Mundys, bonds of up to 1 billion to support growth plans

Mundys is returning to the capital market and is planning an operation of up to one billion. With a precise objective: to raise sufficient resources to manage maturing debt with greater flexibility and to support the important growth plan of the group and its subsidiary Abertis. All this while the company headed by the Benetton family closes the sale of the Brazilian activities of AbConcessoes, which in the coming months should bring in another 200 million in cash, according to rumours, functional to the development project.

Shortly before Christmas, the group led by Andrea Mangoni laid the foundations for a return to the bond market. In detail, the board of directors obtained a proxy to issue bonds of up to EUR 1 billion, to be used in the first half of 2024, which will serve two objectives: rescheduling the current debt, amounting to EUR 3.6 billion, and covering the share of the EUR 1.3 billion capital increase that the subsidiary Abertis will launch in March.

According to sources, Mundys would not be willing to use the proxy for the full amount. Indiscretions refer to a transaction that could involve an amount of around 750 million, but there is no confirmation on this point. What seems likely, rather, is the type of bond that is being considered. The issues, we learn, will for the first time have the format of 'sustainability linked bonds', the cost of which will be correlated to the achievement of certain ESG objectives by the companies of the entire group. In practice, if the targets are not met, the cost Mundys will pay for the bond will increase.

As for the use of these resources that the group is preparing to raise on the market, there would be two priorities. Firstly, greater flexibility on debt. In this regard, today Mundys' debt amounts to EUR 3.6 billion, but important maturities are on the agenda in the near future. In particular, a 750 million bond matures in February. Then there is a 913 million bank loan due in April 2026, and between July 2027 and February the following year there are two more bonds due for a total of 2 billion. This is a series of commitments that the group must meet as it currently has about 2 billion in cash and bank lines. Not only that. According to IlSole 24 Ore, at the end of November the company also finalised the sale of its entire stake (50%+1) in AB Concessoes Brazil with an expected proceeds in the first half of 2024 that should be around EUR 200 million.

In this context, there is also the Abertis dossier. In the last months of 2023, the infrastructure group closed a USD 2.85 billion deal. It was awarded the modernisation, operation and maintenance of four new toll motorways in Puerto Rico for the next 40 years: it is one of the largest motorway privatisations on the island. Altogether, the new assets add 192 kilometres of highly strategic roads to the group's portfolio. The maxi-acquisition will be financed not only by new debt and bank lines, but also by a EUR 1.3 billion recapitalisation to be underwritten by the Spanish company's two 50% shareholders, Mundys and Acs. Mundys's share, therefore, amounts to EUR 650 million, which, according to rumours, has already been covered with the lines in the till. But it is clear that more cash and debt management is necessary to achieve the growth targets the group has set for itself in the medium and long term. After the acquisitions through Abertis of the motorway networks in Puerto Rico and Texas (with a TEV of around EUR 6 billion), and Autovia del Camino in Spain, Mundys intends to pursue its strategy by looking at motorway infrastructure and medium-to-large airports, with a focus in particular on Western Europe, North America and Latin America.