power generation
▪ Non-OECD country infrastructure
Key Benefits of infrastructure investing:
• Diversification benefits: low correlation with other major
asset classes.
• Inelastic demand: Investment provides essential services
with limited completion
• Governments and regulators allow fair returns: in order to
make investments attractive.
• Protection against inflation: rates charged for asset usage
are usually linked to inflation.
Key risks of infrastructure investing:
• Political and regulatory risk: regulatory environments can
vary significantly from one jurisdiction to another.
• Liquidity: Infrastructure investments are generally less
liquid than other assets
• Currency Volatility: adds FX volatility to returns however
expected to revert to mean in the long run.
PAGE 12STRICTLY CONFIDENTIAL MACQUARIE
Increased Interest in Infrastructure and Aviation assets
Pension funds have significantly increased their target allocation to infrastructure
Global Pension Allocation Movements
• High demand for infrastructure and core-plus
infrastructure assets
• Increase demand has led to equity yield compression
and infrastructure equity investors are venturing into
debt and adjacent asset classes
• Growth in the pension fund system has led to a
significant increase in un-deployed capital and
increased allocations to infrastructure-related assets
Cyclical Airline Profitability
Increased Attractiveness of Aviation Sector
• Historically airline sector performance has been
viewed as too cyclical by long term investors
• Improved performance of Aviation sector in recent
years has attracted new investors and renewed
interest in the sector.
• Current environment still favourable for the aviation
industry through 2017.
Source: Bloomberg, IATA Economics using data from ICAO.
57% 51% 45% 46%
35%36%
33% 27%
4% 12%20% 24%
4% 1% 2% 3%
1997 2003 2009 2016eCash Property/Infra and other real assets Bonds Equity
Global Pension Allocation by Asset Class (%)
PAGE 13STRICTLY CONFIDENTIAL MACQUARIE
-
100
200
300
400
500
600
Dec-0
3
Dec-0
5
Dec-0
7
Dec-0
9
Dec-1
1
Dec-1
3
Dec-1
5
Fe
b-1
7
Global ‘dry powder’ equityacross alternative asset classes
Growth in the pension fund system has led to a significant increase in equity capital over the last 15 years
Private equity ($USbn) Real estate ($USbn)Infrastructure ($USbn)
-
50
100
150
200
250
300
Dec-0
3
Dec-0
5
Dec-0
7
Dec-0
9
Dec-1
1
Dec-1
3
Dec-1
5
Fe
b-1
7
Rest of World Asia Europe North America
161 billion as at Jan-18 532 billion as at Feb-17248 billion as at Feb-17
Source: Prequin, H2 2017
0
20
40
60
80
100
120
140
160
180
Dec-0
3
Dec-0
5
Dec-0
7
Dec-0
9
Dec-1
1
Dec-1
3
Dec-1
5
Dec-1
7
PAGE 14STRICTLY CONFIDENTIAL MACQUARIE
Demand is set to continue in the future
Source: Prequin, H2 2017, Prequin Investor Interviews, Dec 15 – June 17. Prequin Real Estate Online
Investment demand for 2017 and beyond
Expectations have been generally met or exceeded, meaning further demand in the future
Investor views of infrastructure performance
relative to expectations, 2015 - 2017
• Median IRRs have historically been around 10% since 2004
• 96% Investors deem performance to have met or exceeded expectationsStrategies targeted by Real Estate Investors
STRICTLY CONFIDENTIAL
3Alternative Funding and Investing Strategies
PAGE 16STRICTLY CONFIDENTIAL MACQUARIE
Alternative Ways to Invest in Infrastructure
This has led to
• Increased demand for traditional infrastructure and ‘core plus’ infrastructure
• Investors moving into infrastructure debt and alternative asset strategies to gain analogous exposure to traditional
infrastructure assets such as airports
Three areas we are seeing new products and increasing demand from our infrastructure clients and investor
base:
Structured Capital Markets Products
• Landing Slot Rights as financing collateral to raise capital for airlines – private and public placements
• Future flow receivables securitisations used to fund future infrastructure projects – private and public
placements
Leasing Solutions
• Ground Support Equipment (“GSE”) leasing, servicing and pool solutions
Equity yields have compressed in infrastructure developed markets since 2012
PAGE 17STRICTLY CONFIDENTIAL MACQUARIE
Conventional Structural Enhancements can achieve a significant up-notch in the Bond Rating from the credit rating
Source: S&P, Bloomberg, Moodys.
Potential significant notch improvement from corporate rating
Structured Products: pricing benefits
S&P Rating Airport / Airline / Sovereign
Investment grade
AA
A+
A
A-
BBB+ easyJet PLC, Ryanair Holdings PLC
BBB Southwest Airlines Co.
BBB-Sovereign of India*, Deutsche Lufthansa AG, Qantas
Airways Ltd., Alaska Airlines Inc., WestJet Airlines Ltd.
Sub-investment grade
BB+ GMR Hyderabad Int Airport, Delta Air Lines Inc.
BB Delhi Int Airport Ltd, British Airways PLC
BB-
American Airlines Group Inc., JetBlue Airways Corp.,
United Airlines Inc., United Continental Holdings Inc.,
American Airlines Inc., Latam Airlines Group S.A., Spirit
Airlines Inc., Turk Hava Yollari A.O., US Airways Inc.
B+ Virgin Australia Holdings Ltd., Air Canada
B SAS AB, Avianca Holdings S.A.
B-
CCC Gol Linhas Aereas Inteligentes S.A.
This should translate to a material cost saving for the counterparty
Rating AA A BBB BB B CCC
Avg. Spread (bps) 146 180 257 443 661 1103
Delta from BB (bps) -297 -263 -186 - +218 +660
0
500
1000
1500
2000
2500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
S&P Global Composite Credit Spreads By Rating Category (bps)
AA A BBB BB B
*Moody’s have recently upgraded India’s government bond rating to Baa2 (BBB) however
S&P have confirmed BBB-
PAGE 18STRICTLY CONFIDENTIAL MACQUARIE
Slots Trading Proposal extended to India:
• Slots are traded in the secondary market between airlines at
Heathrow and a number of other airports that are categorised as
supply-constrained around the world.
• The proposal would extend this arrangement to permitting the
transferring of slots between airlines on a bilateral basis and outside
the conference time frames and with or without consideration.
• We are seeking to ascertain the Indian Government’s policy
position on this issue.
Slots Financing – capital raisings
Landing Slots (“Slots”) are a right of significant importance in the aerospace sector
Slots: An Overview
• Pairing of a scheduled time of arrival and
departure allocated by the applicable airport
coordinator to an on a specific date at a specific
airport.
• Legally characterised as licences or permits.
• Issued by a slot coordinator at a “Level 3” airport
on the basis that allocation is done on a neutral,
transparent and non-discriminatory way.
Target slots at Level 3 Airports
• 177 airports are presently Level 3 airports within
the IATA Worldwide Slot Guidelines (8th Ed).
• Slots at Level 3 airports are already transferred
between international airlines on a bi-annual
basis at the IATA Slots Conference.
• Indian airports which are Level 3 include: Delhi,
Mumbai, Chennai, Bangalore, Kolkata,
Hyderabad.
Airline A
Transfer Slot A
Airline B
Airport Slot
Coordinator
High level slot trade process
Transfer Slot B and Consideration
Slot
Exchange
Agreement
Issues ‘dummy’ slot B
PAGE 19STRICTLY CONFIDENTIAL MACQUARIE
Key Benefits to Airports / Aviation Sector
• More efficient allocation of Slots should translate to greater passenger numbers, higher passenger revenue and tax receipts and indirect benefits through trade and tourism in India
• Promotes operational efficiency at airports, the legislative intent behind many legislative enactments in the airport space1
• Promotes the aerospace sector to a new group of long term investors seeking long term capital investments through slots financings
Slots Financing - Benefits
The structure provides many benefits to the key stakeholders in the industry
1: Under many legislative frameworks including the EU Slot Regulations and the Sydney Airport Demand Management Act 1997 for instance the guiding
principle is to achieve operational efficiency at supply-constrained airports
Key Benefits to Airlines
• Creates a means for airlines to recover capex when relocating from one airport to another – increases flexibility
• The ability for airlines to lever slots will enhance the slot value beyond utilisation
• Creates a long term capital funding source for airlines on very favourable terms and pricing, making them more resilient to fluctuating macro cycles
• Strengthen the financial position of the airlines, diversifying their funding sources to new investors and to the investment grade global markets
PAGE 20STRICTLY CONFIDENTIAL MACQUARIE
Future Flow Capital Raisings: Benefits
No. Feature Details Potential Benefit/s
1Pricing
• Structural enhancements could produce
significant saving over the term when
compared with existing capital raisings
• Saving in cost of debt over the bond term
• Long term interest rates are at historically low levels
2 Tenor of bonds
• Potential tenor of 10+ years for this
asset given the predictability and stability
of the future flows.
• Longer amortisation profiles
• potentially match projects migrating to revenue generating
3 Favourable terms
• We expect our investor base will permit
the flexible use of funds for general
corporate purposes
• Financial covenants will be focused on
debt service and leverage ratios
• Flexible use of funds to utilise on existing projects and
minimise negative carry on borrowed funds
• DSCR tolerance range: 4-8x
• Leverage Ratio tolerance range: 2-4x
4Amortisation
Profile
• Investor base less focused on
amortisation in short term seeking longer
maturity debt
• Repayment profile could be structured to suit the
counterparty with limited restraints
5Currency
Optionality
• Capital can be raised in USD and INR (or
a combination)
• Capital may be raised to match currency longer-dated actual
and anticipated liabilities
• US inflationary pressure and anticipated interest rate hikes in
next 12 months are likely to generate upward pressure on
USD over short to medium term
• Financing presents good opportunity to raise USD
Using future receivables to fund growth is a well-established funding technique for growth
PAGE 21STRICTLY CONFIDENTIAL MACQUARIE
Emerging Markets: Future Flow Deals
Transaction Description Ratings Information (Moody’s)
Garanti Diversified Payment
Rights
• US$150m issued in 2003 by Garanti, a Turkish Bank, 5 year tenor
• Diversified payment receivables, generated through SWIFT
payments made into Turkey, payments receipted into a trust, P&I
paid and remainder swept to Turkey
• Covenant, DSCR of better than 6:1x
• Series A rated Aaa (Series B notes
Baa3)
• Garanti rated B3 (foreign currency)/Baa2
(local currency deposit)
• Turkey country rating of B3
KAL future ticket receivables
• JPY 40b issued in 2007 (and multiple times since) by Korean Air
(KAL)
• Securitised over future airline ticket receivables• Rated the notes A3
Eco Frontier Revenue Trust
• JPY 10b issued in 2011 by Ibaraki Prefecture Eco Frontier Revenue
Trust for 35 years
• Receivables generated by the Ibaraki Prefecture Environmental
Conservation Agency, generated through waste disposal
businesses in Japan
• SPV had a DSCR 2x at inception due to very reliable cash flows
• The waste disposal service is a mandatory service, covenants
include servicer replacement provisions (payment is independent of
servicer), cash reserves providing for 6 months of no income
• Notes rated A1
• Moody’s noted A2 or A3 would be more
applicable if the DSCR was between
1.5x and 1.8x
Brazilian Electric Power
Receivables Future Flow
• Various transactions issued by the Brazilian Government, long
dated
• Government charges companies royalty to generate and sell
electricity
• Can be longer dated than other funding sources
• Generally covenants at DSCR of 2.5x
• 2.0x-2.5x+ DSCR
• BrAAA (equal to the Brazilian sovereign
rating, as this is a domestic transaction)
PAGE 22STRICTLY CONFIDENTIAL MACQUARIE
GSE Fleet Procurement, Rental & Fleet Management
Macquarie finds the best solution that helps users focus on managing their core operations at competitive rates.
PRODUCT TYPES
We support a number of structures across the majority of GSE types
including:
• Multi asset, single or multi location rental and asset services.
• Dry Operating Rental
• GSE Pool Service incorporating additional costs and issues.
• Over a variety of tenors suited to the client.
WORKING ACROSS WHOLE GSE ECOSYSTEM:
REGULATOR
Economic and
social benefit
HANDLER
Market share and
Profitability
FLEET OWNER
Manageability
and ROI
KEY SERVICES
Profitability and
risk
SUPPLIERS
Sales volume and
profitability
AIRPORT
Capacity, cost
and efficiency
Ensuring key stakeholders are satisfied
PAGE 23STRICTLY CONFIDENTIAL MACQUARIE
This presentation is provided on a confidential basis to selected recipients only, and may not be reproduced in whole or in part or distributed or transmitted to
any other person, nor may any of its contents be disclosed to any other person, without Macquarie’s prior written consent. This presentation has been prepared
as a basis for further discussion. This is a sounding document only. Any offer or proposal in respect of the arrangements described in this presentation will be
subject to further subject to internal approvals and discretion and formal engagement. Furthermore, the arrangements described in this presentation, including,
without limitation, the proposed financing terms, are subject to Macquarie internal approvals and change and any subsequent offer or proposal in respect of
those arrangements, if made, may not be made on the basis of the arrangements or terms as described herein.
The name “Macquarie” in this document refers to Macquarie Group Limited ABN 94 122 169 279 and its affiliates.
This presentation is provided for general information purposes only, without taking into account any potential investors’ personal objectives, financial situation
or needs. It should not be relied upon by the recipient in considering the merits of any particular transaction. It does not constitute a prospectus or offering
memorandum and is not an offer to buy or sell, or a solicitation or recommendation to invest in or refrain from investing in, any securities or other investment
product or an invitation to be involved in or take any further part in the arrangements described in this presentation. Neither this presentation nor any other
documentation or information (or any part thereof) delivered or supplied in connection with this presentation shall be deemed to constitute an offer of or an
invitation to purchase or subscribe for any securities or any other investment product or to be involved in or take any further part in the arrangements described
in this presentation. Nothing in this presentation constitutes investment, legal, tax, accounting or other advice. The recipient should consider its own financial
situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this presentation, including obtaining
investment, legal, tax, accounting and such other advice as it considers necessary or appropriate. This presentation has been prepared on the basis of publicly
available information and information provided by the airline. Macquarie has relied upon and assumed, without independent verification, the accuracy and
completeness of all such information. It contains selected information and does not purport to be all-inclusive or to contain all of the information that may be
relevant to the arrangements described in this presentation. The recipient acknowledges that circumstances may change and that this presentation may
become outdated as a result. Macquarie is under no obligation to update or correct this presentation.
Macquarie, its related bodies corporate and other affiliates, and their respective directors, employees, consultants and agents (“Macquarie Group”) make no
representation or warranty as to the accuracy, completeness, timeliness or reliability of the contents of this presentation. To the maximum extent permitted by
law, no member of the Macquarie Group accepts any liability (including, without limitation, any liability arising from fault or negligence on the part of any of
them) for any loss whatsoever arising from the use of this presentation or its contents or otherwise arising in connection with it.
This presentation may contain forward-looking statements, forecasts, estimates and projections (“Forward Statements”). All statements other than statements
of historical facts included in this presentation, including, without limitation, those regarding the airline’s financial position, business strategy, plans and
objectives, are Forward Statements. Such Forward Statements involve known and unknown risks, uncertainties and other factors which may cause actual
future results and operations to vary materially from the Forward Statements. Such Forward Statements are based on numerous assumptions regarding the
airline’s present and future business strategies and the environment in which the airline will operate in the future. Further, certain Forward Statements are
based upon assumptions of future events which may not prove to be accurate.
Important Notice and Disclaimer