INPP Makes First Investment in the US
5 October 2015
INPP makes first investment in the US
International Public Partnerships Limited ('the Company' or 'INPP') is pleased to announce its first investment in the US. The Company has invested approximately US$48 million (£32 million) into a series of fully yielding mezzanine debt instruments with a remaining average life of 37 years.
The mezzanine debt is being acquired by the Company from the Federal Home Loan Mortgage Corporation ("Freddie Mac") and is underpinned by security over seven operational PPP military housing projects relating to a total of 19 operational military bases in the US comprising approximately 21,800 individual housing units.
The military housing is the longest standing sector in the US for public private partnership ("PPP" or in the US, "P3") projects. The introduction of private sector capital and resources in the provision of military housing was established by Congress in 1996 through the Military Housing Privatization Initiative ("MHPI") and schemes have, to date, attracted capital in excess of US$30 billion from domestic and international investors.
The opportunity meets INPP's investment criteria and the Company expects the instruments to offer INPP a particularly attractive rate of return as well as providing the Company with an entry into the US infrastructure market in one of its most established sectors.
The military housing projects have the following characteristics:
· a secure revenue stream via the US military's Basic Allowance for Housing paid to service personnel creating an indirectly government sourced revenue payment;
· high barriers to entry as the number of on-base housing units is limited;
· no residual value exposure;
· a geographically diverse portfolio of housing units across the continental US including some of the largest and most critical of US military installations.
The acquisition opportunity was identified as a consequence of the Hunt Companies Inc's shareholding in the Company's investment adviser, Amber Fund Management Limited ("AFML") and the relationship that exists between Hunt and the Company with respect to US opportunities. Hunt are one of the largest owners, managers and providers of ongoing services in the P3 Military Housing sector having interests in approximately 33,000 housing units including those the subject of this transaction where they also provide property management services in respect of most of the units. This Company has acquired these assets directly from Freddie Mac.
The investment has been funded through a combination of the Company's cash reserves and its corporate debt facility. Given the Company's corporate debt facility is largely committed the Board is continuing to consider fundraising options.
Commenting on the acquisition Chairman of INPP Rupert Dorey said: "We are pleased to have made our first investment in the US. Military Housing schemes have an established track record in the US and we believe that this opportunity not only provides an attractive return for our shareholders but potentially opens the door to further attractive opportunities in one of the world's largest infrastructure markets."
For further information:
Erica Sibree +44 (0)20 7939 0558
Amber Fund Management Limited
Nick Westlake/Hugh Jonathan +44 (0)20 7260 1345/1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0) 20 3727 1046/1039
FTI Consulting
Notes to Editors:
About International Public Partnerships:
International Public Partnerships Limited (INPP) is a listed infrastructure investment company which invests in global public infrastructure projects developed under the public private partnerships (PPP) and private finance initiative (PFI) procurement methods.
Listed in 2006, INPP is a long-term investor in 119 social and transport infrastructure projects, including schools, hospitals, courts, police headquarters, transport, renewable energy and waste water projects in the U.K., Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term government-backed yield and capital growth through investment across both construction and operational phases of typically 20-40 year concessions.
Visit the INPP website at www.internationalpublicpartnerships.com for more information.
About Amber Infrastructure Group:
Amber Infrastructure (Amber) is a leading international infrastructure specialist, providing asset management and investment advisory services in respect of over £5 billion of assets in the UK, Europe, Australia and North America. Amber's core business focuses on sourcing, developing, advising on, investing in and managing infrastructure assets within the utilities, PPP, accommodation, transport, renewable energy and regeneration sectors.
Amber provides investment advisory services to International Public Partnerships
Limited as well as private investment funds, specialising in urban regeneration. Amber is headquartered in London with offices in Edinburgh, Munich, Sydney, Melbourne and San Francisco and employs over 80 people, making it one of the largest international infrastructure specialists.
This information is provided by RNS
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