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L&G completes HS1 deal

Legal & General announces that it has provided circa GBP120 million of debt in support of the Equitix, HICL and Infrared consortium’s purchase of High Speed 1 (HS1), the high-speed railway connecting London to the Channel Tunnel. 

The deal was financed by LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR), and represents its second investment in UK rail related infrastructure this year after it helped to finance a fleet of new Bombardier trains for the First MTR South Western Trains franchise in June. 
The 68 mile line runs from the capital to Kent connecting St Pancras station with the Channel Tunnel and serves four stations including St Pancras International, Stratford International, Ebbsfleet International and Ashford International. HS1 has a 30-year concession agreement with the UK Secretary of State, to operate and manage the railway, which is the only high-speed railway in the UK at the moment, while plans are being made for High Speed 2. HS1 opened in 2007 and Borealis and the Ontario Teachers Pension Plan acquired the railway line from the Government in 2010.
Charles-Henry Lecointe, Senior Investment Manager, LGIM Real Assets, says: “HS1 reinforces our continued commitment to investing in key UK infrastructure assets which will have a major impact on stimulating economic growth while ensuring long-term cash flow for pension funds.  As UK’s only high-speed railway, HS1 is a strategically important asset, connecting South East England with Europe and will generate stable returns for investing pension funds.”
Kerrigan Procter (pictured), Managing Director of LGR, says: “Legal & General has invested GBP12 billion in UK infrastructure, direct investments and urban regeneration projects to date, and aims to invest a further GBP15 billion.  Our financing of this major infrastructure project is a strong investment fit for us as the long term income it produces helps to pay our customers’ pensions, as well as creating new jobs and driving economic growth – which is good for business and our customers.”

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