RBC Capital Markets, the corporate and investment banking arm of Canada’s RBC Financial Group, continues to expand its U.S. infrastructure and project finance group as the company recognizes the growing interest in public-private partnerships in the United States.
RBC, which has extensive experience in such transactions abroad, yesterday announced it hired Stephen Jones as a managing director and Robert Botschka as a vice president in the firm’s New York office. The new hires follow recent appointments of Aaron Barman and Andrew Mendelson to the group, the firm said in a release.
RBC is boosting its infrastructure and project finance group as U.S. state and local issuers are increasingly looking at opportunities to raise money for budgetary and transportation needs by signing long-term leases of public infrastructure facilities with private operators.
Such public-private partnerships have become widespread abroad and are catching on in this country after Chicago privatized its Skyway toll road last year and Indiana agreed to lease its 157-mile toll road to a private consortium in a $3.85 billion deal that is scheduled to close in June.
“The level of activity we are currently experiencing demands enhanced staffing to properly serve our governmental and acquisition clients,” John Hastings, who heads RBC’s infrastructure and project finance group, said in the statement. “Our growing participation in this emerging market will likely result in additional hires over the coming months.”
RBC ranked fourth among financial advisers last year, having worked on 246 issues totaling $8.1 billion, according to Thomson Financial. The firm is currently advising the Texas Department of Transportation, which is in the process of soliciting and reviewing proposals for private developers to construct, own, and operate parts of the Texas highway system, Hastings said. RBC is also FA to the North Texas Tollway Authority.
In Florida, the firm is advising a team bidding to build a toll road that would link New Tampa with Interstate 275. The Tampa-Hillsborough County Expressway Authority is seeking bids from companies interested in building the East-West Road, which has an estimated cost of $141 million, according to news reports. The bids are due in July.
RBC said it is co-arranger for the debt financing of the acquisition by Australia’s Macquarie Bank of Connecticut-based water utility company Aquarion Co. RBC also advised Spanish infrastructure company Sacyr in its runner-up bid for the 75-year lease of the Indiana Toll Road, which eventually went to the international consortium of Macquarie Infrastructure Group and another Spanish company, Cintra Concesiones de Infraestructuras de Transporte SA.
Jones and Botschka, who joined RBC from the structured finance division of ANZ Banking Group, will focus on serving the needs of U.S. governmental clients and global private acquisition firms. Jones previously headed the capital solutions team for Americas and Europe at ANZ, a major Australian bank based in Melbourne. Botschka served as a director in the corporate and structured finance group there.
Barman and Mendelson joined the group in December from Raymond James as a director and an associate, respectively. Barman has been in public finance for 25 years and has a strong background in stadium and toll road finance.
Hastings said in an interview that Barman, who has worked at Macquarie, was brought to help the firm specifically to expand its work on surface transportation projects, including toll roads. Hastings said RBC formed the U.S. infrastructure and public finance group about a year ago and will continue to expand it, building staff in New York and adding coverage on the West Coast.
“We believe that in the U.S., public finance and project finance are hand and glove,” Hastings said. “This business is evolving very quickly, and we as a firm feel very well positioned to react to our client’s changing needs whether with innovative structures or providing access to the debt markets outside of the U.S.”
RBC said its Toronto and London infrastructure practices have been active in public-private partnership transactions in Canada and Europe. RBC has been involved in the privatization of airports in Brussels and Copenhagen, the M1/Westlink road in Ireland, and the M77 motorway in the United Kingdom. In Canada, the firm has acted as lead arranger and adviser on the 407 toll road in Toronto and lead underwriter for the Blue Water Bridge.
“RBC Capital Markets has the complete platform to advise and finance clients interested in public-private partnerships,” Chris Hamel, who heads RBC’s public finance unit, said in the statement. “Our combination of a large U.S. municipal franchise with Canadian and European financing experience uniquely qualifies RBC as one of the top firms to lead advisory and debt financing mandates for clients participating in the acquisition and development of essential services in the U.S.”
Recently, Goldman, Sachs & Co. reshuffled the leadership of its public finance group to reflect the growing importance of public-private partnerships in the infrastructure sector. Goldman named Tracy Wolstencroft as head of the municipal finance and infrastructure group and appointed Mark Florian, who worked on the trailblazing $1.83 billion Chicago Skyway privatization and the lease of the Indiana Toll Road, the group’s chief operating officer.
