ICBC contributes $105.45 million CAD to a $1.16 billion CAD syndicated loan for the Ontario Line - Southern Civil, Stations and Tunnel Public-Private Partnership (PPP) Project

Project narrative

On November 10, 2022, financial close was reached on a deal in which a syndicate of 11 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $1.160 billion CAD ($858.57 million USD) syndicated revolver loan agreement with Ontario Transit Group Inc. (OTG) — an Ontario, Canada-incorporated special purpose vehicle (SPV) jointly owned by Ferrovial Construction Canada Inc., a Canada-incorporated wholly-owned subsidiary of Spanish multinational infrastructure company Ferrovial, S.A. (later renamed Ferrovial, S.E.) (50% equity stake) and Vinci Construction Grands Projets S.A.S. (VCGP), a France-incorporated subsidiary of French concessions and construction company VINCI S.A. (50% equity stake) — for the Ontario Line - Southern Civil, Stations and Tunnel Public-Private Partnership (PPP) Project. This loan carried a maturity period of seven years and four months (approximately 7.333 years). Each lender, including ICBC, contributed $105.45 million CAD ($78.05 million USD) to the loan syndicate. In addition to ICBC, the following lenders contributed to the loan syndicate: CaixaBank S.A., Crédit Industriel et Commercial (CIBC), Desjardins Securities Inc., DZ Bank AG, Korea Development Bank (KDB), MUFG Bank, Ltd., Natixis, the Bank of Nova Scotia (Scotiabank), Sumitomo Mitsui Banking Corporation (SMBC), and Toronto-Dominion Bank. The proceeds were to be used by the borrower to finance $6 billion CAD fixed-price design-build-finance (DBF) contract ($5.5 billion CAD in capital costs and $500 million CAD in financing and transactions costs) for the Ontario Line - Southern Civil, Stations and Tunnel PPP Project, the southern portion of the larger Ontario Line Project, which sought to construct a 15.6-kilometer stand-alone rapid transit line connecting the Ontario Science Centre to Exhibition/Ontario Place with 15 stations and six interchange stations via three contracts (Ontario Line Southern, Ontario Line Northern Civil, Stations and Tunnel, and Ontario Line Rolling Stock, Systems, Operations and Maintenance (RSSOM)) in Toronto, Ontario. The scope of the South PPP DBF contract was the following: construction of a 6-kilometer tunnel and associated works from Exhibition to Don Yard Portal; groundworks to construct the tunnels and stations; utility and conduit works to prepare for the RSSOM mechanical and electric systems; guideway structures and facilities to prepare for the track structure that would be installed in the RSSOM Project; the construction and integration of one above-ground station with the existing GO Transit Exhibition Station; the construction and integration of two underground stations with the existing TTC Osgoode and Queen subway stations; and the construction of four new underground stations (King/Bathurst, Queen/Spadina, Moss Park, Corktown). The Ontario Line Project was expected to improve access to rapid transit to over 227,500 people who live within a 10-minute walk of a planned station, to reduce crowding on the existing Line 1 (Yonge-University) subway, to reduce traffic congestion, fuel consumption, and greenhouse gas emission, and improve economic and community growth via improved access and thousands of jobs during construction (with the South PPP Project expected to support an estimated 1,500 at peak construction). In September 2022, Infrastructure Ontario (IO) and Metrolinx selected the concessionaire OTG for the South package, with the contract awarded November 8, 2022. OTG consisted of Ferrovial Construction Canada and Vinci Construction Grands Projets as equity providers, Agentis as a financial adviser, AECOM Canada Ltd., COWI North America Ltd., GHD Limited, SENER Group as designers, and Ferrovial Construction Canada and Janin Atlas Inc. as construction contractors. Bechtel served as a consultant. Aercoustics was contracted to manage the noise and vibration impacts during construction. SYSTRA Canada was contracted for systems engineering, requirements management, interface management, configuration management, verification and validation management, reliability, availability, maintainability, and safety (RAMS) management, physical security and cybersecurity management, earthing and bonding, stray currents and corrosion protection, and electromagnetic energy / electromagnetic interference services. Design and construction mobilization began after the contract finalization in November 2022. Major works were expected to begin in early 2023, with contract completion in 2030. Construction commenced in June 2023.