LGIM arranges €507m of debt for London's new port

Legal & General Investment Management (LGIM) has announced a long-term debt investment of £400 mln (€507 mln) in DP World’s London Gateway Port, forming part of a £580 mln secured financing transaction.

The operation is being carried out on behalf of Legal & General Retirement (LGR) and the Pension Protection Fund (PPF), which are contributing £250 mln and £150 mln respectively, in senior debt for the project over a 30-year loan term, managed by LGIM Real Assets.

Two additional investors provided a further £180 mln of debt. The money will part refinance the existing project finance loan, and help to finance the port’s third berth, thereby significantly extending its current capacity.

The loan was arranged by Citi, on behalf of London Gateway’s owner and developer, DP World.

'The investment in the port is a win for UK infrastructure, UK growth and UK pensions. Funding the port with long-term capital will help UK businesses grow by increasing global trade; in return pension funds will derive an income to pay their pensioners,' said Kerrigan Procter, managing director of LGR.

Legal & General has invested £7 bn in UK infrastructure, direct investments and urban regeneration projects, and said it aims to invest a total of £15 bn.

Barry Kenneth, CEO at the Pension Protection Fund, commented: 'Infrastructure investment is a key part of our investment approach. We want to invest in assets that give us long term stable cash flows to ensure that we are able to meet our long term obligations to our members.'

The UK’s first new port in over two decades, London Gateway, situated on the Thames estuary at Stanford-le-Hope, Essex, is set to add 3.5 million container twenty-foot equivalent units to Britain’s port.