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Allianz Global Investors’ Infrastructure Debt platform deployed EUR 4 billion in new investments in 2019. The team made new investments in 21 projects and corporates across core and core+ infrastructure in Europe, the United States and Latin America.
This takes the Infrastructure Debt strategies’ total commitments to over EUR 17 billion. Inframation (an Acuris company) recently recognised Allianz Global Investors again as #1 Bond Holder globally by value and deal count in 20191.
Allianz Global Investors has three Infrastructure Debt strategies, all of which focus on the financing of essential physical assets with limited exposure to market risk and high barriers to entry. We seek to secure higher returns than are achievable on equivalently rated corporate bonds and have developed a close relationship as creditor with the companies’ sponsors.
Within the Infrastructure Debt Core strategy in developed markets, Allianz Global Investors deployed capital across a variety of infrastructure sub-sectors in 2019, including:
Rolling stock: for the first time since 2016, Allianz Global Investors made investments in new rolling stock, specifically in 4 sets of assets across Germany, France and the UK. In particular, Allianz Global Investors has financed the rolling stock that will run the high frequency express train service between Paris Charles de Gaulle airport and Paris city centre.
Ports: a core port on the EU Trans-European Transport Network.
Buildings: financing the construction of a logistics warehouse in France via a greenfield availability-based public-private partnerships.
Electricity distribution: a Nordic company that operates both a regulated electricity distribution system and district heating network.
Rail: refinancing of the debt that was used to construct a high speed rail line in the south-west of France.
Midstream Gas: liquefied natural gas liquefaction and export terminal with associated pipeline in the United States.
Ferries: Allianz Global Investors increased our investment in a Northern European company that operates short sea ferry routes, in which we had initially invested in 2017.
Utilities: optimisation of the capital structure of a Southern European water concession business.
Within the Resilient Credit strategy, which focusses on core+ infrastructure, investments were made in European energy and transport companies, including:
Energy generation: a German company which provides energy services for industrial, residential and commercial customers in the form of decentralised energy production plants.
Motorway infrastructure: one of the UK’s leading operators of motorway service areas.
Wellboats: one of the world’s leading owners and operators of specialised wellboats, which are critical infrastructure required in the salmon farming industry for the transport of live fish.
Metering: one of the main companies in France that installs, monitors and maintains heat and water sub-meters for multi-residential and multi-use buildings.
Gas distribution: two investments were made in gas distributors in Southern Europe, one of which supported the acquisition of a distributor of piped liquefied petroleum gas and the other involved the capital restructuring of a regulated natural gas distributor.
Allianz Global Investors additionally makes direct infrastructure investments in investment-grade countries in Latin America via our Core Infrastructure Debt strategy in emerging markets. Run out of our New York office, we closed three landmark transactions in this strategy in 2019:
Three electric transmission line projects in Chile, with over 530km length, and their corresponding substations and ancillary equipment.
Brownfield wind farm in Uruguay that has been operational since April 2017, with a power purchase agreement.
Los Ramones Norte, a critical 450km natural gas pipeline for the supply of central Mexico.
Allianz Global Investors has created a digital interactive map detailing all the infrastructure debt transactions it has closed around the world on behalf of its investors. To view the interactive map, please click here.
Environmental, Social and Governance (“ESG”)
The Infrastructure Debt investment team integrates ESG risk analysis fully into our investment appraisal. We have adopted a holistic assessment approach that considers the ESG risk profile of a potential issuer based on enterprise-specific risk and jurisdiction risk. In principle, we consider that a company that has better control over its ESG risks has a lower credit risk.
Our ESG risk analysis continues post-investment into asset management. As a private credit investor we have direct access to the management of our issuers. We do not distinguish between ESG and non-ESG engagement. Many practical real-world factors that impact a credit investment will be multi-faceted and have contractual, financial and ESG elements to them.
1 Source: Inframation Deals, An Acuris company: Global League Tables, 2020.
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