French investors launch Europe’s first project bonds for digital infrastructure

A group of French investors has launched the country’s first project bonds in a deal to finance superfast broadband infrastructure in France.

The European Investment Bank (EIB) group comprises FIDEPPP (Fonds d’investissement des Caisses d’Epargne), Caisse des Dépôts, Bouygues Energies & Services and Axione — all shareholders of Axione Infrastructures.

The investors have been working with the EIB and the European Commission to launch the bond issue. 

The deal will give Axione Infrastructures €189.1m in bond finance, enabling it to continue and extend the rollout of fast and superfast digital infrastructure in several departments in France, the EIB said.

Natixis Asset Management, whose subsidiary MIROVA manages FIDEPPP, has managed the issue, which will finance broadband access in sparsely populated areas.

Anne-Christine Champion, global head of infrastructure and projects at Natixis, said: “This public bond issue is innovative in several respects.”

She said it was the first project bond in France, and the first in Europe within the telecommunications infrastructure sector to benefit from the EIB project bond credit enhancement programme. 

“Thanks to the EIB credit enhancement, the bond received a Baa2 rating from Moody’s,” she said.

“This structure allows Axione Infrastructures to gain attractive long-term amortising financing by institutional investors.”

Project bonds were established as a new form of finance by the EIB and the European Commission two years ago.

The bonds were launched with the aim of speeding up the mobilisation of private capital for European infrastructure projects – in particular the rollout of fibre optics in sparsely populated areas, the EIB said.

It said its involvement had made the bonds possible because of a 20% senior debt enhancement, which it said made the placement particularly attractive to investors.

The EIB said this was the third project bond financed by the EIB in Europe under the project bonds initiative.

Axione Infrastructures is 55% owned by FIDEPPP, 30% by Caisse des Dépôts and 15% by Axione.

Bouygues Energies & Services and Axione are both subsidiaries of Bouygues Construction.