£13bn deal to refinance BAA

The under-fire owner of Britain’s biggest airports today unveiled the completion of a £13bn (€16bn) refinancing.

BAA, which operates seven UK airports including Heathrow, Gatwick and Stansted, said the new long-term loan facilities included funding for “immediate” improvement projects across its portfolio.

The Spanish-owned firm said £2.75bn (€3,4bn) had been earmarked for “much needed capacity expansion” and to “improve the passenger experience” at Gatwick, Heathrow and Stansted, with another £255m (€323m) for its other hubs of Southampton, Glasgow, Aberdeen and Edinburgh.

Its announcement comes in the week the Competition Commission is expected to recommend the break-up of the company, possibly through the sale of Gatwick. BAA was bought in 2006 by Spanish consortium Ferrovial for £10.3bn (€13bn).

Chief executive Colin Matthews said the moves ensured BAA had the right financial structure to deliver its investment programme to expand airport capacity, build new facilities and provide “a better service to passengers and airlines”.

He added: “This is the largest financing of its kind ever completed, and the fact that a landmark transaction of this size and complexity has been completed in challenging credit markets is a testament to the strength of the business and the confidence of the financial markets in BAA and its airports.”

The group’s refinancing package, which repays the acquisition facilities put in place in 2006, includes new debt funding from a raft of banks including HSBC and Royal Bank of Scotland.

BAA chairman Nigel Rudd revealed at the weekend that he expected the Competition Commission (CC) to recommend the sell-off of Gatwick or Stansted - or both – together with one of the Scottish airports.