OFFERING CIRCULAR Sociedad Concesionaria Autovía de la Plata, S.A. (incorporated in Spain with limited liability) €184,500,000 3.169 per cent. Bonds due 31 December 2041 Issue Price 100 per cent. OFFERING CIRCULAR ( DOCUMENTO INFORMATIVO DE INCORPORACIÓN ) ON THE EVENTUAL ADMISSION (INCORPORACIÓN) OF SECURITIES ON THE SPANISH ALTERNATIVE FIXED-INCOME MARKET (MARF) The €184,500,000. 3.169 per cent. Bonds due 31 December 2041 (the Bonds) have been issued by Sociedad Concesionaria Autovía de la Plata, S.A. (the SPV, the Issuer or the Company), a corporation (Sociedad Anónima) organised under the laws of Spain, registered in the Madrid Companies Register in volume 30,409, sheet 177, section 8ª, page M-547341, with tax identification number A-86591278. The Bonds are constituted by a trust deed (the Trust Deed) dated the Closing Date (as defined below) between the Issuer and BNP Paribas Trust Corporation UK Limited as bond trustee (in this capacity, the Bond Trustee). This offering circular (the Offering Circular) constitutes a Documento Informativo de Incorporación for the purposes of admission (incorporación) of the Bonds to the Multilateral Trading System known as Alternative Fixed Income Market (Mercado Alternativo de Renta Fija or MARF). MARF adopts the legal structure of a multilateral trading facility (MTF), under the terms provided for in Articles 118 et seq. of the Law 24/1988 on Securities Market ( LMV), constituting an alternative, unofficial and not regulated market for the trading of fixed-income securities in accordance with the provisions of Directive 2004/39/EC. The Issuer will request the admission (incorporación) of the Bonds to trading on MARF within 30 days following the Closing Date (as defined below). The denomination of the Bonds shall be €100,000. Interest on the Bonds accrues from (and including) 27 May 2015 (the Closing Date). Interest on the Bonds is payable semi- annually in arrear on 30 June and 31 December in each year, commencing on 30 June 2015. Payments on the Bonds will be made without deduction for or on account of taxes in Spain to the extent described under and subject to the customary exceptions described in " Terms and Conditions of the Bonds — Taxation". The Bonds mature on 31 December 2041 but may be redeemed before then at the option of the Issuer in whole at any time at their principal amount together with accrued interest and a make whole premium. The Bonds are also subject to redemption in whole or in part, at their principal amount, together with accrued interest, at the option of the Issuer at any time in the event of certain changes affecting taxation in Spain. In addition, if the Concession Agreement (as defined below) is terminated, then the Issuer shall, upon receipt of the relevant Compensation (as defined below), immediately pay such Compensation into the General Account (as defined below) and in the manner described herein redeem the Bonds in whole at their principal amount, together with accrued but unpaid interest to such date, and, in certain circumstances, a make whole premium. See "Terms and Conditions of the Bonds – Redemption and Purchase" for details of these and other circumstances in which the Bonds may be redeemed early. The Bonds contain certain obligations for the Issuer, as detailed in Condition 5 (General Covenants) of the Bonds.
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OFFERING CIRCULAR
Sociedad Concesionaria Autovía de la Plata, S.A.
(incorporated in Spain with limited liability)
€184,500,000
3.169 per cent. Bonds due 31 December 2041
Issue Price 100 per cent.
OFFERING CIRCULAR (DOCUMENTO INFORMATIVO DE INCORPORACIÓN) ON THE EVENTUAL
ADMISSION (INCORPORACIÓN) OF SECURITIES ON THE SPANISH ALTERNATIVE FIXED-INCOME
MARKET (MARF)
The €184,500,000. 3.169 per cent. Bonds due 31 December 2041 (the Bonds) have been issued by Sociedad Concesionaria
Autovía de la Plata, S.A. (the SPV, the Issuer or the Company), a corporation (Sociedad Anónima) organised under the
laws of Spain, registered in the Madrid Companies Register in volume 30,409, sheet 177, section 8ª, page M-547341, with
tax identification number A-86591278.
The Bonds are constituted by a trust deed (the Trust Deed) dated the Closing Date (as defined below) between the Issuer
and BNP Paribas Trust Corporation UK Limited as bond trustee (in this capacity, the Bond Trustee).
This offering circular (the Offering Circular) constitutes a Documento Informativo de Incorporación for the purposes of
admission (incorporación) of the Bonds to the Multilateral Trading System known as Alternative Fixed Income
Market (Mercado Alternativo de Renta Fija or MARF). MARF adopts the legal structure of a multilateral trading
facility (MTF), under the terms provided for in Articles 118 et seq. of the Law 24/1988 on Securities Market (LMV),
constituting an alternative, unofficial and not regulated market for the trading of fixed-income securities in accordance with
the provisions of Directive 2004/39/EC.
The Issuer will request the admission (incorporación) of the Bonds to trading on MARF within 30 days following the
Closing Date (as defined below). The denomination of the Bonds shall be €100,000.
Interest on the Bonds accrues from (and including) 27 May 2015 (the Closing Date). Interest on the Bonds is payable semi-
annually in arrear on 30 June and 31 December in each year, commencing on 30 June 2015. Payments on the Bonds will be
made without deduction for or on account of taxes in Spain to the extent described under and subject to the customary
exceptions described in "Terms and Conditions of the Bonds — Taxation".
The Bonds mature on 31 December 2041 but may be redeemed before then at the option of the Issuer in whole at any time at
their principal amount together with accrued interest and a make whole premium. The Bonds are also subject to redemption
in whole or in part, at their principal amount, together with accrued interest, at the option of the Issuer at any time in the
event of certain changes affecting taxation in Spain. In addition, if the Concession Agreement (as defined below) is
terminated, then the Issuer shall, upon receipt of the relevant Compensation (as defined below), immediately pay such
Compensation into the General Account (as defined below) and in the manner described herein redeem the Bonds in whole
at their principal amount, together with accrued but unpaid interest to such date, and, in certain circumstances, a make whole
premium. See "Terms and Conditions of the Bonds – Redemption and Purchase" for details of these and other circumstances
in which the Bonds may be redeemed early. The Bonds contain certain obligations for the Issuer, as detailed in Condition 5
(General Covenants) of the Bonds.
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The Bonds constitute senior obligations of the Issuer, to be secured as provided for in Condition 3 (Security). The Security
will be held in accordance with the terms of a security trust and subordination deed (the Security Trust and Subordination
Deed) dated the Closing Date between, inter alios, the Issuer and BNP Paribas Trust Corporation UK Limited as security
agent (in this capacity, the Security Agent). See also "Terms and Conditions of the Bonds – Security".
The Bonds are represented by book entries in Iberclear. See "Summary of Clearance and Settlement Procedures applicable
to Book-Entry Notes".
The Bonds are expected to be rated BBB by Standard & Poor's Rating Services (S&P) on or about the Closing Date. A
rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at
any time by the assigning rating agency. S&P is established in the EU and registered under Regulation (EC) No 1060/2009
(the CRA Regulation).
Prospective investors should have regard to the factors described under the section of this Offering Circular headed "Risk
Factors" on page 16 of this Offering Circular.
This Offering Circular (Documento Informativo de Incorporación) is not a prospectus (folleto informativo) within the
meaning of Directive 2004/39/EC and has not been registered with the National Securities Market Commission (CNMV).
The offering of the Bonds does not constitute a public offering in accordance with the provisions of Article 30bis of the
LMV and therefore there is no obligation to approve, register and publish a prospectus (folleto informativo) with the CNMV.
As established by rule 2 of Circular 3/2014 of MARF, dated 29 October, this issuance of Bonds is intended exclusively for
professional and qualified investors in accordance with the provisions of Article 78bis 2 of the LMV and Article 39 of Royal
Decree 1310/2005 of 4 November, with regard to the admission of securities to trading on official secondary markets, public
offerings or subscription and the prospectus required for this purpose (Royal Decree 1310/2005).
No action has been taken in any jurisdiction to permit a public offering of the Bonds or the possession or distribution of the
Offering Circular or any other offering material in any country or jurisdiction where such action is required for said purpose.
SOLE ARRANGER AND GLOBAL COORDINATOR
HSBC BANK plc
JOINT BOOKRUNNERS
HSBC BANK plc
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. BANCO SANTANDER, S.A.
The date of this Offering Circular is 27 May 2015
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IMPORTANT NOTICES
This Offering Circular in relation to the Bonds includes the required information as established in Annex 1-B of
Circular 3/2014 of MARF, dated 29 October, on admission and exclusion of securities on MARF and the
procedures with respect to the same.
None of the Issuer nor HSBC Bank plc, Banco Bilbao Vizcaya Argentaria, S.A. and Banco Santander, S.A. (the
Joint Bookrunners), the Bond Trustee nor the Security Agent has authorised anyone to provide information to
potential investors different from the information contained in this Offering Circular and other publicly
available information. Potential investors should not base their investment decision on information other than
that contained in this Offering Circular and alternative sources of public information. Any information or
representation not contained in this Offering Circular must not be relied upon as having been authorised by or
on behalf of the Issuer, the Joint Bookrunners, the Bond Trustee or the Security Agent.
Neither the delivery of this Offering Circular nor any sale made in connection herewith shall, under any
circumstances, create any implication that there has been no change in the affairs of the Issuer since the date
hereof or the date upon which this Offering Circular has been most recently amended or supplemented or that
there has been no adverse change in the financial position of the Issuer since the date hereof or the date upon
which this Offering Circular has been most recently amended or supplemented, or that the information
contained in it or any other information supplied in connection with the Bonds is correct as of any time
subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the
same.
To the fullest extent permitted by law, none of the Joint Bookrunners, the Bond Trustee nor the Security Agent
assumes any liability for the contents of the Offering Circular or for any other statement made or purported to be
made by the Joint Bookrunners, the Bond Trustee or the Security Agent or on their behalf in connection with the
Issuer or the issue and offering of the Bonds. The Joint Bookrunners, the Bond Trustee and the Security Agent
accordingly disclaim all and any liability whether arising in tort or contract or otherwise (save as referred to
above) which it might otherwise have in respect of this Offering Circular or any such statement.
None of the governing body of MARF, the CNMV, the Joint Bookrunners, the Bond Trustee nor the Security
Agent has approved or verified the contents of the Offering Circular, the financial statements of the Issuer, the
rating report or the risk of the issuance required under Circular 3/2014. The governing body of MARF does not
acknowledge or confirm the completeness, understanding or consistency of the information included in the
documentation provided to them by the Issuer in relation to the issuance of the Bonds.
The Bonds are represented by book entries in Iberclear (as defined below). The Issuer expressly declares that it
has met the requirements for registration and settlement of the transaction in Iberclear. See "Summary of
Clearance and Settlement Procedures applicable to Book-Entry Notes".
The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the
knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the
information contained in this Offering Circular is in accordance with the facts and does not omit anything likely
to affect the import of such information.
The Issuer expressly declares that it is aware and knows the requirements and conditions necessary for
admission of the Bonds on MARF under current legislation and the requirements of its governing bodies and
expressly agrees to comply therewith.
This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Joint
Bookrunners to subscribe or purchase, any of the Bonds. The distribution of this Offering Circular and the
offering of the Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this
Offering Circular comes are required by the Issuer and the Joint Bookrunners to inform themselves about and to
observe any such restrictions.
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It is recommended that potential investors fully and carefully read the Offering Circular prior to any investment
decision. Potential investors should, in addition, have regard to each original document described, or referred to,
in this Offering Circular. All descriptions of documents referred to in this Offering Circular are qualified in their
entirety by reference to the terms of the original documents.
For a description of further restrictions on offers and sales of Bonds and distribution of this Offering Circular,
see the section of this Offering Circular headed "Sale of the Bonds".
The Bonds have not been and will not be registered under the U.S. Securities Act of 1933 (the Securities Act).
Subject to certain exceptions, Bonds may not be offered or sold within the United States or to U.S. persons.
Unless otherwise specified or the context requires, all references herein to euro or € are to the single currency
introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on
the functioning of the European Union, as amended from time to time.
REGULATION OF INVESTMENTS IN SECURITISATIONS
The Issuer is of the opinion that the requirements of Articles 404-410 of the Capital Requirements Regulation
(Regulation (EU) No. 575/2013) and corresponding requirements adopted pursuant to Article 17 of the EU
Alternative Investment Fund Managers Directive (Directive 2011/61/EU) and Article 135(2) of the EU
Solvency II Directive (Directive 2009/138/EC, as amended by Directive 2014/51/EU) do not apply to the
Bonds. Investors in the Bonds are responsible for analysing their own regulatory position and none of the Issuer,
the Joint Bookrunners or any of the parties to the transaction of which the Bonds form part makes any
representation to any prospective investor or purchaser of the Bonds regarding the regulatory capital treatment
of their investment in the Bonds on the Closing Date or at any time in the future.
Articles 404-410 of the Capital Requirements Regulation, corresponding requirements under other regulations
and directives and any other changes to the regulation or regulatory treatment of the Bonds for some or all
investors may negatively impact the regulatory position of individual investors and, in addition, have a negative
impact on the price and liquidity of the Bonds in the secondary market.
FORWARD-LOOKING STATEMENTS
This Offering Circular contains various forward-looking statements regarding events and trends that are subject
to risks and uncertainties that could cause the actual results, performance or achievements of the Issuer to differ
materially from the information presented herein. Such forward-looking statements are based on numerous
assumptions regarding the Issuer's present and future business strategies and the environment in which the
Issuer will operate in the future.
When used in this Offering Circular, the words "estimate", "project", "intend", "anticipate", "believe", "expect",
"should", "plan", "targets", "aims", "will", "would", "may", "could", "continue" and similar expressions, as they
relate to the Issuer, its management and the Project, are intended to identify such forward-looking statements.
All statements other than statements of historical fact included in this Offering Circular, including, without
limitation, those statements regarding the Issuer's financial position, business strategy, management plans and
objectives for future operations, are forward-looking statements. These forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the Issuer's actual results,
performance or achievements, or industry results, to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as at the date hereof. Save as otherwise
required by any rules or regulations, the Issuer does not undertake any obligations publicly to release the result
of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Additional factors that could cause actual results, performance or achievements to differ materially include, but
are not limited to, those discussed under the section of this Offering Circular headed "Risk Factors". Any
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forward-looking statements contained in this Offering Circular speak only as at the date of this Offering
Circular.
Without prejudice to any requirements under applicable laws and regulations, the Issuer expressly disclaims any
obligation or undertaking to disseminate after the date of this Offering Circular any updates or revisions to any
forward-looking statements contained herein to reflect any change in expectations thereof or any change in
events, conditions or circumstances on which any such forward-looking statement is based.
Save as required by any applicable rules or regulations, the Issuer is not under any obligation to update any
forward-looking information set forth in this Offering Circular and does not intend to do so.
DESCRIPTION OF THE ISSUER .......................................................................................................................31
DESCRIPTION OF THE REGULATORY REGIME ..........................................................................................36
DESCRIPTION OF THE PROJECT ....................................................................................................................43
DESCRIPTION OF THE CONCESSION AGREEMENT AND THE CONSTRUCTION CONTRACT ..........48
SELECTED HISTORICAL FINANCIAL INFORMATION ...............................................................................57
SUMMARY OF THE FINANCE DOCUMENTS................................................................................................59
TERMS AND CONDITIONS OF THE BONDS .................................................................................................61
SALE OF THE BONDS......................................................................................................................................120
USE OF PROCEEDS..........................................................................................................................................122
FUNCTIONS OF THE REGISTERED ADVISER (ASESOR REGISTRADO) OF MARF ...............................123
SUMMARY OF CLEARANCE AND SETTLEMENT PROCEDURES APPLICABLE TO BOOK-ENTRY NOTES................................................................................................................................................................125
The Issuer is a special purpose vehicle whose principal activities comprise the construction, maintenance and
operation of a 49 km-long new section of the A-66 highway between Benavente and Zamora (Castilla y León,
Spain) for a concession period of 30 years starting on 14 December 2012 and ending on 14 December 2042,
pursuant to the Concession Agreement. The Concession Agreement was commissioned by the Directorate
General of Roads of the Secretary of State for Infrastructure, Transport and Housing of the Public Works
Ministry (Dirección General de Carreteras, Organización y Funciones de la Secretaria General de
Infraestructuras del Ministerio de Fomento).
Directors
The table below sets forth the directors of the Issuer as of the date of this Offering Circular:
Name Board position Date of first appointment
Mr. David Delgado Romero Vice President 15 November 2012Mr. Thierry Edmond Deau Member 15 November 2012Acciona Corporación, S.A.* Member 15 November 2012Acciona Desarrollo Corporativo, S.A.** Member 15 November 2012Mr. Sergio Rodríguez Casado President 05 February 2014Meridiam Infrastructure Finance II S.à.r.l*** Member 15 November 2012Mr. Rufino Genaro Del Río Aparicio Member 07 March 2013Ms. Cristina Álvarez Fernández Member 23 September 2014
* Represented by Mr. Juan Antonio Santos de Paz.** Represented by Mr. Antonio Pérez de Arenaza Lamana.*** Represented by Mr. Antonio Fournier Conde.
The directors can be reached at the Issuer's registered office.
Biographical information
The following is the biographical information of each of the members of the board of directors:
Mr. David Delgado Romero: Mr. Delgado Romero has ten years of experience in the transportation and
infrastructure sector. Mr. Delgado Romero has been working with Meridiam SAS (Meridiam) since 2005 and
has participated in the closings of Limerick Tunnel (Ireland) and LIFT portfolio (UK) and led the A5 motorway
(Germany) closing in March 2009. Mr. Delgado Romero has also participated in the preparation of bids and
undertaken due diligence for projects in France, Portugal, Belgium, Romania, Spain and Poland. Mr. Delgado
Romero is a Civil Engineer from the Polytechnic University of Catalonia where he also gained a Master of
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Science in Transportation. He also graduated from Harvard School of Government with a Master in Public
Administration.
Mr. Thierry Edmond Deau: Mr. Deau graduated from Ecole Nationale des Ponts et Chaussées engineering
school in Paris and began his career in Malaysia with the construction firm of GTM International. He then
joined France's Caisse des Dépôts et Consignations where he held several positions with its engineering
subsidiary Egis Projects, moving up from project manager, then director of concession projects to his
appointment as Chief Executive Officer of Egis in 2001. In addition to being in charge of international
operations for the Egis Group executive committee and serving on its risk management committee, Mr. Deau
was a member on some of the boards and the chairman on other boards of several subsidiaries. Mr. Deau
founded Meridiam in 2005 with the support of the Crédit Agricole group, and is currently Meridiam's Chairman
and Chief Executive Officer, as well as its main shareholder, along with several members of the team.
Mr. Sergio Rodríguez Casado: Mr. Rodríguez Casado joined Meridiam in 2013. He has worked for the last 15
years at BBVA including the last 7 years in the Project & Structured Finance department in Paris where he has
been directly involved, among other transactions in Europe, in some of the most important infrastructure
Bordeaux, HSL BPL, A63 toll road, GSM-R, Prado Sud, A19 and the APRR toll road privatisation. Mr.
Rodríguez Casado graduated in Finance and Business Administration (E-2) from ICADE Business School,
Comillas University (Madrid, Spain).
Mr. Rufino Genaro Del Río Aparicio: Mr. Del Río Aparicio has over 19 years of experience in the infrastructure
and construction sectors, both in Spain and in international markets. He is a civil engineer, and worked three
years in Tecsa (Dragados), one of the leading construction companies in Spain, before moving to Madrid, where
he has been involved from 1999 in the development of Transport Infrastructure Projects in Cintra; first at Cintra
Aparcamientos (Cintra's car parking division; now Empark) in several positions: Project Manager (one year),
Regional Director (three years), and Development Director (one year). Then, as Managing Director of R4
Madrid-Ocaña Motorway project (two years). In 2007, he moved to Greece where he was appointed CEO of
Nea Odos, S.A. and also CEO of Kentrikí Odos, S.A. (investment of more than €2.4 billion in 6 years). In
March 2011, he moved back to Spain, as Managing Director of Autopista Madrid Sur (Radial 4) and Autopista
Alcala-O'Donnell. In March 2013, he was named Director for Spain at Cintra. Rufino has been involved in most
aspects of Infrastructure Projects with Cintra over the past 16 years with wide experience in Project Finance
(highways and car parks).
Ms. Cristina Álvarez Fernández: Ms. Álvarez Fernández is the head of the legal department of Cintra for
Europe. Ms. Álvarez Fernández joined Cintra in November 2006. Previously, she was an associate at
Cuatrecasas Gonçalves Pereira law firm (1996-2006). In 2004, she worked as a lawyer in the commercial law
department of the English law firm Herbert Smith Freehills at its London office. While at Cintra, she has
specialised in the negotiation and implementation of public-private partnerships projects (PPPs) related to
transportation infrastructure. Since joining Cintra in 2006 until 2014, Ms. Álvarez Fernández was responsible
for the legal department of Cintra – U.S.
Officers
The table below sets forth the officers of the Issuer as of the date of this Offering Circular:
Name Function
Mr. Jaime Platón Lamela Pascua Chief Executive Officer (CEO)
Mr. Alexandre Miguel Pérez Matos Chief Financial Officer (CFO)
Mr. Ignacio Martín González Chief Technical Officer (CTO)
The officers can be contacted at the Issuer's registered office.
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Biographical information
The following is the biographical information of each of the members of our senior management team:
Mr. Jaime Platón Lamela Pascua: Mr. Platón Lamela has ten years’ experience as an engineer for Ferrovial
Agroman and Cadagua. He previously acted as CEO for construction of the Serranopark car park Project in
Madrid.
Mr. Alexandre Miguel Pérez Matos: Mr. Pérez Matos has over ten years' experience in finance and accounting
roles at financial institutions and project companies. He previously acted as chief financial officer for
Transmontana Motorway Concession in Portugal.
Mr. Ignacio Martín González: Mr. Martín González has 12 years' experience as an engineer for Iberinsa and
Acciona. He previously acted as technical project manager for projects in Canada (NA30, Southeast Stoney
Trail, Rt. Hon. Herb Gray Parkway), Chile, Brazil and Spain.
Management and control
The Issuer is managed and controlled in Spain. As of the date of this Offering Circular, the Issuer is subject to,
and complies with, the Spanish Corporate Companies Act.
Employees
As of the date of this Offering Circular, the Issuer has five employees. The CEO and CTO are working for the
Issuer through service provider contracts entered into with Cintra and Acciona. The Issuer plans to hire and has
budgeted for 25 full time employees and four people at management level for the road maintenance services
when the operation activities are closer to their commencement.
Shareholders
Meridiam Infrastructure Finance II S.à.r.l.
The address of Meridiam Infrastructure Finance II S.à.r.l. is 5 allée Scheffer, L- 2520 Luxembourg, R.C.S.
149218. Meridiam Infrastructure Finance II S.à.r.l. is a wholly owned subsidiary of Meridiam Infrastructure
Europe II (SCA) SICAR.
Founded in 2005, Meridiam is a long-term independent investment firm specialising in the development,
financing, and management of public infrastructure projects through their core 25-year duration institutionally-
backed funds. Meridiam has more than 100 investment professionals and asset managers across offices in Paris,
New York, Istanbul and Toronto, among others.
With nearly €2.8 billion of assets under its management, Meridiam has to date invested in 40 projects and
received the Global Infrastructure Fund of the Year award in 2011 and European Infrastructure fund of the Year
2012, as well as the Infrastructure Journal Global transport investor of the year and North America transport
investor of the year awards in 2014. Meridiam obtained an ISO 9001 certificate for its responsible investment
process in January 2012.
Cintra Infraestructuras, S.A.
The address of Cintra Infraestructuras, S.A. (Cintra) is Plaza Manuel Gómez Moreno 2, Edificio Alfredo
Mahou, Madrid, 28020, Spain with additional offices in Austin, Texas (United States); Lisbon (Portugal);
Bogota (Colombia) and Sydney (Australia). Cintra Infraestructuras, S.A. is a subsidiary of Ferrovial, S.A.
Incorporated in 1998, Cintra develops and manages a portfolio of 28 concessions in countries such as Canada,
United States, Spain, United Kingdom, Portugal, Ireland and Greece, with a total of 2,200 km of roadways.
These assets include the 407 ETR highway in Canada; the Chicago Skyway in United States and Ausol, in
Spain. Cintra engages in managing the various stages of a project's life that range from the tender, financing,
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design, construction, and implementation of infrastructure, to operations and maintenance, and final handback to
the governing body concerned.
Cintra's investment totals more than €23,365 million and EBITDA of €276 million (2013). In 2014, Cintra was
awarded #2 Global Infrastructure Developer of the Year by Public Works Financing magazine. Additionally, the
NTE roads in Texas were awarded with two ARTBA Globes by the American Road & Transportation Builders
Association (ARTBA), the oldest and most highly respected U.S. transport infrastructure constructors'
association.
Acciona Infraestructuras, S.A.U.
The address of Acciona Infraestruturas S.A.U. (Acciona) is Avenida de Europa 18, La Moraleja, Alcobendas,
28108, Spain. Acciona covers all aspects of construction and offers its clients its experience in design,
engineering and execution of all kinds of works, as well as operations and maintenance. Acciona has a hundred-
year history of construction activity, and its philosophy is based on sustainability, quality, technology and
experience. It embarks upon all of its activities taking into consideration a range of environmental, social and
economic aspects under the overall principle of sustainability, and strives constantly to improve construction
processes, innovation and the application of steps aimed at protecting the environment.
Acciona develops two main lines of activity - civil works and building construction - which are arranged under
three strategic specialised business units: Tunnels & Railways, Roads & Bridges and Ports & Maritime Works.
Its organisational structure is completed with Acciona Engineering, Acciona Industrial and Acciona
Concessions, as well as high added value units such as the Metal Structure Workshop, Machinery Services,
Acciona Infrastructure Maintenance, and a number of specialist auxiliary companies. Acciona Concessions is
dedicated to the private development, design, construction, financing, management, operation and maintenance
of infrastructure in the social infrastructure sectors (hospital services and education centres), and transport
infrastructure (roadways, railways, ports and irrigation system).
Acciona operates as a 100% subsidiary of Acciona, S.A. Founded in 1861 as MZOV Railway Concession
company, it operates in infrastructure, energy, water and services in over 30 countries. Its corporate motto
"Pioneers in development and sustainability" reflects its commitment — across all its activities — to contribute
to economic growth, social welfare and the protection of the environment. This effort has been recognised
through its inclusion in the Dow Jones (DJSI) and FTSE4Good sustainability indexes. Acciona is quoted on the
Ibex-35 stock index, has a 33,000-strong workforce and posted revenues of €6,500 million in 2014.
Financial Statements
The Issuer has prepared financial statements for each of the years ended 31 December 2014 and 2013 (in
Spanish), in accordance with the applicable Spanish financial reporting framework (Spanish GAAP), which
have been audited by Deloitte, S.L. and are attached to this Offering Circular as Annexes 1 and 2, respectively.
Auditors
The Issuer has appointed Deloitte, S.L. as its auditor for each of the years ended at 31 December 2015, 31
December 2014 and 31 December 2013. The address of Deloitte, S.L. is Plaza Pablo Ruiz Picasso, 1, Torre
Picasso, 28020, Madrid, Spain.
Insurance
The Contractor has currently in place a construction risk insurance policy contracted with Generali España, S.A.
de Seguros y Reaseguros for the value of the construction cost for the whole of the Project throughout the
construction period. This is an "all risk" insurance, machinery and equipment and third party (civil) liability.
The sums insured are (i) construction: up to €148,204,555.43 (full budgeted value of the Works); (ii) civil
liability: €3 million per occurrence, with no limitation on the number of occurrences; (iii) sublimit per victim:
€300,000 (employers' liability); and (iv) Advance Loss of Profit (ALOP): €20,785,416.67.
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Additionally, the Issuer has currently in place a property damage insurance policy contracted with Royal & Sun
Alliance Insurance plc, Sucursal en España (RSA) for the operation under the Concession. The sums insured are
(i) property damage (course, structures, viaducts and tunnels) up to €151,352,403 and (ii) business interruption
up to €22,675,000, with a combined limit of compensation of up to €125,000,000.
Existing Financing
Bank facilities were made available by the European Investment Bank (EIB), on one hand, and by the Instituto
de Credito Comercial (ICO), Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) and Banco Santander S.A., on
the other hand, in favour of the Issuer for the financing of the Project, pursuant to the relevant commercial
facility agreements. Both bank facilities are dated 31 July 2013 (the Existing Financing).
Two hedging agreements with Banco Bilbao Vizcaya Argentaria, S.A. – (BBVA) and Banco Santander S.A.
were signed under the Asociación Española de Banco Privado's model (Contrato Marco de Operaciones
Financieras) both of which were entered into as a deed on 31 July 2013 (the Hedging Agreements).
Both the Existing Financing and the Hedging Agreements will be repaid in full on the Closing Date with the
proceeds of the issuance of the Bonds.
By a decision dated 3 March 2015, the Spanish Secretary of State of Infrastructure, Transport and Housing
authorised the refinancing of the Project through the issuance of the Bonds.
Technical Adviser
Mott MacDonald has been appointed as Technical Adviser for the issuance of the Bonds. Mott MacDonald is a
global management, engineering and development consultancy adding value for public and private clients on
agenda-setting and next-generation projects worldwide.
Tribunal, administrative and arbitration proceedings
As of the date of this Offering Circular the Issuer is currently involved in a tribunal proceedings in relation to a
plot of land that was expropriated for the construction of the Road filed before the Tribunal Superior de Justicia
of Castilla y León, Valladolid (Spain). Although the claimants claim approximately €3,720,000 as
compensation, the Issuer believes that there is no reasonable legal basis to support a claim of such amount and,
in the worst case scenario, such amount would still not exceed €290,000. The Issuer expects that the tribunal
proceedings will last just over 1 year.
Additionally, the Issuer is involved in several administrative expropriation proceedings for smaller amounts as a
result of some expropriations which were undertaken in relation to the Project. The fair price is pending to be
determined by the relevant expropriation administrative juries.
Each of the Shareholders of the Issuer has put in place an Expropriation Letter of Credit with a top tier European
bank to cover for what the Issuer estimates to be the worst case amount that the Issuer might have to pay under
these proceedings.
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DESCRIPTION OF THE REGULATORY REGIME
The following is a brief summary of the Spanish regulatory regime applicable to the Project.
Roads in Spain are usually developed through the concession for public works regime. Roads developed
through the concession for public works regime are usually located on publicly owned land and involve the
exercise of public administrative powers relating to the regulation of traffic and local public roads. The
operation of public roads, which is usually granted to private parties under administrative concessions, is
subject to the ongoing control of the public authorities that grant the concessions.
The following summary applies to roads developed through the concession for public regime and which are
accordingly subject to the public regulatory regime.
Applicable legislation
The construction and operation of public roads pursuant to concessions granted by public authorities are
regulated in Spain by public laws which govern the construction, maintenance and operation of public roads and
contractual arrangements between private parties and Spanish public authorities. Public laws also impose certain
requirements and limitations with respect to various types of contracts entered into with public authorities.
In general, contracts entered into with public authorities in Spain are currently governed by the Public Sector
Contracts Law, a consolidated text approved by Legislative Royal Decree 3/2011 of 14 November (the TRLCSP).
Prior to the effectiveness of this restated text, the applicable legislation was Law 30/2007, dated 30 October, on
public sector contracts (the LCSP). In this regard, the Project is subject to the LCSP.
Public tender process and award
Concessions for public roads are awarded through a public tender process. Pursuant to the relevant legislation,
the public authorities enter into contracts for the concessions with private parties selected through the public
tender process. Under the public tender process, interested parties may submit their bids for the concession. The
specific conditions of the concession contract are set forth in the terms of tender (Pliegos de Condiciones
Administrativas y Técnicas) and in the contract itself. These conditions may differ and establish particular legal,
economic and technical terms for each type of contract and for each project. The specific legal and contractual
regime applicable to each concession contract is determined by the contract and the terms of tender for the
concession, as well as the relevant legislation in effect at the time the concession was awarded (hereinafter, the
terms of tender of the Project will be referred to as Terms of Tender).
Type of contract
The relevant legislation contemplates that public roads may be operated generally under three different types of
contracts: (i) a contract for the management of a public service without works (a "brown field" concession); (ii) a
contract for the management of a public service with works; and (iii) a contract for a concession of public works.
In this context, "works" refers to the construction of highway (a "green field" concession).
The primary type of contract used for the building and subsequent operation of public roads is a contract for a
concession of public works, which is the type of contract that has been used in the Project.
Term and renewal of administrative concessions
Contracts for a concession of public works have a maximum term of 40 years, extendable in certain
circumstances for 15% of the initial term. For any concession, the contract and the terms of tender will establish
the contract's term, which term may not exceed the maximum term permitted by the relevant legislation. The
Concession's term is for 30 years, counted from the day following signing of the agreement (i.e. until 14
December 2042).
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In certain circumstances, the term may be extended provided that such possibility of extension had been
contemplated in the terms of tender and that the maximum term permitted by the relevant legislation is not
exceeded. In this regard, the Terms of Tender establishes that the Concession term can only be extended when
the financial balance of the Concession is restored. If the activity or the execution of works is suspended due to
acts of the Public Works Ministry (Ministerio de Fomento) or to a force majeure event, this time will not be
counted as part of the Concession's term (see “Description of the Concession Agreement and the Construction
Contract - Term of the Concession Agreement”).
After the term of the contract expires (including the envisaged extensions), the contract may not be renewed
without undergoing a public tender process.
Risk assumption
The works are executed and the concessions are operated at the concessionaire's risk (riesgo y ventura).
Modifications of the concession
The authority may introduce changes in the contract for public interest, duly justifying its necessity. These
modifications may not affect the essential conditions of the contract. In this regard, extensions on the purpose of
the contract that cannot be integrated into the initial project through an amendment thereof or consisting in
providing independent use or directed to satisfy new purposes, may not be considered as modification of the
contract.
Under the applicable regulations, a public contract can only be modified in the following cases:
(a) when such modification (and its terms, limits and percentage of the price of the agreement that can be
modified, among other requirements) is expressly set out in the tender documents or concession itself;
or
(b) in any other event, under the following circumstances:
(i) the service is not adequate to satisfy the needs it was intended to cover due to mistakes
included in the project or technical specifications;
(ii) inadequacy of the project or of the specifications due to objective reasons consisting of
geological, hydrological, archaeological, environmental or similar conditions which determine
its unsuitability, which are discovered after contract award and which were not foreseeable by
exercising all care in accordance with good professional practice when the project or technical
specifications were drafted;
(iii) force majeure or an unexpected event that rendered it impossible to provide the service;
(iv) when it is convenient to incorporate new technical developments that will improve the
provision of the service and which were not available in the market prior to the awarding of
the contract; or
(v) it is necessary to adjust the provision of the service to new technical, environmental, urban,
safety or accessibility conditions passed after the granting of the concession.
The modification cannot alter the essential conditions set out for the bidding and the awarding of the concession.
In this sense, it can be understood that such essential conditions are altered in the following cases:
(a) when the modification substantially amends the functions and essential characteristics of the provision
to which the concession agreement refers;
(b) when the modification alters the relationship between the service and its price, based on the terms on
which such relationship was initially settled;
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(c) when a different professional qualification or solvency requirements are needed after the modification;
(d) when the modifications of the concession agreement (aggregated in the case of prior modifications) are
equal to or exceed 10% (above or below) the awarding price of the Concession; or
(e) in any other case in which it can be presumed that if the modification was known prior to awarding the
concession agreement, additional potential bidders could have been interested in the tender procedure
or that actual bidders would have filed a completely different bid.
Economic and Financial Plan
Bidders in the tender process are required to submit an economic and financial plan for the concession together
with their bid. This plan includes, among others, a detailed description of the system of tariffs, investment and
operating costs, payment obligations and the direct or indirect estimated financial costs (see the section of this
Offering Circular headed “Description of the Concession Agreement and the Construction Contract -
Concession Agreement – Economic and Financial Plan for the Concession”).
Concept of economic-financial rebalancing
The public authority that awards a concession contract has the authority to interpret the terms of the contract and
to amend the terms of the contract for "reasons of public interest". As a result, the authority cannot amend the
contract based on any political initiative but only under these limited circumstances (see "Modifications of the
concession" above).
The concept of reasons of public interest is not clearly defined in case law, and there is a risk in the
interpretation of this concept by the awarding authority. In any event, the awarding authority must justify the
existence of the reason of public interest in each particular case, and this interpretation may be challenged in
court.
In general, contracts are executed on the "principle of risk and venture" of the contractor, whereby the contractor
must assume the consequences that, in economic terms, may arise from the execution of the contract, as they
were agreed. Under Spanish law, the concept of financial rebalancing arises as a means to modulate the
application of the "principle of risk and venture" since its strict application could imply serious damage for the
contractor and for the public interest in certain events that could result in the breach of the concession, and
accordingly, of the public service inherent in it.
The public authority may rebalance the economic terms of the contract upon the occurrence of three general
types of events if such events result in a change which is detrimental to the concessionaire in the fundamental
economic balance that existed when the contract was awarded (and not just in a mere reduction of the expected
profits of the concessionaire):
(a) modification based on public interest reasons and in the events referred to above (see "Modifications of
the concession" above);
(b) the authority's acts or force majeure events which directly lead to a substantial breach of the economy
of the contract; and
(c) when any of the events occur or circumstances arise that, according to the terms of tender, might lead
to restoring the economic balance.
The concessionaire can make a claim to the public authority for financial rebalancing and must provide evidence
of the event and demonstrate the repercussions that result from the imbalance of the previously agreed terms.
The public authority may apply various measures to rebalance the economic-financial terms of the contract. In
general, the public authority will provide compensation for the imbalance that such amendments, measures or
events imply for the concessionaire or the loss and damage caused. The scope of the rebalancing will be the
amount necessary, in terms of prices, costs or other elements, to adjust, reasonably, the economic-financial
39
situation to that agreed in the concession contract. The degree of compensation (complete or partial) granted will
depend, essentially, on the cause of the imbalance.
The TRLCSP generally contemplates, depending on the circumstances, the following measures to achieve
rebalancing:
(a) amending the tariffs payable by users;
(b) in certain circumstances, amending the term of the contract (however, this would be subject to the
maximum legal term for the concession); and
(c) amending the clauses that contain the substantive economic terms of the contract.
The terms of tender and the terms of the concession contract may specifically limit the scope of the
circumstances under which a claim for financial rebalancing is available. The terms of tender and the terms of
the concession contract may specifically limit the scope of the circumstances under which a claim for financial
rebalancing is available. In this regard, according to clause 28.4 of the Terms of Tender of the Concession, the
following will not give right to the restoring of the Concession's financial balance:
(a) the carrying out of Area 2 and Area 3 works, with regards to those modifications, adjustment,
extensions or new road sections that belong to the same road infrastructure, that could be carried out by
the authority during the Concession's term, provided that their annual conservation cost (calculated
only for this purpose as 2% of the initial investment) and multiplied by the number of years during
which the Issuer has to maintain the same does not exceed 2% of the total investment cost in such Area
2 and Area 3 – this is, the Area 2 and Area 3 works that do not reach the referred limit, will not raise
the right to restore the financial balance of the Concession;
(b) the carrying out of the Area 2 and Area 3 works in the Area 1 road sections will not raise the right to
restore the financial balance of the Concession; and
(c) the alteration of local and regional road networks.
The recognition of the financial rebalancing in favour of the concessionaire generally implies an amendment to
the terms of the contract. Therefore, the rebalancing provisions are considered to be effective from the moment
of the contract amendment, without prejudice to the possibility of taking into consideration when the change that
prompted the rebalancing occurred when deciding the scope of the rebalancing.
Concession tariffs and other remuneration arrangements
The terms of tender and the contract establish the tariff scheme to remunerate the concessionaire. the issuer's
remuneration regime is a monthly fee based on the availability of the different road sections and the quality of
the service. Also, the terms of tender admit an additional remuneration arising from certain services (service
station, cashiers, car wash areas etc.) which are independent from the Issuer's base remuneration (see
“Description of the Concession Agreement and the Construction Conract – Remuneration of the Issuer”).
Authorisations and change of control clauses
Under some contractual arrangements, public authorities impose certain restrictions on the transfer of ownership
of the concessionaire and the guarantees and security interests that the concessionaire can grant to third parties.
For example, the concession contract may require the prior authorisation of the public authority in order for the
concessionaire to grant a mortgage over the concession. In some cases, a concession contract may contain a
change of control clause, which prohibits the transfer of the ownership of the concessionaire without the prior
approval of the public authority. In addition, public authorities may terminate the concession in the event that
insolvency or winding-up proceedings are instituted against the concessionaire.
General public procurement laws (including TRLCSP, Royal Decree-Law 3/2011, of 14 November (TRLCAP),
do not regulate transfers of shares in companies holding contracts or concessions. Although a legal theory of the
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Council of State (the supreme consultative council of the Spanish government) attempts to consider changes of
control through the transfer of shares the same as events of assignment of contracts or concessions (thus
requiring authorisation of the municipality for such transfer), the successive public procurement laws passed
have not adopted this approach. However, the terms of tender and specific contracts may contain provisions
requiring prior communication and authorisation for direct or indirect transfers of shares. Additionally, the
public authorities may choose to apply this theory of the Council of State which would require prior
authorisation for direct or indirect changes of control of the concessionaire, even though this is not explicitly
required in the terms of tender, the contract or applicable regulations.
In this regard, in accordance to the Terms of the Tender, the initial ownership of the shares shall coincide with
the shareholding structure proposed by the concessionaire in its bid. Any subsequent change in the shareholding
which implies an increase or decrease equal to or in excess of 1% of such shareholding is subject to prior notice
to the Public Works Ministry (see section of this Offering Circular headed “Description of the Concession
Agreement and the Construction Contract - Concession Agreement - Capital structure”).
Assignment of the concession
The TRLCSP generally contemplates that the concessionaire has the right to assign the concession, provided it
has obtained the authority's prior and express authorisation. In addition, the following requirements shall be met:
(i) the assignor has executed at least 20% of the concession's amount; (ii) the assignee has the capacity to enter
into contracts with a public administration and the solvency required for the concession (and is not prohibited
from entering into the contract); and (iii) the assignment is executed through a public deed.
The terms of tender establish that in the event of assignment of the concession, the minimum stakes in the Issuer
established in the terms of tender - at least 20% of the concessionaire's share capital must be subscribed by
companies which carry out activities related to the construction of road infrastructures, and 20% by companies
which carry out road infrastructure conservation and/or operation activities - shall, in any case, be maintained.
Mortgage of the concession
Pursuant to the TRLCSP, the concessionaire has the right to constitute a mortgage over the concession, subject
to the authority's prior authorisation. It is not possible to constitute a mortgage as a guarantee of debts not
related to the concession. The Issuer has not granted any mortgage under the Concession.
Termination of the concession
Under the current regulatory regime, a concession contract can be terminated under the following circumstances
(see “Description of the Concession Agreement – Early Termination of the Concession Agreement”):
(a) extinguishment of the legal personality of the concessionaire;
(b) court order of insolvency in a "concurso" proceeding or in any other proceeding;
(c) foreclosure proceedings are taken in respect of the concession and either the proceedings fail or there
are no interested third parties;
(d) mutual agreement between the authority and the concessionaire;
(e) seizure of the Concession by the authority for a term exceeding that foreseen in the applicable
regulations;
(f) eight months’ delay in the performance of the terms by the concessionaire or a breach of the term for
commencement of the performance of the contract;
(g) recovery (rescate) of the concession by the authority (recovery includes the unilateral and discretionary
provision by the authority declaring the concession terminated, notwithstanding the concessionaire's
proper fulfilment of its obligations);
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(h) suppression of the service for public interest reasons;
(i) impossibility to exploit the concession under its original terms as a consequence of decisions made by
the authority after the awarding of the concession;
(j) abandonment, withdrawal and non-compliance with essential conditions of the concession;
(k) impossibility of performance of the obligation on the initially agreed terms or certain probability of
causing serious damage to the public interest should the obligation continue to be performed on such
terms, where it is impossible to amend the contract; and
(l) any other circumstances expressly contemplated in the contract.
Termination is not automatic. The authority has to follow a procedure which can generally last between two and
six months. The authority can adopt cautionary measures related to the termination procedure.
The termination of the concession due to any of the above-mentioned causes will be declared by the authority
(ex officio or at the request of the concessionaire). The declaration of insolvency or the opening of the
liquidation phase, as well as the causes referred to in paragraphs (e), (g), (h) and (i) above will always lead to
the termination of the concession. In any other cases, the party who is not responsible for the termination can
decide to ask for the concession's termination.
Mutual agreement can only be a cause for termination when the concession is not under seizure by the authority
due to a serious infringement by the concessionaire, and provided that public interest reasons do not make it
unnecessary or inconvenient. In addition, where mutual agreement is the cause of termination, creditors will
have no control in respect of such termination other than under the terms of any other financing documents.
In the case of merger, prior administrative authorisation is mandatory for the acquirer or remaining company to
continue operating the concession and replace the prior concessionaire in all its rights and obligations. In case of
demerger, contribution or assignment of companies, the concession can only continue with the resulting
company when expressly authorised as so by the authority, taking into account the requirements for the
awarding in relation to the degree of development of the concession at the time any of the referred transactions
takes place.
Liability and compensation for termination of concession contract
In the event of the termination of a concession contract due to breach by the public authority, the authority will be
liable for payment of the loss and damage caused to the concessionaire. Likewise, a termination of the contract
due to the intentional breach by the concessionaire will result in the concessionaire being liable for
indemnifying the authority for the loss and damage caused. Such indemnification will be enforced first against
the performance bond provided by the concessionaire to the public authority.
In general (and unless the terms of tender and concession contract provide otherwise), in the event of an early
termination of a concession, regardless of whether or not such termination is attributable to the concessionaire,
the public authority will pay to the concessionaire an amount representing the investment the concessionaire has
made to develop the concession. In determining the amount of such investment, the amortisation of the
investment will be taken into account according to the time remaining to the expiry of the concession and to the
terms of the economic and financial plan provided by the concessionaire in its bid containing the estimated
economics expected under the concession. Once the pending amount has been determined, the payment has to be made
within six months.
With regard to the termination cause referred to in paragraph (f) of the section "Termination of the concession", above,
the concessionaire can opt between the termination of the concession (with the consequences explained in the next
paragraph) or to be paid the legal interest of the pending amounts (together with the principal), to be counted as from
the date which the payment should have been made or the goods should have been granted.
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With regard to the termination causes referred to in paragraphs (g), (h) and (i) of the section "Termination of the
concession" and without prejudice to what has been stated under the second paragraph above of this section, the
authority will indemnify the concessionaire for all damages suffered. Such damages will include loss of profit,
which will be estimated in accordance with the operating income obtained during the previous five years and the
loss of value of the works and installations that will not revert to the authority, taking into account their degree
of depreciation.
In the case of termination attributable to the concessionaire, the authority will enforce the definitive guarantee
provided by such concessionaire, who will be under an obligation to pay the authority for any damages caused
by its default, in excess of the definitive guarantee.
The authority can also decide the termination of the contracts related to: (i) the use of complementary areas; and
(ii) the commercial exploitation agreements (paying the relevant compensation, that will be assumed by the
concessionaire when the termination cause is attributable to the same). In the case of mutual agreement, the agreement
between the parties will prevail (see “Description of the Concession Agreement – Compensation upon termination
of the Concession Agreement”).
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DESCRIPTION OF THE PROJECT
This overview highlights selected information appearing elsewhere in this Offering Circular. This overview does
not contain all of the information that is important to prospective investors in the Bonds or that prospective
investors should consider in making an investment decision and is qualified in its entirety by, and should be
read in conjunction with, the more detailed information, including information in the Annexes hereto, appearing
elsewhere in this Offering Circular. Prospective investors should carefully consider the information set forth
under "Risk Factors" herein.
General aspects
The Secretary of State for Infrastructure, Transport and Housing of the Public Works Ministry (the Authority)
is the granting authority of the Concession. At the time of the granting of the Concession, the Authority was
known as the Secretary of State for Planning and Infrastructure.
On 24 August 2011, the Authority invited tenders for the Project. The tender announcement was published in
Spain's Official State Gazette (Boletín Oficial del Estado) on 24 August 2011, and subsequently modified by
announcements published on 25 August 2011 and 22 October 2011. In addition, the tender announcement was
published in Europe's Official Gazette on 26 August 2011. The tender announcement was also published in the
contracting platform of the Authority on 23 August 2011.
The opening of the bids took place on 27 October 2011. A consortium made up of Meridiam, Cintra and
Acciona (together, the Consortium) presented its bid on 20 September 2011 and was selected as the preferred
bidder on 18 September 2012. The Issuer, owned by Meridiam (50%), Cintra (25%) and Acciona (25%), was
incorporated on 15 November 2012 under Spanish law, as a special purpose vehicle for the Project.
The members of the Consortium have extensive experience and expertise in delivering both local and
international road construction projects as detailed above. See the section of this Offering Circular headed
"Description of the Issuer-Shareholders".
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The Project involves the construction, maintenance and operation of a 49 km-long new section of the A-66
highway between Benavente and Zamora, Spain (the Road) for a concession period of 30 years starting on 14
December 2012 and ending on 14 December 2042, with construction starting in July 2013 and ending on 11
May 2015 (the Project). The Road is of strategic importance to Spain, forming part of the north-south corridor
(Ruta de la Plata) connecting Cadiz to Gijon and completing the upgrade of the corridor from Gijon to Sevilla.
The Project
The Road is classified as part of the European Union's Trans-European Transport Network (TEN-T), and the A-
66 is categorised as a T2 road, meaning it has expected daily volumes of between 200 to 799 heavy vehicles per
day for 20 years. Traffic forecasts expect low growth with heavy vehicles accounting for 500 vehicles per day,
well within the design specifications. Given the low expected usage of the A-66, the structure of the pavement is
expected to last well beyond 30 years. Under the proposed lifecycle arrangements the pavement will be
resurfaced every eight years. The Project incorporates straightforward structures: five viaducts, 34 overpasses
and 14 underpasses.
The largest structure is the Ricobayo Reservoir Viaduct with twin structures stretching 215 metres, which has
already been completed. Construction is split into three discrete sections:
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Section 1: A6 (Castrogonzalo) to Santovenia del Esla
Section 1 comprises a 14.4 km-long section of road from A-6 heading south to the west of the river Esla and the
N-630. It includes, amongst other things, a new A-6 junction/redesign of Castrogonzalo junction (five
structures), a junction with the N-630 at Villaveza del Agua, a junction with the N-630/ZA-100 roads at
Santovenia del Esla, the relocation of a rest area from km 13 to km 14, and the Prado Ramiro viaduct. It will
include 12 overpasses (plus five A-6 junction structures) and four underpasses.
Section 2: Santovenia del Esla to Fontanillas de Castro
Section 2 comprises a 17.8 km section running parallel to the existing N-630 and passing near the Laguna de
Villafafila. It includes, among other things, a junction with the ZA-123, a junction with the N-630 at Riego del
Camino, a junction with the N-630 at Fontanillas de Castro, a service area on both sides of the highway and
three viaducts (Valdeoso Creek, Laguna Creek, and Riego del Camino Creek). It will include five underpasses
and ten overpasses.
Section 3: Fontanillas de Castro to Zamora
Section 3 comprises a final section of approximately 16.9 km that continues south on the east side of the
existing N-630. It includes, among other things, the south ramps of the junction at Fontanillas de Castro, a
junction with the N-630/N-631, a junction with the N-630 at Montamarta, a connection of the south end of the
project with the existing junction with the N-630 on the outskirts of Zamora and the Ricobayo Viaduct. It will
include five underpasses and seven overpasses.
The Issuer is responsible for expropriation of the Lands for the Project. The Issuer appointed an independent
party, Inserinco, S.L., to give support for the expropriation procedures on its behalf. The Land needed to be
expropriated consisted of 583 hectares split into 864 sections, and is 95% dry land farm land. The Issuer has
reached agreements with 94% of relevant landowners. With respect to the remaining landowners, the Issuer
attained access to the land at the beginning of the construction and administrative expropriation proceedings
related to the fair price of the plots are in their way. Each of the Shareholders of the Issuer has put in place an
Expropriation Letter of Credit with a top tier European bank to cover for what the Issuer estimates to be the
worst case amount that the Issuer might have to pay under these proceedings. Construction of the Project began
in July 2013 and is on schedule. Sections 1, 2 and 3 were completed on 11 May 2015. The total cost of the
Works with the refinancing assumptions amounts to €150,478 million for Area 1 (initial costs), €43,017 million
for Area 2 (Capex) and €54,711 million for Area 3 (maintenance).
Operation and maintenance
Operation and maintenance of the Road are to be managed in-house by the Issuer, with personnel directly
employed by it. The Issuer draws on the long history and experience of the Contractor managing similar projects
in Spain. A team of 25 employees will be employed directly by the Issuer to carry out the operation and
maintenance of the Road. Major maintenance work-streams have been sub-contracted by the Issuer to specialist
contractors through competitive tenders. The Issuer will oversee maintenance from a control depot located at the
N630 Riego del Camino Junction, midway through Section 2 of the Project. A control centre will be staffed 24
hours a day and will receive real time data from patrol vehicles which can also be monitored via GPS. Due to
expected low traffic levels (less than 5000 vehicles per day), all maintenance can be completed through lane
closures and use of a contraflow system planned within the QoS criteria.
Lifecycle expenditure
Pavement forms the largest portion (84%) of the major maintenance capital expenditure, as expected for a
project of this nature. The current plan sees major peaks in 2019-2022, 2027-2030 and 2035-2038 as follows:
- 2019-2022: Replacement of mainline surface and binder course;
- 2027-2030: Complete replacement of surfacing and binder course; and
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- 2035-2038: Mainline surface course replaced with 50% surface course and 50% slurry seal of the
interchanges.
The lifecycle plan will be continuously updated based upon actual observed performance as measured through
ongoing pavement surveys and inspections. Spend profile in the final eight years of the Concession is sized to
meet the hand-back requirements. Regarding provision of the lifecycle, the Issuer intends to sub-contract major
maintenance work which allows, the best price to be secured from the most suitable provider. However, in the
event that the Issuer is unable to secure a sub-contract at an appropriate price, the members of the Consortium
have sufficient expertise to complete this work in-house.
QoS indicators
The QoS indicators are the objective parameters established and determined in order to guarantee that the
different elements of the Road are in a position to satisfy the optimum road and service conditions during the
term of the Concession. All the road sections have to comply with these indicators. Every month, correction
factors for the indicators will be determined, based on the criteria specified in the Concession Agreement. The
Authority is entitled to carry out inspections to verify compliance. The total correction factor will be the result
of the automatic application of all the individual correction factors. Measurements can be reviewed by the
Authority. The final correction factor will be applied to the formula for the calculation of the Availability
Payments as described in the section of this Offering Circular headed "Description of the Concession Agreement
and Construction Contract". In the event that the amount arising from applying the correction factor is less than
the Availability Payment, the difference will be deducted from the following Availability Payment. The
Concession Agreement provides that the Issuer, after having obtained the prior authorisation of the Dirección
General de Carreteras (DGC), is entitled to carry out any necessary actions to improve the quality of the
services and the status of the different Road sections.
Concession Agreement
The concession agreement along with the Terms of Tender relating to the Project was signed by the Authority
and the Issuer on 14 December 2012 (the Concession Agreement) (as further described in the section of this
Offering Circular headed "Description of the Concession Agreement and Construction Contract"). Under the
Concession Agreement, the Issuer will be entitled to receive the Availability Payments which commence from
the date of entry into operation (open to traffic) of the first Road section to be completed by the Issuer until the
end of the Concession. The Availability Payments shall be determined based on the Monthly Fee (as further
described in the section of this Offering Circular headed "Description of the Concession Agreement and
Construction Contract"). As per the Concession Agreement, the base Monthly Fee amounts to €1,889,583.33,
excluding VAT. The Monthly Fee is subject to adjustment in the event that QoS and other availability indicators
are not met. The Monthly Fee is not subject to adjustment based on traffic. The Monthly Fee is the only
payment obligation of the Authority under the Concession Agreement.
Construction Contract
On 31 July 2013, the Issuer entered into a design and build contract (the Construction Contract) with a joint
venture vehicle composed of Acciona Infraestructuras, S.A.U. and Ferrovial Agroman, S.A. (the Contractor)
(as further described in the section of this Offering Circular headed "Description of the Concession Agreement
and Construction Contract – The Construction Contract"). Ferrovial Agroman, S.A. is the primary construction
arm of Grupo Ferrovial, and is an experienced contractor involved in the construction of roads, bridges, airports
and tunnel projects since 1929. It has total annual reviews of €4.3 billion and an order backlog of €8.7 billion
(2012). It is present in over 50 countries with transportation experience including 3,600k km of roads and
14,600 km of roads constructed and 27,000 km of roads maintained and repaired. Acciona was created in 1997
as the result of merging two existing construction companies, "Entrecanales y Távora" and "Cubiertas y
MZOV", both with decades of previous infrastructure asset experience. It currently has an orderbook of €7.2
billion of civil works, with more than 50% in international projects.
47
The purpose of the Construction Contract is to pass from the Issuer to the Contractor the risks, liabilities and
obligations of the Issuer contained in the Concession Agreement which relate to the design, execution and
completion of the works that the Issuer must undertake pursuant to that agreement (the Works) and the
remedying of defects therein. Accordingly, the Construction Contract is back-to-back with the provisions of the
Concession Agreement for the development of the Works and contains a full pass through of the design and
construction risks, liabilities and obligations assumed by the Issuer in the Concession Agreement, subject to
agreed liability caps in certain cases.
48
DESCRIPTION OF THE CONCESSION AGREEMENT AND THE CONSTRUCTION CONTRACT
Concession Agreement
The Concession Agreement, including the Terms of Tender related to the Project, was entered into between the
Authority and the Issuer on 14 December 2012. The Concession Agreement is governed by the provisions of the
LCSP. See the section of this Offering Circular headed "Description of the Regulatory Regime". Under the
Concession Agreement, the Issuer is required to procure the construction, maintenance and operation of a 49
km-long new section of the A-66 highway between Benavente and Zamora for a period of 30 years (the
Concession). Except as otherwise and specifically provided in the Concession Agreement, all costs incurred by
the Issuer in performing its obligations under the Concession Agreement are borne by the Issuer.
The scope of the Concession Agreement includes: (i) the following construction works: first establishment
works, refurbishment, major overhaul, simple repairs, conservation and maintenance; as well as (ii) the
operation of the infrastructure, divided into the following areas:
(a) Area 1: First establishment works;
(b) Area 2: Reposition works and major overhaul which may be required for keeping the infrastructure
suitable for its use during the term of the Concession; and
(c) Area 3: Maintenance of the infrastructure from the moment at which it is put into service after the first
establishment works are finished. These works will be carried out during the term of the Concession.
Term of the Concession Agreement
The Concession Agreement will terminate on the date (the End Date) falling 30 years after the execution date
of the Concession Agreement. The End Date will be on 14 December 2042, unless the Concession Agreement is
terminated earlier in accordance with its terms. The term may be suspended due to a force majeure event that
breaks the economic balance of the Concession Agreement. In this sense, the term of the Concession Agreement
may only be extended as a consequence of restoring the economic balance of the Concession Agreement.
Concession Performance Bond
The Issuer was required to post a performance bond for the benefit of the Authority within ten business days of
receiving the notification of the Authority requiring the bond, for an amount equal to five per cent (5%) of the
estimated value of the Concession Agreement to secure its obligations under the Concession Agreement (the
Concession Performance Bond). The Concession Performance Bond was issued by Banco Popular Español,
S.A. on 12 December 2012 to guarantee the obligations of the Issuer for a maximum amount of €13,356,496. In
addition, the Issuer’s shareholders have granted counterguarantee (contra aval), in proportion to their interest in
the Issuer’s capital, without recourse to the Issuer, for the benefit of Banco Popular Español, S.A.
Once the Works have started and during the period provided for its development, the Concession Performance
Bond may be reduced gradually and inversely proportional to the remaining term of the Concession Agreement
until it amounts to two per cent (2%) of the estimated value of the Concession Agreement by the End Date of
the Concession. To effectively implement this reduction, the Issuer must make a request to the Authority, who
may accept it, subject to the favourable report of the construction and/or development inspector (Inspector de
Construcción y/o Explotación).
If, as a consequence of the modification of the Concession Agreement, its value is varied, the Concession
Performance Bond shall be readjusted so as to remain proportional to the value of the Concession Agreement.
Obligations of the Issuer
Under the Concession Agreement, the principal obligations of the Issuer include (but are not limited to):
49
(a) responsibility for the construction, maintenance and operation of the Road, including a general duty to
maintain and repair the Road following the execution date of the Concession Agreement;
(b) responsibility for the security of the sites related to the Concession (the Sites) and all actions of
protestors and trespassers from the date of execution of the Concession Agreement until its
termination;
(c) in carrying out its obligations, complying with, among other things, applicable legislation, all relevant
taxes, guidance and directions, all orders, notices and consents, and the approved programmes by the
Authority, at its own cost;
(d) responsibility for obtaining all necessary permits, licences and authorisations required for the
development of the Concession, at its own cost;
(e) liability for any compensation due in case of damages to third parties caused as a consequence of the
development of the Concession provided that such damages are attributable to the Issuer (not derived
from a direct order of the Authority);
(f) delivery to the Authority, at the end of the term of the Concession Agreement, of the Road and all the
ancillary facilities in perfect condition so as to permit the continuity of the services; and
(g) maintenance of suitable insurance coverage throughout the term of the Concession Agreement (any
amendment to the insurances is subject to prior authorisation by the Authority), including:
(i) contractors’ "all risks" insurance;
(ii) accident cover insurance;
(iii) civil liability insurance for professional risks; and
(iv) property damage insurance.
Unless expressly stated otherwise in the Concession Agreement, the Issuer assumes all risks and responsibilities
for compliance with the above obligations, and any other obligations imposed upon it under the Concession
Agreement, at its own cost. The Authority will not assume any risks from the operation and the alteration of the
transport networks by the Spanish State and any other public administration.
Obligations of the Authority
Under the Concession Agreement, the Authority will have the following principal obligations:
(a) to restore the economic balance of the Concession Agreement for "reasons of public interest" and for
other justified grounds (such as force majeure). The following measures can be used to achieve the
rebalancing: (i) in certain circumstances, amending the term of the Concession Agreement (however,
this would be subject to the maximum legal term for the Concession); and (ii) amending the clauses
that contain the substantive economic terms of the Concession Agreement; and
(b) to not require compensation if the Issuer fails to comply with its obligations under the Concession
Agreement when such failure is caused by an event directly attributable to the Authority or by force
majeure, and only when the faulty compliance is not caused by a negligent act or as a consequence of
an event that should have been foreseen by the Issuer.
An economic rebalance will not apply to: (i) additional lifecycle/maintenance costs relating to sections of the
Road not included in the original scope provided they are no more than 2% of the lifecycle/maintenance costs
expected to be incurred, (ii) changes to lifecycle/maintenance required to maintain the initial works and (iii)
alterations to the local or regional network.
Modifications of the Concession
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The Concession can only be modified for public interest reasons in accordance with the terms foreseen in the
LCSP (see “Description of Regulatory Regime – Modifications of the concession”). The Concessionaire is
obliged to comply with the modifications imposed by the Authority.
Remuneration of the Issuer
The Issuer will be entitled to receive monthly payments (Availability Payments) which commence from the
date of entry into operation (open to traffic) of the first Road section to be completed by the Issuer until the end
of the Concession. The Availability Payments from the Authority are calculated according to the service quality
and availability of each of the different Road sections to be developed under the Concession Agreement (the
Monthly Fee). As per the Concession Agreement, the base Monthly Fee amounts to €1,889,583.33, excluding
VAT.
There will be no additional payments from the Authority during the operational phase.
The Availability Payments are calculated by reference to the Monthly Fee. The Monthly Fee is amended in
relation to the status of the Road sections and the service quality. In this respect, QoS indicators (26 indicators in
total) and availability of Road sections will be determined monthly according to the technical specifications of
the Concession Agreement. The Authority may carry out any verification it deems appropriate and, in the event
it finds any discrepancy between such indicators and the works performed by the Issuer, the Authority will bring
the issue to the development inspector (Inspector de Explotación) who will decide if the Monthly Fee should be
adjusted (only reduced, not increased).
Updating the Monthly Fee
The Monthly Fee will be updated in accordance with 85% of the variation of the Consumer Price Index (CPI),
as published by the Spanish National Statistics Institute, as explained below:
(a) The first update will take place after 20% of the Works have been completed provided that a year has
elapsed as from the entry into service of every road section or sub-section that give rise to a right to
receive the Availability Payment. Such update will be calculated using the following formula: Cmps1 =
Cmps0 * KR
Where:
Cmps0 = Monthly fee for providing the service from the bidCmps1 = Monthly fee for providing the service from the bid updated with CPIKr= Adjustment coefficient
K� = 0.85CPI�CPI�
+ 0.15
Where:
CPI0=Base CPI for the month when the Concession is awarded or three months after the date bids are submitted
if the Concession was awarded after said three months after the submission.
CPIi =CPI for the first month in which the fee is to be updated.
(b) The following updates will take place every 1 January of the following Concession years, based on the
definitive CPI, as published in December of the prior year. The Monthly Fee shall be calculated using
the following formula:
����� = ����� ∗ K�
Where:
Cmpsi = Monthly Fee from the bid updated on iCmps0 = Monthly Fee from the bid
51
Kr= Adjustment coefficient
�� = 0.85CPI�CPI�
+ 0.15
CIP0= CPI for the month when the Concession is awarded or three months after the date bids are submitted if
the Concession was awarded after said three months after the submission.
CIP1= CPI published in the December before the update.
(c) The updating procedure must adhere to the following formalities:
(i) once the update has been requested from the Issuer, the Authority shall, based on the proposal
by the DGC, approve the new monthly fee for providing the service; and
(ii) as long as a new monthly service fee has not been approved, the previous fee shall remain in
force. Once it has been approved by the Authority, the pending fee shall be subsequently
regularised.
In any case, the updated amounts of the Monthly Fee shall be expressed in euro to two decimal places, not
including value added tax. The Issuer shall submit to the Authority, before the 10th day of each month, the
corresponding invoice along with its calculation of the Monthly Fee to be paid. Payments are expected to be
received within the following 30 days.
Calculation of the Availability Payments
The Availability Payments shall be determined based on the Monthly Fee as previously described. The
Availability Payment (Cm) shall be the result of multiplying the Monthly Fee by the Ft adjustment coefficient by
state indicators and service quality and by the percentage of investment in the construction works for Area 1
launched into service in the quarter prior to the Concession (%Area1), expressed as a decimal.
�� = C���xFtx%Area1
100
The amount of the Monthly Fee shall be the amount corresponding to the updated bids as stipulated above. The
investment percentage in Area 1 in service at the end of the quarter preceding the Concession shall be calculated
using the budgets for each task for Area 1 included in the Issuer's bid.
The Ft coefficient shall be calculated by periodically evaluating the quality level in compliance with the
indicators specified in Appendix 7 of the Concession Agreement as objective standards that correlate to the
quality level and the amount the Issuer should be paid.
Early termination of the Concession Agreement
According to the LCSP, there are a number of early termination events which entitle the parties to terminate the
Concession Agreement, including the following:
(a) extinguishment of the legal personality of the Issuer;
(b) court order of insolvency in a "concurso" proceeding or in any other proceeding;
(c) foreclosure proceedings are taken in respect of the Concession and either the proceedings fail or there
are no interested third parties;
(d) mutual agreement between the Authority and the Issuer;
(e) seizure of the Concession by the authority for a term exceeding that foreseen in the applicable
regulations;
(f) eight months’ delay in the performance of the terms by the Issuer or a breach of the term for
commencement of the performance of the Concession Agreement;
52
(g) recovery (rescate) of the Concession by the Authority (recovery includes the unilateral and
discretionary provision by the Authority declaring the Concession terminated, notwithstanding the
Issuer’s proper fulfilment of its obligations);
(h) suppression of the service for public interest reasons;
(i) impossibility to exploit the Concession under its original terms as a consequence of decisions made by
the Authority after the awarding of the Concession;
(j) abandonment, withdrawal and non-compliance with essential conditions of the Concession; and
(k) impossibility of performance of the obligation on the initially agreed terms or certain probability of
causing serious damage to the public interest should the obligation continue to be performed on such
terms, where it is impossible to amend the Concession Agreement.
Also, the Terms of Tender refers as an early termination event the failure to have all the technical and human
resources (fully operative and never below those offered) to restore and keep the road in safety conditions, even
when a force majeure event has taken place.
The termination is not automatic and the Authority has to follow a procedure to terminate. The Concession
Agreement provides that, on early termination of the Concession Agreement, compensation shall be payable, as
set out below.
Compensation upon termination of the Concession Agreement
In cases of termination, for whatever reason, the Authority shall pay the Issuer the amount (importe) of
investment made in relation to the expropriation of Land, the execution of construction Works and acquisition of
property required for the operation of the Concession. To that effect, the level of depreciation in relation to the
remaining time before the termination of the Concession and the provisions of the economic and financial plan
shall be taken into account. The compensation to be paid shall be determined within six months.
The concept of compensation for the amount of the investment is not defined in the regulatory framework
applicable to the Project, nor does the regulatory framework establish a methodology for determining it. In an
early termination scenario, the Issuer expects that the Authority would determine the early termination payment
by reference to the economic and financial plan which makes reference to the financial statements of the Issuer.
However, absent any guidelines, there can be no assurances as to how the calculations for determining the early
termination payment shall be carried out by the Authority. One approach would be for the early termination
payment to be determined by reference to the book value of the assets as they appear in the Issuer's financial
statements, but a more conservative calculation would also be possible (whereby the book value of the assets is
estimated with a different account and depreciation method to that used by the Issuer).
In case of termination for reasons attributable to the Authority, the Authority shall also compensate the Issuer
for any damages caused to it. In order to determine the amount of compensation due, in accordance with the
law, the future profits that the Issuer will fail to receive should be taken into account, based on operating results
of the last five years where possible, and the loss of value of the works and installations that shall not be
delivered to the Authority, considering the level of depreciation, but there are no specific guidelines determined
by the law or Spanish Supreme Court decisions.
If the Concession Agreement is terminated for reasons attributable to the Issuer, the Concession Performance
Bond shall be enforced and the Issuer shall indemnify the Authority for any damages incurred in excess of the
amount obtained from the enforcement of the Concession Performance Bond.
In case of events of force majeure that result in the termination of the Concession Agreement, the Authority
shall compensate the Issuer for the works already carried out and the higher cost which the Issuer has incurred
as a result of the indebtedness with third parties.
53
The Authority's estimate of amounts payable to the Issuer upon early termination may be less than the Issuer's
estimate which could result in the Issuer receiving insufficient funds to satisfy its payment obligations under a
mandatory early redemption scenario. Under applicable law, the Authority is empowered to make the final
determination of the amount payable to the Issuer and, as a result, the amounts payable by the Authority upon
early termination may not be sufficient or sufficiently timely, to enable the Issuer to meet its payment
obligations under the Bonds on a timely basis.
Seizure of the Concession
The Authority may seize the Concession when the Issuer cannot temporarily, with serious risk to safety, comply
with its obligations under the Concession Agreement to operate and maintain the Concession or when there is a
serious breach of the Issuer's obligations which would endanger the operation and maintenance of the
Concession. The Authority shall notify the Issuer about its intentions to seize the Concession, stating the
infringements committed and giving the Issuer a specified period to rectify the infringement. If the Issuer does
not correct its infringement within the specified period, the Authority shall seize the Concession. All costs of the
seizure will be charged to the Issuer, including any penalties incurred and damages caused.
After seizing the Concession, the Authority would be in charge of the development of the Concession and will
have the right to receive the compensation established under the Concession Agreement. The Authority may use
the same personnel and equipment of the Issuer and would appoint one or more auditors to replace fully or
partially the management board of the Issuer. The Issuer would still assume all risks related to the operation of
the Concession. At the seizure's end, the Authority will return to the Issuer any outstanding amount remaining
after satisfying all payments due related to any and all expenses and penalties imposed and damages caused, if
any.
Seizure of the Concession by the Authority shall be temporary and shall not exceed a term of three years. The
Authority may then decide by itself or by request of the Issuer to return control over the Concession if the
deficiencies caused by the Issuer have been corrected and the Issuer proves to be capable of continuing with the
operation of the Concession at the appropriate standard. If the Issuer fails to fully comply with its obligations
after the term established by the Authority for the seizure of the Concession, the Authority shall terminate the
Concession Agreement.
Liability
The Issuer shall indemnify for all damages caused to third parties as a result of the development of its
obligations under the Concession Agreement. If such damages have been caused as an immediate and direct
consequence of an order of the Authority, the Authority may be liable under Spanish law.
The Authority is responsible for any damages caused to third parties as a result of defects found in the reports
prepared by the Authority in relation to the construction Works of the Concession.
Penalties Regime
The Issuer's infringements may lead to the imposition of penalties:
(a) minor infringements (excluding service quality indicators) – fines of up to €100,000 (as of January
2011);
(b) serious infringements (excluding service quality indicators) – fines from €100,000 to €500,000 (as of
January 2011); and
(c) minor/serious infringements regarding service quality indicators – fines up to the same amount to that
affecting the Monthly Fee.
The penalties to be imposed during the construction phase cannot exceed 10% of the investment in Area 1
works. During the exploitation phase, the penalties to be imposed cannot exceed 20% of the income obtained for
54
the operation of the road during the prior year. If such limits are exceeded, the Authority will terminate the
Concession Agreement. The 20% limit applies to all penalties and is separate from the readjustments to the
Monthly Fee.
Economic and Financial Plan for the Concession
The Issuer in the tender process was required to submit a preliminary economic and financial plan for the
Concession in accordance with clause 14.4.1 of the Terms of Tender together with its bid. This plan includes a
detailed description of the sources for financing the Concession, both with regard to their own resources and
third party funding. In accordance with clause 64 of the Terms of Tender, the Issuer has three months from the
day following the approval of the last Area 1 project for the submission of the definitive economic and financial
plan which will govern the Concession. This plan must correspond to the one submitted with the bid and in no
event may provisions be introduced that vary what is stated in the preliminary economic and financial plan if
these variations may result in a prejudice to the Authority.
In any case, the Issuer shall guarantee and justify in the economic and financial plan that, in the period elapsing
between the subscription of the Concession and the fulfilment of the envisaged investment, it will have the
necessary resources for the construction and exploitation of the Works (by means of a bridge loan or a
contribution of additional own resources from the Issuer).
The economic and financial plan must be approved by the Authority within 2 months and will be incorporated
into the Concession. The implementation term will be the one stated in the economic and financial plan and
cannot exceed 3 months from the aforementioned approval. The economic and financial plan shall be considered
fully implemented once all the relevant contracts contemplated in it have been entered into by the parties.
Capital Structure
The capital structure of the Issuer is mainly regulated in clause 23.2 of the Terms of Tender. In accordance with
such clause, the share capital of the Issuer shall be at least equal to the 20% of the total initial investment. At the
time of the constitution of the Issuer, the share capital shall be (i) entirely subscribed, and (ii) at least 25% shall
be paid-up. The total share capital shall be paid within two years of the Issuer being constituted in one or more
payments. The share capital may not be reduced without the corresponding authorisation by the Authority.
The Construction Contract
The Construction Contract was entered into on 31 July 2013 by the Issuer and the Contractor. It is governed by
Spanish law. Under Spanish law, a "Unión Temporal de Empresas" or joint venture vehicle (a JVV) is a
temporary (commercial) association whose partners are jointly and severally liable for the JVV's obligations.
The purpose of the Construction Contract is to pass from the Issuer to the Contractor those risks, liabilities and
obligations of the Issuer contained in the Concession Agreement which relate to the execution of the Works and
the remedying of defects therein. Accordingly, the Construction Contract is back-to-back with the provisions of
the Concession Agreement for the development of the Works and contains a full pass through of the design and
construction risks, liabilities and obligations assumed by the Issuer in the Concession Agreement, subject, save
some exceptions, to agreed liability caps.
The Construction Contract is a lump sum, turnkey contract, which provides for:
(a) a fixed, non-revisable price; and
(b) a fixed delivery period.
Term
The Works had to be completed within 22 and 24 months, depending on the Road section, and according to the
timeline attached to the Construction Contract, from the date of issuance of the Start-up Certificate (Acta de
Comprobación de Replanteo) on 11 July 2013. These terms are measured until the issuance of the Completion
55
Certificate (Acta de Comprobación de las Obras). In any event, Works had to be finished within 29 months and
31 months, depending on the Road section, from the execution date of the Concession Agreement.
Finally, the Works for all Road sections were completed on 11 May 2015.
Bonding requirements
The obligations of the Contractor under the Construction Contract are secured by one or more bonds that are
payable on first demand to the Issuer (the Construction Performance Bonds).
The Construction Performance Bonds have been issued as follows:
(a) 2 performance bonds for an amount equal to €3,594,114 each in favour of the Issuer, issued by Banco
Santander, S.A. on 7 and 8 August 2013, respectively, to guarantee the obligations of the advance
payments given by the Issuer to the Contractor. This performance bond mirrors the Concession
Performance Bond; and
(b) 2 performance bonds for an amount equal to €10,999,842 each issued by Banco Bilbao Vizcaya
Argentaria, S.A. on 31 July 2013 and 1 August 2013, respectively, to guarantee the obligations of the
Contractor under the Construction Contract.
Contractor's Obligations
The Contractor is required to design, execute and complete the Works, and remedy defects therein, in
accordance with the Construction Contract. The Contractor is also required to obtain and maintain all insurance
policies requested by the Issuer in relation to the Works. In particular, the Contractor will have to obtain and
maintain the following insurance policies:
(a) an all risk works' insurance policy covering risks for a total amount of €148,204,555.43. Such
insurance policy will include two additional insurance policies:
(i) a civil liability risks insurance policy covering risks for a total amount of €3,000,000; and
(ii) an advance loss of profit insurance policy covering risks for a total amount of €20,785,416.67;
(b) an accident insurance policy covering risks during the term of the Construction Contract with the
following conditions:
(i) the persons covered under the insurance policy shall be technical experts from the Authority;
and
(ii) risks will be covered for a total amount of €600,000.
The Construction Contract contemplates the execution of Works, and payment for such Works, in accordance
with "milestones" or "phases".
Construction Price
In consideration of the performance by the Contractor of its obligations under the Construction Contract, the
Issuer agrees to pay the Contractor a fixed design and build price. The aggregate consideration for the Works is
€146,664,553, plus VAT (the Construction Price).
The Construction Price is payable in monthly instalments against the achievement of pre-agreed milestones. The
monthly invoice for payment is based on the value of the Works carried out by the Contractor during the
preceding month and shall show the basis upon which the monthly invoice is calculated.
The Construction Price has already been paid.
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Back-to-Back Principle
The underlying principle of the Construction Contract is that the Contractor assumes under the Construction
Contract all the risks, liabilities and obligations of the Issuer under the Concession Agreement which relate to
the design, execution and completion of the Works and the remedying of defects therein as well as all other
obligations explicitly expressed to be assumed by the Contractor under the Construction Contract, subject, save
some exceptions, to agreed liability caps.
The Contractor will only be entitled under the Construction Contract to obtain the same additional payment,
indemnification, extension of time or other relief or benefit as the Issuer receives under the Concession
Agreement, to the extent it relates to the Works or affects the rights and obligations of the Contractor under the
Construction Contract.
Defects liability
The Contractor is liable to the Issuer for any penalties or deductions to the Issuer regarding the Availability
Payment imposed by the Authority due to any defects in the Works. Liability of the Contractor under this
circumstance is not subject to any liability cap as explained below.
The Contractor is responsible for remedying any defects in the Works.
Contractor's Default
In the event of a breach by the Contractor of its obligations under the Construction Contract, the Issuer's rights
include, among others:
(a) claiming compensation; or
(b) enforcing the Construction Performance Bonds (through the Security Agent as established in the Direct
Agreement).
Penalties and Limitation of liability
The Contractor's aggregate liability under the Construction Contract to the Issuer is subject to a maximum cap
of 45% of the Construction Price.
The maximum cap of 45% does not apply: (i) in any case of fraud, negligence or wilful misconduct by the
Contractor; (ii) if such limitation of liability is expressly prohibited by applicable law; (iii) in case of any
complaint by a third party or the Authority in relation to the Works for reasons attributable to the Contractor;
(iv) in case of damages and prejudices (daños y perjuicios), sanctions or penalties imposed by the Authority to
the Issuer in case of latent defects in the Works for reasons attributable to the Contractor; or (v) to any moneys
paid by the insurance companies which are not destined to repair the Works and those amounts not paid by the
insurance companies as a consequence of the Contractor failing to meet the requirements needed to claim for the
insurance compensation.
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SELECTED HISTORICAL FINANCIAL INFORMATION
The tables set forth below, for the periods indicated, selected information derived from the audited financial
statements of the Issuer for the years ending 31 December 2013 and 31 December 2014 (together the Financial
Statements). The selected historical financial information set forth below should be read in conjunction with the
auditor's reports, Financial Statements and notes thereto of the Issuer contained in the Annexes 1 and 2 to this
Offering Circular. The information below is not necessarily indicative of the results of future operations.
Summary of audited financial information for the years ending 31 December 2013 and 31 December 2014
Basis of Preparation and Accounting Policies
The audited Financial Statements of the Issuer for the relevant periods were prepared in accordance with the
Spanish GAAP.
For the purposes of the summary of audited financial information, the accounting policies applied are those as
set out in the Note 3 of the Financial Statements of the Issuer included in Annex 1 and Annex 2 to this Offering
Circular.
Income Statement Information
The table below shows a summary of the historic income audited statement for the years ending 31 December
2013 and 31 December 2014:
Amounts in € thousands(audited)
2013 2014
Net Sales 46,839.3 106,926.4
Other Revenue 3.1 0.2
Cost of Sales (31,710.5) (90,650.0)
Personnel expenses (137.0) (139.0)
Other operating expenses (12,756.0) (3,836.2)
Depreciation and amortisation (1.3) (3.0)
Other non-deductible expenses - 22.1
Operating income 2,238.2 12,277.0
Financial income 22.1 16.0
Financial expenses (494.5) (4,491.0)
Consolidated income before tax 1,766.0 7,801.3
Income taxes (530.0) (2,347.1)
Net income 1,236.0 5,454.3
Source: audited financial statements included in Annex 1 and Annex 2 to this Offering Circular.
Balance Sheet Information
The table below shows a summary of the historic balance sheet audited for the years ending 31 December 2013
and 31 December 2014:
Amounts in € thousands(audited)
2013 2014
Non-current assets 49,738.2 158,784.0
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Current assets 1,017.0 4,468.0
Total assets 50,755.0 163,252.0
Equity 9,508.1 38,165.0
Non-current liabilities 31,319.5 123,800.0
Current liabilities 9,927.4 1,287.4
Total liabilities 50,755.0 163,252.0
Source: audited financial statements included in Annex 1 and Annex 2 to this Offering Circular.
Cash Flow Information
The table below shows a summary of the audited statement of cash flow for the two years ending 31 December
2013 and 31 December 2014:
Amounts in € thousands(audited)
2013 2014
Cash used in operating activities (43,329.0) (112,329.0)
Cash generated from financing
activities35,132.0 115,962.4
Net (decrease)/increase in cash and cash
equivalents(8,206.5) 3,626.0
Source: audited financial statements included in Annex 1 and Annex 2 to this Offering Circular.
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SUMMARY OF THE FINANCE DOCUMENTS
Security Trust and Subordination Deed
The Issuer, the Shareholders, the Security Agent, the Bond Trustee, the Agent and the Account Bank have
entered into the English law governed Security Trust and Subordination Deed on the Closing Date. The Security
Trust and Subordination Deed, among other things, governs the relationships and rights and obligations among
the Shareholders and the Secured Creditors (as described below), including, without limitation, the ranking of
their claims against the Issuer, the enforcement of the Security and the turnover of proceeds received by the
Shareholders or the Secured Creditors and application of such proceeds and proceeds from an enforcement of
the Security by the Security Agent.
Prior to the Final Discharge Date, the Shareholders may not take certain enforcement action in respect of the
Shareholder Liabilities unless the Security Agent has agreed.
The Security Trust and Subordination Deed contains provisions in respect of the Security Agent's holding of the
Security on behalf of the Secured Creditors, by way of a parallel debt mechanism whereby the Issuer agrees to
pay the Security Agent, as an independent and separate creditor, an amount equal to the amount which it owes to
a Secured Creditor (including the Security Agent) under or in connection and in accordance with the Finance
Documents.
All amounts received or recovered by the Security Agent pursuant to the terms of the Shareholder Documents
and the Finance Documents or in connection with the realisation or enforcement of the Security are to be
applied by the Security Agent in accordance with the Post-Enforcement Priority of Payments (See "Transaction
Overview – Post-Enforcement Priorities of Payments" above).
Account Bank Agreement
The Finance Documents require the Issuer to operate the Accounts in accordance with the English law governed
Account Bank Agreement between the Issuer, the Account Bank, the Bond Trustee and the Security Agent.
Under the Account Bank Agreement, the Issuer appoints Banco Bilbao Vizcaya Argentaria, S.A. as the Account
Bank and must maintain the General Account, Debt Service Reserve Account, Maintenance Reserve Account,
Insurance and Disposal Proceeds Account and (if opened) the Expropriation Reserve Account, in the name of
the Issuer at the Account Bank.
All amounts payable to or receivable by the Issuer including but not limited to income from the Project must be
promptly paid into the General Account, subject to certain exceptions including in the case of amounts required
to be paid into other Project Accounts.
The Issuer may only withdraw from the General Account for the purposes and in the order specified in the
Account Bank Agreement. For more details on this payment waterfall, see "Transaction Overview – Pre-
Enforcement Priorities of Payment" above.
Bond Trust Deed
The Issuer and Bond Trustee have entered into an English law governed Bond Trust Deed on the Closing Date
under which, among other things, the Bonds were constituted and the Issuer's covenant to the Bond Trustee
(which holds the benefit of the covenant on trust for the Bondholders) to pay the principal and interest on the
Bonds in accordance with the Conditions is provided for.
Agency Agreement
Pursuant to the Agency Agreement entered into between the Issuer, the Bond Trustee and the Agent on the
Closing Date, provision has been made for, among other things, payment of principal and interest in respect of
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the Bonds. The Agency Agreement (and any non-contractual obligations arising out of or in connection with it)
is governed by English law.
Direct Agreement
The Contractor, the Issuer and the Security Agent (acting in its own name and in the name and on behalf of the
Secured Creditors) have entered into a direct agreement, governed by Spanish law, under which the Contractor
assumes certain responsibilities in favour of the Secured Creditors with the aim of mitigating the potential
construction risks related to the Works. The Direct Agreement replaces the former direct agreement entered into
between the Contractor, the Issuer and certain financial entities on 31 July 2013 and amends several clauses of
the Construction Contract described in the section of this Offering Circular headed "Description of the
Concession Agreement and the Construction Contract" to adapt it to the issue of the Bonds and financing of the
Project.
Under the Direct Agreement, the Contractor and the Issuer shall not amend, desist from their rights and
obligations and/or subrogate a third party in their contractual position under the Construction Contract without
the prior written consent of the Security Agent, except if such amendments are mandatorily requested by the
Authority. The Contractor shall notify the Issuer, the Security Agent and the Technical Adviser of any event that
may entitle the Contractor to terminate the Construction Contract early. In this case a negotiation period and a
restructuring plan process will be opened.
The Direct Agreement shall remain in force as long as the obligations of the Contractor under the Construction
Contract are outstanding.
Initial Security Documents
On the Closing Date, the following Initial Security Documents have been granted:
(a) a Spanish law deed (póliza) of a first ranking non-possessory pledge granted by the Issuer over the
credit rights, present and future, arising in its favour from: (i) the Project Documents, (ii) certain
Insurances with regard to the Project, (iii) and any letter of credit (avales) granted with regards to the
Project, including the Expropriation Letters of Credit and the Construction Performance Bonds,
attested by the Notary Public of Madrid, Mr. Javier Navarro-Rubio Serres;
(b) a Spanish law deed (póliza) of a first ranking pledge granted by the Issuer over the credit rights arising
in its favour from the Project Accounts, attested by the Notary Public of Madrid, Mr. Javier Navarro-
Rubio Serres; and
(c) a Spanish law deed (póliza) of a first ranking pledge granted by the Shareholders over the Issuer's share
capital, attested by the Notary Public of Madrid, Mr. Javier Navarro-Rubio Serres.
As indicated in the section of this Offering Circular “Risks Factors – Risk Factors Relating to the Security” the
validity and effectiveness of such documents are subject to the fulfilment of a condition subsequent (condición
suspensiva) and completion of certain perfection requirements.
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TERMS AND CONDITIONS OF THE BONDS
The following are the terms and conditions of the Bonds (the Conditions, which expression means, in relation to
the Bonds, these terms and conditions endorsed on or incorporated by reference into the Bond or Bonds, as
from time to time modified in accordance with the provisions of the Trust Deed),
The €184,500,000 3.169 per cent. senior bonds, to be secured as provided for in Condition 3 (Security), due 31
December 2041 (the Bonds, which expression, unless the context otherwise requires, includes any Further
Bonds) of Sociedad Concesionaria Autovía de la Plata, S.A., a company incorporated under the laws of the
Kingdom of Spain, with tax identification number A-86591278 (the Issuer) are constituted by a trust deed (the
Trust Deed) entered into on 27 May 2015 by the Issuer and BNP Paribas Trust Corporation UK Limited, a
limited liability company incorporated under the laws of England and Wales with registered number 04042668
and whose registered office is, as at the Closing Date, at 55 Moorgate, London EC2R 6PA, United Kingdom, as
trustee for the Bondholders (in such capacity, the Bond Trustee) and represented in uncertificated,
dematerialised book-entry form in Iberclear. Pursuant to article 6 of the Law 24/1988, of 28 July, on the
Securities Market, the Issuer has filed the private issuance document (documento privado de emisión) with the
CNMV and Iberclear, which describes the terms and conditions of the Bonds.
The obligations to pay all amounts owing in respect of the Bonds will be secured pursuant to the Security
Documents. The Security to be constituted by the Security Documents will be held by BNP Paribas Trust
Corporation UK Limited, a company incorporated under the laws of England and Wales with registered number
04042668 and whose registered office is, as at the Closing Date, at 55 Moorgate, London EC2R 6PA, United
Kingdom, as security agent for the Bondholders and the other Secured Creditors (in such capacity, the Security
Agent). The Security Agent is appointed to act in such capacity under the security trust and subordination deed
(the Security Trust and Subordination Deed) entered into on 27 May 2015 by, among others, the Issuer, the
Bond Trustee and the Security Agent. The Security Agent has agreed in the Security Trust and Subordination
Deed to have the benefit of and to be bound by the terms of these Conditions.
Under an agency agreement (the Agency Agreement) entered into on 27 May 2015 by, among others, the Issuer
and Banco Bilbao Vizcaya Argentaria, S.A., a company incorporated under the laws of Spain, whose registered
office is, as at the Closing Date, at C/Sauceda 28, Ed. Oceanía 1ª Planta, 28050 Madrid, as agent (in such
capacity, the Agent), provision is made for the payment of principal, premium (if any) and interest in respect of
the Bonds.
The statements in these Conditions include summaries of, and are subject to, the detailed provisions of and
definitions in the Finance Documents. Copies of the Finance Documents are available for inspection by prior
appointment during normal business hours by the Bondholders at the registered office of the Agent.
The Bondholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions
of the Finance Documents applicable to them.
The issue of the Bonds was authorised by resolutions of the shareholders' general meeting and the board of
directors of the Issuer passed on 28April 2015 and 28April 2015, respectively.
1. FORM, DENOMINATION AND STATUS
1.1 Form and denomination
The Bonds are in uncertificated, dematerialised book-entry form (anotaciones en cuenta) in euro in an
aggregate nominal amount of €184,500,000 and denominations of €100,000.
1.2 Status of the Bonds
The Bonds constitute direct, senior and unconditional obligations of the Issuer, to be secured on a first
priority basis as contemplated in Condition 3 (Security), and upon insolvency of the Issuer will rank
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pari passu among themselves (unless, with respect to a Bondholder, the Bonds qualify as subordinated
claims pursuant to article 92 and subsequent to Law 22/2003 (Ley Concursal) of 9 July 2003, as
amended, and save for such obligations that may be preferred by provisions of law that are mandatory
and of general application).
1.3 ISIN Code
The Spanish National Numbering Agency (Agencia Nacional de Codificación de Valores Mobiliarios)
has assigned the following ISIN to the Bonds: ES0205068002.
2. REGISTER, TITLE AND TRANSFERS
2.1 Registration, clearing and settlement
The Bonds are registered with the Spanish Sociedad de Gestión de los Sistemas de Registro,
Compensación y Liquidación de Valores, S.A. Unipersonal, with its registered address at Plaza de la
Lealtad, 1, Madrid (Iberclear) as managing entity of the central registry of the Spanish clearing and
settlement system (Iberclear) that records all aggregate securities balances for each of its participating
entities (entidades participantes) (the Iberclear Members). Each Bondholder's title to the
corresponding principal amount of the Bonds is set out in the registries maintained by the respective
Iberclear Member or Iberclear itself if the Bondholder is an Iberclear Member.
Investors in the Bonds who do not have, directly or indirectly through their custodians, a participating
account with Iberclear may participate in the Bonds through bridge accounts maintained by each of
Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme, Luxembourg
(Clearstream, Luxembourg) with Iberclear.
2.2 Title
In accordance with Article 15 of Royal Decree Law 116/1992 of 14 February on the representation of
securities through book entries and clearing and settlement of securities transactions (Real Decreto
116/1992, de 14 de febrero, sobre representación de valores por medio de anotaciones en cuenta y
compensación y liquidación de operaciones bursátiles) (RD 116/1992), each person shown in the
registries maintained by the respective Iberclear Members or Iberclear itself if the Bondholder is an
Iberclear Member, as being a holder of Bonds, shall be considered the holder of the principal amount of
the Bonds recorded therein and Bondholder shall be construed accordingly.
One or more certificates (each a Certificate) attesting to the relevant Bondholder's holding of the
Bonds in the relevant registry will be delivered by the relevant Iberclear Member or, where the
Bondholder is itself an Iberclear Member, by Iberclear (in each case, in accordance with the
requirements of Spanish law and the relevant Iberclear Member's or, as the case may be, Iberclear's
procedures) to such Bondholder upon such Bondholder's request.
Each Bondholder will be treated by the Issuer, Bond Trustee, Security Agent and Agent (except as
otherwise required by Spanish law) as the legitimate owner of the relevant Bonds for all purposes
(whether or not it is overdue and regardless of any notice of ownership, trust or any interest or
annotation of, or the theft or loss of, the Certificate issued in respect of it).
2.3 Transfers
The Bonds are issued without any restrictions on their transferability. In accordance with Article 12 of
RD 116/1992, title to securities represented through book entries (as is the case with regard to the
Bonds) may pass through book transfer. Consequently, the Bonds may be transferred and title to the
Bonds may pass (subject to Spanish law and compliance with all applicable rules, restrictions and
requirements of Iberclear or, as the case may be, the relevant Iberclear Member) upon registration in
the relevant registry of each Iberclear Member and/or Iberclear itself, as applicable.
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3. SECURITY
(a) Under the Security Documents, the Security will be granted by the Issuer and the Shareholders to
secure the Secured Liabilities. The Security will be granted to the Security Agent for the benefit of the
Security Agent and the Secured Creditors in accordance with the terms of the Security Trust and
Subordination Deed. Each Bondholder, by subscribing to, purchasing or otherwise acquiring a Bond,
shall be deemed: (i) to have authorised the Bond Trustee and the Security Agent to enter into the
Security Documents; and (ii) to be bound thereby.
(b) The initial Security will consist of:
(i) a Spanish law first ranking pledge over the Issuer's assignable rights, present and future, and
receivables under:
(A) the Project Documents;
(B) certain Insurances taken out by the Issuer in relation to the Project; and
(C) any letter of credit (avales) granted in favour of the Issuer with regards to the Project,
including the Expropriation Letters of Credit and the Construction Performance
Bonds;
(ii) a Spanish law first ranking pledge over the Project Accounts; and
(iii) a Spanish law first ranking pledge over the Issuer's share capital.
The documents under which the Security described above will be granted are referred to as the Initial
Security Documents.
Under these Conditions and the other Finance Documents, the Issuer will grant additional Security (and
take all necessary action to ensure such Security is granted) to secure the Secured Liabilities over:
(i) future shares comprised in the Issuer’s share capital;
(ii) the Issuer’s assignable rights present and future, and receivables under any Expropriation
Letter of Credit issued after the Closing Date; and
(iii) any Expropriation Reserve Account.
In these Conditions, the assets over which any such Security has been granted to secure the Secured
Liabilities shall be referred to as the Secured Assets.
(c) The Security shall become enforceable if an Enforcement Notice is served. The enforcement of the
Security is provided for under the Security Documents and may be enforced by the Security Agent for
its benefit and the benefit of the Secured Creditors in accordance with Condition 13 (Enforcement) and
the Security Trust and Subordination Deed. The Bondholders may not, individually or collectively,
take any direct action to enforce any rights in their favour under the Security Documents. Subject to
paragraph (e) of Condition 13 (Enforcement), the Bondholders may only act through the Bond Trustee
or the Security Agent, as applicable.
(d) The Security Agent may agree to the extension of the Security created by any of the Security
Documents to Further Bonds in accordance with these Conditions and the other Finance Documents
without requiring any consent of the Bond Trustee or the Bondholders. All Security granted to the
Security Agent on behalf of the Bondholders, the Bond Trustee and the other Secured Creditors under
the Security Documents shall be automatically and unconditionally released to the Issuer and the
Shareholders on the Final Discharge Date.
4. INFORMATION COVENANTS
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So long as any of the Bonds remains outstanding, the Issuer shall comply with the information
covenants set out below.
4.1 Financial Statements
The Issuer shall supply to the Security Agent, the Bond Trustee and the Bondholders in sufficient
copies:
(a) audited financial statements (consolidated if appropriate) of the Issuer (Annual Financial
Statements), and related accountants' reports, within 180 days after the end of each Financial
Year; and
(b) unaudited management accounts (consolidated if appropriate) of the Issuer for the first
financial half-year in each Financial Year (Semi-Annual Financial Statements), within 90
days after the end of such financial half-year.
4.2 Form of Financial Statements
The Issuer shall procure that each set of Financial Statements supplied by it under Condition 4.1
(Financial Statements):
(a) is prepared in accordance with the Accounting Standards and includes a cashflow statement, a
profit and loss statement and a balance sheet; and
(b) gives a true and fair view of or, in the case of any Annual Financial Statements, fairly
represents its financial condition (consolidated or otherwise) as at the date to which those
Financial Statements were drawn up and the results of its operations during such period.
4.3 Notification of Default
The Issuer shall notify the Security Agent, the Bond Trustee and the Bondholders of any Default (and
the steps, if any, being taken to remedy it) as soon as reasonably practicable upon becoming aware of
its occurrence.
4.4 Ratios
(a) The Issuer shall, within 30 days of each Calculation Date, calculate each Ratio in respect of such
Calculation Date on the basis of:
(i) in the case of the Historic DSCR, the most recent unaudited management accounts of the
Issuer in respect of the Relevant Period ending on such Calculation Date; and
(ii) in the case of the Forecasted DSCR and the BLCR, the Financial Model re-run on the basis of
the assumptions used for the Base Case, updated, if necessary in accordance with this
Condition 4.4.
(b) The Issuer shall, in calculating the Forecasted DSCR and the BLCR in accordance with this
Condition 4.4, re-run the Financial Model on the basis of the assumptions used for the Base Case
except that, subject as provided in paragraph (c) below:
(i) Lifecycle Maintenance Costs shall be updated to reflect the amount of Lifecycle Maintenance
Costs actually incurred up to that Calculation Date and expected to be incurred on and after
that Calculation Date;
(ii) Monitored Costs shall be updated to reflect the amount of Monitored Costs actually incurred
up to that Calculation Date;
(iii) Project Income shall be updated to reflect Project Income actually received up to that
Calculation Date; and
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(iv) tax rates shall be updated to reflect tax rates then in effect (or, if different in respect of future
periods, tax rates that will then be in effect).
(c) If:
(i) the aggregate Lifecycle Maintenance Costs incurred and expected to be incurred up a
particular date is more than the aggregate amount of such costs set out in the Base Case (or, if
different, the most recently approved amount under this paragraph (c)); or
(ii) Monitored Costs for any period differ by more than 50% from the corresponding amount set
out in the Base Case,
the amount of Lifecycle Maintenance Costs and/or Monitored Costs must (where relevant) be first
approved by the Technical Adviser and Insurance Adviser as being costs actually incurred or, in the
case of Lifecycle Maintenance Costs expected to be incurred, which a reasonable and prudent operator
of the Project would expect to incur. If this paragraph (c) applies, the relevant Compliance Certificate
must, where appropriate, be countersigned (where relevant) by the Technical Adviser and/or Insurance
Adviser confirming its/their approval.
(d) The Issuer must ensure that each Ratio calculated under this Condition is calculated:
(i) based on such historic information and forecasts which it believes to be reasonable and, in
respect of such historic information, to reflect accurately actual results;
(ii) in a manner consistent with the provisions of the Concession, the Transaction Documents and
the current Budget in all material respects;
(iii) to the best of its knowledge and belief, in good faith and with due care; and
(iv) otherwise in accordance with this Condition 4.4.
4.5 Updated Base Case
(a) The Issuer may, at any time, prepare an updated Base Case (each an Updated Base Case) which must
be prepared by reference to the Financial Model, but which may include modifications to the
assumptions included and/or the methodology and formulae used in the Financial Model as it deems fit.
(b) The Issuer shall, in relation to each Updated Base Case:
(i) ensure that the modifications to the assumptions included and/or the methodology and
formulae used in the Financial Model are made in good faith and after due and careful
consideration and shall deliver an Officer's Certificate at the same time as it delivers the
Updated Base Case certifying the same; and
(ii) ensure that:
(A) the Technical Adviser and Insurance Adviser (where relevant) approve the Monitored
Costs as being costs actually incurred or, in the case of Lifecycle Maintenance Costs,
expected to be incurred;
(B) the Technical Adviser and Insurance Adviser (where relevant and acting reasonably)
approve the assumptions included in the Financial Model; and
(C) the Financial Model Auditor audits the Financial Model to the extent that there is a
modification in the methodology or formulae used in the Financial Model.
(c) Any Updated Base Case so prepared shall be delivered to the Security Agent, the Bond Trustee and the
Bondholders as soon as reasonably practicable.
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(d) Any Updated Base Case so prepared will be required to be approved by the Bondholders on a Negative
Approval basis within a period of ten Business Days from the date of delivery of the Updated Base
Case to, inter alia, the Bondholders in accordance with Condition 4.5(c) (or, at any time, may be
approved by the Bond Trustee acting on the instructions of the Bondholders pursuant to an Ordinary
Resolution), and once so approved in a manner aforesaid will be considered thereafter as the Base Case
for the purpose of these Conditions.
4.6 Compliance Certificate
(a) The Issuer shall, within 30 days of each Calculation Date, supply to the Security Agent, the Bond
Trustee and the Bondholders a Compliance Certificate. Such Compliance Certificate shall confirm:
(i) the level of each of the Ratios for such Calculation Date;
(ii) that each of the Ratios has been calculated in accordance with the requirements of
Condition 4.4 (Ratios), specifying the results of such calculations and attaching a copy of: (A)
the computations (in reasonable detail) made in respect of the calculation of such Ratios; and
(B) the unaudited management accounts on which the calculations of such Ratio have been
based;
(iii) the level of the Maintenance Reserve Minimum Balance for such Calculation Date; and
(iv) the Distributable Amount as at that Calculation Date.
(b) Each Compliance Certificate shall confirm that, to the best of the knowledge of the Officers signing
such certificate:
(i) the contents of the Compliance Certificate are accurate in all material respects as at the date of
that Compliance Certificate; and
(ii) no Event of Default has occurred or is continuing, or if an Event of Default has occurred and
is continuing, the steps (if any) that are being taken to remedy such Event of Default.
(c) If so required under Condition 4.5 (Updated Base Case) or, in respect of paragraph (a) (iii) above,
Condition 4.4 (Ratio), the Compliance Certificate must be countersigned by the Technical Adviser
and/or the Insurance Adviser.
4.7 Investor Report
The Issuer shall, within 30 days of each Calculation Date, supply to the Security Agent, the Bond
Trustee and the Bondholders, an electronic report in substantially the form set out in Schedule 4 (Form
of Investor Report) to the Trust Deed (an Investor Report).
4.8 Budget
The Issuer shall, no later than the date falling 15 days before the start of each Financial Year, supply to
the Security Agent, the Bond Trustee and the Bondholders an electronic copy of a budget in
substantially the form set out in Schedule 5 (Form of Budget) to the Trust Deed (a Budget).
4.9 Issuer Information
So far as permitted by any applicable law, regulation, order or any binding confidentiality obligations,
the Issuer shall supply to the Security Agent and the Bond Trustee:
(a) upon request by the Bond Trustee (pursuant to an instruction of Bondholders with 25% or
more of the nominal amount of the Bonds then outstanding), an Officers' Certificate
confirming that, to the best of the signatory's knowledge:
(i) the contents of the certificate are accurate in all material respects; and
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(ii) no Default has occurred or is continuing, or if a Default has occurred and is
continuing, steps (which shall be specified) are being taken to remedy such Default;
(b) as soon as reasonably practicable after becoming aware of the same, details of any litigation,
arbitration or administrative proceedings which are current or threatened in writing against the
Issuer, where such proceedings are reasonably likely to be adversely determined and which, if
adversely determined, would have or would be reasonably likely to have a Material Adverse
Effect; and
(c) as soon as reasonably practicable after becoming aware of the same, details of any disputes
under the Project Documents, where such dispute has or would be reasonably likely to have, a
Material Adverse Effect.
4.10 Challenge and Review
(a) If, within ten days following the delivery of the Compliance Certificate, the same has not been
approved on a Negative Approval basis (or, at any time, by the Bond Trustee acting on the instructions
of the Bondholders pursuant to an Ordinary Resolution) the Issuer shall, as soon as reasonably
practicable following notification of the same by the Bond Trustee (hereinafter referred to as a
challenge), provide to the Bond Trustee and the Bondholders for approval on a Negative Approval
basis (or, at any time, by the Bond Trustee acting on the instructions of the Bondholders pursuant to an
Ordinary Resolution) a restated Compliance Certificate (a Restated Compliance Certificate) and re-
calculate the Historic DSCR for the Relevant Period with such changes (if any) as may be required to
ensure that the Ratios are calculated in accordance with Condition 4.4 (Ratios) and the Compliance
Certificate prepared in accordance with Condition 4.6 (Compliance Certificate). The Bond Trustee
shall deliver a copy of the Restated Compliance Certificate to the Security Agent.
(b) Bondholders may only not approve the Compliance Certificate if they consider (acting reasonably and
having provided due justification) that it has not been prepared, and the Ratios have not been
calculated, in each case in accordance with Condition 4 (Information Covenants) or:
(i) they consider (acting reasonably and having provided due justification) that there is an error
in:
(A) the computations made in respect of the calculation of the Ratios contained in the
Compliance Certificate;
(B) the unaudited management accounts on which the calculations of such Ratio have
been based; or
(C) any of the information required to support the updates to the assumptions in
accordance with Condition 4.4 (Ratios); and
(ii) if the error described in paragraph (b)(i) above were corrected, would result in any of the
Ratios for any Relevant Period being:
(A) less than 1.05:1 for that Relevant Period in circumstances when the Ratio for the
same Relevant Period set out in the Compliance Certificate was more than or equal to
1.05:1; or
(B) less than 1.15:1 for that Relevant Period in circumstances when the Ratio for the
same Relevant Period as set out in the Compliance Certificate was more than or equal
to 1.15:1.
(c) If, within ten days of the Bondholders receipt of a Restated Compliance Certificate, that Restated
Compliance Certificate has not been approved by the Bondholders on a Negative Approval basis (or, at
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any time, by the Bond Trustee acting on the instructions of the Bondholders pursuant to an Ordinary
Resolution), the Issuer must provide a further Restated Compliance Certificate in accordance with
paragraph (a) above. The Issuer's and the Bondholders' respective rights under this paragraph (c) and
paragraph (a) above shall subsist until the Issuer, at its own cost, appoints and instructs the Technical
Adviser or such other expert as may be agreed between the Issuer and the Bond Trustee (the person so
appointed or instructed, the Independent Expert) to investigate the relevant statement(s),
computation(s) or ratio(s) that is/are the subject of the challenge.
(d) Any Independent Expert appointed pursuant to paragraph (c) above shall undertake to provide a report
of its conclusions to the Issuer and the Bond Trustee within 30 days of receipt of instructions pursuant
to paragraph (c) above, which report shall be binding and conclusive as to the challenge in respect of
which that Independent Expert is appointed. The Issuer shall deliver such report to the Bondholders in
accordance with these Conditions.
(e) The Issuer may not make a Restricted Payment or make any transfer to the Distributions Account
during the period starting on (and including) the date on which the Compliance Certificate is delivered
to (but excluding) the later of:
(i) the date falling ten days from such date; and
(ii) in the event of a challenge by the Bond Trustee in accordance with the provisions of paragraph
(a) above: (A) where no Independent Expert is required to be instructed, the date falling ten
days after the Bond Trustee's receipt of a Restated Compliance Certificate; and (B) where an
Independent Expert is required to be instructed, the date on which the Independent Expert
announces its conclusions and the Issuer has, to the extent necessary and as soon as reasonably
practicable following the conclusion of the challenge and review process, delivered a further
Restated Compliance Certificate reflecting such conclusions.
(f) Any Restated Compliance Certificate delivered under this Condition shall, for all purposes, be deemed
to be the Compliance Certificate for the relevant Calculation Date.
(g) Any challenge or review of a Compliance Certificate or, as the case may be, Restated Compliance
Certificate shall, for the avoidance of doubt, terminate on the passing of an Ordinary Resolution
pursuant to this Condition 4.10.
4.11 Investor Website
(a) Except as provided below, the Issuer shall maintain a website which shall be accessible to the
Bondholders (the Investor Website). Bondholders shall be given access to this website through a
password provided to them by or on behalf of the Issuer upon proof (in the form of a Certificate) from
such Bondholder that it is a holder of Bonds. Without prejudice to its obligations to maintain an
Investor Website, the Issuer may designate a third party to operate and manage the Investor Website on
its behalf.
(b) The Issuer shall ensure that all information that is required to be supplied by the Issuer to the
Bondholders under and pursuant to these Conditions is published on the Investor Website. The Issuer
shall also ensure that a notice is published on MARF (on the Boletín Diario MARF) stating that such
information as is required to be published on the Investor Website under and pursuant to these
Conditions is available for viewing by the Bondholders.
(c) The Issuer shall be deemed to have complied with its obligations under paragraph (b) above upon the
date which is the later of the: (i) day of publication of the information on the Investor Website; and (ii)
day on which notice is published on MARF (on the Boletín Diario MARF) stating that such
information that is required to be published on the Investor Website has been published. If any such
69
publication under paragraph (i) or (ii) above is made later than 5.00pm (Madrid time), the day of
publication under such paragraphs shall be deemed to be the next Business Day.
(d) The Issuer shall ensure that Bondholders are notified (which may be by email alert from the Investor
Website or otherwise) of any information that is published on such Investor Website. Any requirement
in these Conditions to notify or supply information to Bondholders will be satisfied upon the sending of
any such notice to the Bondholders notifying them of the publication of any such information on the
Investor Website.
(e) The Issuer shall as soon as reasonably practicable upon becoming aware of its occurrence, notify the
Bondholders if:
(i) the Investor Website cannot be accessed for a period of five Business Days; or
(ii) the Investor Website or any information on the website is infected by any electronic virus or
similar software for a period of five Business Days.
(f) If the circumstances in paragraphs (e)(i) or (ii) above occur, the Issuer shall supply all information
required to be delivered to the Bondholders to the Agent and shall notify Bondholders that such
information is available to them at the registered office of the Agent.
5. GENERAL COVENANTS
So long as any of the Bonds remain outstanding, the Issuer shall comply with the covenants set out
below.
5.1 Status, Powers and Authority
(a) The Issuer shall maintain its existence as a company, duly incorporated and validly existing under the
laws of its jurisdiction of incorporation and the power and authority to own its assets and carry on its
business as it is being conducted from time to time.
(b) The Issuer shall ensure that it has (or will have at all relevant times) the power to enter into, perform
and deliver the Transaction Documents to which it is or will be a party and the transactions
contemplated by those Transaction Documents and that it has taken (or will take at all relevant times)
all necessary action to authorise its entry into, performance of and delivery of the Transaction
Documents to which it is or will be a party and the transactions contemplated by those Transaction
Documents.
5.2 Authorisations
The Issuer shall promptly:
(a) obtain, comply with and do all that is necessary to maintain in full force and effect, any
Authorisation required under any law or regulation of any of its Relevant Jurisdictions to:
(i) enable it to perform its material obligations under the Transaction Documents;
(ii) ensure the legality, validity, enforceability or admissibility in evidence of any
Transaction Document; and
(iii) carry on its business; and
(b) supply certified copies of any such Authorisation to the Bond Trustee (acting in accordance
with the Trust Deed) as soon as reasonably practicable upon written request of the Bond
Trustee,
save, in each case, where failure to do so would not have or would not reasonably be likely to have a
Material Adverse Effect.
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5.3 Constitutional Documents
The Issuer may not, without the prior written consent of the Bond Trustee (acting on the instructions of
the Bondholders by Extraordinary Resolution in accordance with the Trust Deed), change its
constitutional documents, save for any amendment which could not be expected to be materially
prejudicial to the interests of the Bondholders.
5.4 Compliance with laws
The Issuer shall comply in all respects with all authorisations, laws and regulations to which it or the
Bond may be subject, save where failure to do so would not have or would not reasonably be likely to
have a Material Adverse Effect.
5.5 Environmental Compliance
The Issuer shall:
(a) comply with all Environmental Laws;
(b) obtain and ensure compliance with all requisite Environmental Permits; and
(c) implement procedures to monitor compliance with and prevent liability under any
Environmental Law,
in each case, where failure to do so would have or would be reasonably likely to have a Material
Adverse Effect.
5.6 Binding Obligations
(a) Subject to the Legal Reservations, the Issuer shall ensure that the obligations expressed to be assumed
by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable
obligations.
(b) Without limiting the generality of paragraph (a) above, the Issuer shall ensure that each Security
Document to which it is a party creates the Security Interests over the Secured Assets which that
Security Document purports to create and those Security Interests are valid and effective and are not
subject to any prior or pari passu Security Interests, other than any Permitted Security.
5.7 Non-Conflict
The Issuer shall ensure that the entry into and performance by it of, and the transactions contemplated
by, the Transaction Documents to which it is party do not and will not conflict with:
(a) any law or regulation applicable to it and which is material in the context of the transactions
contemplated in the Transaction Documents;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its assets or constitute a default or
termination event (however described) under any such agreement or instrument,
in each case to the extent that such conflict or conflicts would have or be reasonably likely to have a
Material Adverse Effect.
5.8 Securities Compliance
(a) The Issuer shall not, and shall use its best endeavours to ensure that none of its director, officer, agent,
employee or other person associated with or acting on behalf of the Issuer shall: (i) use any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) make any direct or indirect unlawful payment to any foreign or domestic government
71
official or employee from corporate funds; (iii) violate any provision of the U.S. Foreign Corrupt
Practices Act of 1977 or the UK Bribery Act 2010 or any anti-bribery or anti-corruption law or
regulation to which it is subject in any jurisdiction; or (iv) make, offer or promise to make, or authorise
the payment or giving of any bribe, rebate, payoff, influence payment, facilitation payment, kickback
or other unlawful payment or gift of money or anything of value prohibited under any law or regulation
to which it is subject.
(b) The Issuer shall use its best endeavours to ensure that its operations are conducted at all times in
compliance with applicable financial record keeping and reporting requirements and all money
laundering statutes, the rules and regulations in Spain and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency having jurisdiction over it
(the Money Laundering Laws).
5.9 Taxation
The Issuer shall pay and discharge all Taxes imposed upon it or its assets within the time period
allowed without incurring penalties unless and only to the extent that:
(a) such payment is being contested in good faith;
(b) adequate reserves are being maintained for those Taxes and the costs required to contest them
and such reserves have been disclosed in its latest Financial Statements supplied under
Condition 4.1 (Financial Statements);
(c) such payment can be lawfully withheld; or
(d) failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse
Effect.
5.10 Merger
The Issuer shall not enter into any amalgamation, demerger, merger, consolidation or corporate
reconstruction other than any which is or which arises as part of a Permitted Transaction.
5.11 Change of Business
The Issuer undertakes to carry on only the Permitted Business.
5.12 Acquisitions
(a) Except as permitted under paragraph (b) below, the Issuer shall not:
(i) acquire a company or any shares or securities or a business or undertaking (or, in each case,
any interest in any of them); or
(ii) incorporate a company.
(b) Paragraph (a) above does not apply if the relevant acquisition or incorporation is or arises as part of:
(i) a Permitted Acquisition; or
(ii) a Permitted Transaction.
5.13 Joint Ventures
(a) Except as permitted under paragraph (b) below, the Issuer shall not:
(i) enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other
interest in any Joint Venture; or
72
(ii) transfer any assets or lend to or guarantee or give an indemnity for or give any Security
Interest for the obligations of a Joint Venture or maintain the solvency of or provide working
capital to any Joint Venture (or agree to do any of the foregoing).
(b) Paragraph (a) above does not apply to a Joint Venture which is or which arises as part of:
(i) a Permitted Acquisition; or
(ii) a Permitted Transaction.
5.14 Pari Passu Ranking
The Issuer shall do nothing to cause the ranking of the Bonds to be otherwise than as described in
Condition 1.2 (Status of the Bonds).
5.15 Negative Pledge
(a) Except as permitted under paragraph (b) below:
(i) the Issuer shall not create or permit to subsist any Security Interest over any of its assets; and
(ii) the Issuer shall not:
(A) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or
may be leased to or re-acquired by the Issuer;
(B) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(C) enter into any arrangement under which money or the benefit of a bank or other
account may be applied, set off or made subject to a combination of accounts; or
(D) enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of
raising Financial Indebtedness or of financing the acquisition of an asset (any such
arrangement or transaction, Quasi-Security).
(b) Paragraph (a) above does not apply to any Security Interest or Quasi-Security which is or which arises
as part of:
(i) Permitted Security;
(ii) a Permitted Disposal; or
(iii) a Permitted Transaction.
5.16 Disposals
(a) Except as permitted under paragraph (b) below, the Issuer shall not enter into a single transaction or a
series of transactions, whether related or not and whether voluntary or involuntary, to sell, lease,
transfer or otherwise dispose of any asset.
(b) Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is or which
arises as part of:
(i) a Permitted Disposal;
(ii) Permitted Payment; or
(iii) a Permitted Transaction.
5.17 Arm's Length Basis
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(a) Except as permitted by paragraph (b) below, the Issuer shall not enter into any transaction with any
person, except on arm's length terms and for fair market value.
(b) Paragraph (a) above does not apply to any transaction which is or which arises as part of:
(i) the payment of fees, costs and expenses payable under the Finance Documents in the amounts
set out in, or determined in accordance with, the Finance Documents;
(ii) a Permitted Transaction; or
(iii) any other transaction expressly permitted by the Finance Documents.
5.18 Loans or Credit
(a) Except as permitted under paragraph (b) below, the Issuer shall not be a creditor in respect of any
Financial Indebtedness.
(b) Paragraph (a) above does not apply to any loan or credit which is or which arises as part of:
(i) a Permitted Loan; or
(ii) a Permitted Transaction.
5.19 No Guarantees or Indemnities
(a) Except as permitted under paragraph (b) below, the Issuer shall not incur or allow to remain
outstanding any guarantee in respect of any obligation of any person.
(b) Paragraph (a) above does not apply to a guarantee which is or which arises as part of:
(i) a Permitted Guarantee; or
(ii) a Permitted Transaction.
5.20 Restricted Payments
(a) Except as permitted under paragraph (c) below, the Issuer shall not make a Restricted Payment unless
the payment is made from amounts standing to the credit of the Distribution Account.
(b) The Issuer shall not make any transfer to the Distribution Account unless:
(i) each of the Restricted Payment Conditions is satisfied and a Compliance Certificate has been
delivered in accordance with Condition 4.6 (Compliance Certificate) confirming the same;
(ii) the transfer is in an amount which is not more than the Distributable Amount; and
(iii) the time at which the transfer is made from the General Account to the Distribution Account
does not fall within a period in which a Restricted Payment may not be made pursuant to
paragraph (e) of Condition 4.10 (Challenge and Review).
(c) Paragraph (a) above does not apply to a payment which is or which arises as part of:
(i) paragraph (a), (b) or (c) of the definition of Permitted Payment; or
(ii) a Permitted Transaction.
5.21 Restricted Investments
(a) Except as permitted under paragraph (b) below, the Issuer shall not invest in, own or otherwise
participate in any investments other than those which are necessary for the performance of the Project.
(b) Paragraph (a) above does not apply to any Permitted Investments.
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5.22 Financial Indebtedness
(a) Except as permitted under paragraph (b) below, the Issuer shall not incur or allow to remain
outstanding any Financial Indebtedness.
(b) Paragraph (a) above does not apply to Financial Indebtedness which is or which arises as part of:
(i) Permitted Financial Indebtedness; or
(ii) a Permitted Transaction.
5.23 Amendments to Finance Documents
The Issuer shall not amend, vary, novate, supplement, supersede, waive or terminate any term of a
Finance Document, except in accordance with the terms of such Finance Document.
5.24 Project Documents
(a) The Issuer shall at all times comply with and perform all of its material obligations under and in
connection with the Project Documents to which it is a party, to the extent that a failure to comply or
perform would have or be reasonably likely to have a Material Adverse Effect.
(b) The Issuer shall not make any material amendments to any term or waive, assign, transfer or suspend
all or any part of a Project Document or enter into any other material contract or other material
commercial arrangement unless:
(i) it is required to do so by law or regulation;
(ii) it is permitted to do so under the terms of these Conditions or the other Finance Documents;
(iii) the same is required for the purposes of carrying out the Permitted Business and:
(A) it is an amendment to the Construction Contract to provide for payment of a
Contractor Bonus which, in the determination of the Issuer acting in good faith:
(I) is payable from additional Project Income not previously forecasted in the
Base Case; and
(II) could not reasonably be expected to be materially prejudicial to the
Bondholders;
(B) it is an amendment to the Construction Contract to provide for payments to the
Contractor of amounts originally payable under and in accordance with the
Construction Contract in advance of the scheduled payment dates set out therein to
the extent that the Contractor completes the Works prior to 11 July 2015;
(C) if the same is to enter into a Lifecycle Contract:
(I) the counterparty to such Lifecycle Contract has adequate legal power and
authority to enter into such Lifecycle Contract and be bound by the
obligations assumed by it thereunder; and
(II) the Technical Adviser has confirmed that: (1) the counterparty has, in its
view, the technical capacity to carry out the services required of it under
such Lifecycle Contract; and (2) the amount of Lifecycle Maintenance Costs
payable under such Lifecycle Contract are not more than the aggregate
amount of such costs set out in the Base Case (or, if different, the most
recently approved amount under paragraph (c) of Condition 4.4 (Ratios));
(D) if the same is to enter into an O&M Agreement:
75
(I) the Operator under such O&M Agreement has adequate legal power and
authority to enter into such O&M Agreement and be bound by the
obligations assumed by it thereunder; and
(II) if the O&M Agreement is in respect of services affecting 50% or more of
the Monitored Costs set out in the Base Case which are forecast to be
incurred by the Issuer in each future period, the Technical Adviser has
confirmed that the Operator has, in its view, the technical capacity to carry
out the services required of it under such O&M Agreement; or
(E) it is to enter into a Project Document of the type referred to in paragraph (e) of the
definition of Project Documents,
and, in the case of paragraphs (b)(iii) (A), (B) and (D) above, the Issuer has delivered an Officer's
Certificate confirming the same to the Security Agent and the Bond Trustee.
(c) Without prejudice to paragraph (b)(iii) above, the Issuer shall, prior to entering into: (i) any O&M
Agreement of the type referred to in paragraph (b)(iii)(D)(II) above; or (ii) any amendment to the
Construction Contract (each a Relevant Project Document), notify the Security Agent, the Bond
Trustee and the Bondholders in accordance with Condition 4.11 (Investor Website) and Condition 18
(Notices) of its intention to enter into the Relevant Project Document (and provide to the Security
Agent, the Bond Trustee and the Bondholders a copy of the proposed Relevant Project Document). The
Issuer may not enter into any such document unless the same has been approved by the Bondholders on
a Negative Approval basis within ten Business Days of their receipt thereof (or, at any time, by the
Bond Trustee acting on the instructions of the Bondholders pursuant to an Ordinary Resolution).
5.25 Project Accounts
(a) The Issuer shall ensure that:
(i) each Project Account is opened, maintained and funded in accordance with the Account Bank
Agreement; and
(ii) each Project Account is subject to valid Security under the Security Documents.
(b) The Issuer shall ensure that, as at each Calculation Date, an amount equal to the Debt Service Reserve
Minimum Balance (or, if less, the amount required to be credited to the Debt Service Reserve Account
in accordance with the Account Bank Agreement) is credited to the Debt Service Reserve Account, as
at each Calculation Date, and shall only withdraw amounts or permit withdrawals of amounts from
such account in accordance with the Finance Documents.
(c) The Issuer shall ensure, as at each Calculation Date, that an amount equal to the Maintenance Reserve
Minimum Balance (or, if less, the amount required to be credited to the Maintenance Reserve Account
in accordance with the Account Bank Agreement) is credited to the Maintenance Reserve Account, as
at each Calculation Date, and shall only withdraw amounts or permit withdrawals of amounts from
such account in accordance with the Finance Documents.
(d) The Issuer shall ensure that:
(i) the aggregate amount available for drawing under Expropriation Letters of Credit; and
(ii) the amount standing to the credit of the Expropriation Reserve Account (if opened),
is at least equal to the maximum amount of payments that the Issuer reasonably believes it may need to
make in relation to further expropriation payments arising out of or in connection with the Project.
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(e) The Issuer shall deposit proceeds from Insurance claims and Permitted Disposals to the Insurance
Proceeds and Disposal Proceeds Account where required to do so in accordance with the Account Bank
Agreement and shall apply such amounts in the reinstatement and restoration of the lost or damaged
property that gave rise to such insurance proceeds or the purchase of new assets to replace those
disposed of (or otherwise transfer such amounts to the General Account) in accordance with the
Account Bank Agreement.
(f) The Issuer shall not open or maintain any bank accounts other than the Project Accounts and the
Distribution Account.
5.26 Intellectual Property Rights
(a) The Issuer shall ensure that, as soon as reasonably practicable, it becomes the sole legal and beneficial
owner of or has licence or another right to use on customary commercial terms all the Intellectual
Property Rights which are material in the context of the Permitted Business and which are required by
it in order to carry on the Permitted Business as it is being conducted, save where failure to so own or
have licence or other rights to use such Intellectual Property Rights will have or could be reasonably
expected to have a Material Adverse Effect.
(b) The Issuer shall not, in carrying on the Permitted Business, infringe any Intellectual Property Right of
any third party in any respect where such infringement will have, or would be reasonably likely to
have, a Material Adverse Effect.
5.27 Insurance
The Issuer shall maintain Insurances with an Insurance Provider on and in relation to its business and
assets as required under the Concession Agreement.
5.28 Centre of Main Interests
The Issuer shall conduct its business and affairs such that, at all times, its "centre of main interests" for
the purposes of Council Regulation (EC) No. 1346/2000 of 29 May 2000 (the Insolvency Regulation)
shall be in Spain (or, in the case of any Substitution, the jurisdiction of incorporation of the substitute
Issuer) and it shall not have any "establishment" (as defined in the Insolvency Regulation) other than in
Spain (or, in the case of any Substitution, the jurisdiction of incorporation of the substitute Issuer).
5.29 Further Assurance
(a) The Issuer shall promptly do all such acts or execute all such documents (including pledges,
assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may specify
(and in such form as the Security Agent may require in favour of the Security Agent or any of its
nominees):
(i) to perfect the Security Interest created or intended to be created under or evidenced by the
Finance Documents (which may include the execution of a mortgage, charge, assignment,
pledge or other Security Interest over all or any of the assets which are, or are intended to be,
the subject of any Security Document) or for the exercise of any rights, powers and remedies
of the Security Agent or the Secured Creditors provided by or pursuant to the Finance
Documents or by law;
(ii) to confer on the Security Agent or confer on the Secured Creditors a Security Interest over any
property or assets of the Issuer (as applicable) located in any jurisdiction equivalent or similar
to the Security Interest intended to be conferred by or pursuant to any Security Document;
and/or
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(iii) to facilitate the realisation of the assets which are, or are intended to be, the subject of any
Security Document.
(b) The Issuer shall take all such action as is available to it (including making all filings and registrations)
as may be necessary for the purpose of the creation, perfection, protection or maintenance of any
Security Interest conferred or intended to be conferred on the Security Agent or the Secured Creditors
by or pursuant to the Security Documents or to facilitate the realisation of the assets which are, or are
intended to be, the subject of any Security Documents.
5.30 Credit Rating
(a) The Issuer shall use reasonable endeavours to maintain a credit rating from at least one Rating Agency
for the Bonds.
(b) The Issuer shall use reasonable endeavours to cooperate with the Rating Agencies in connection with
any reasonable request for information in respect of the maintenance of a rating of the Bonds and with
any review of its business that may be undertaken by one or more of the Rating Agencies after the
Closing Date.
5.31 Accounting Reference Date
The Issuer may not change its Accounting Reference Date unless:
(a) the Bond Trustee has received, at the cost and expense of the Issuer, such information as it
reasonably requires (pursuant to, and as confirmed to it by, an instruction of the Bondholders
with 25% or more of the nominal amount of the Bonds then outstanding) to enable an accurate
comparison to be made between any Financial Statements received for the Relevant Period
prior to such change and Financial Statements received (or to be received) for the Relevant
Period after such change; and
(b) following such change, the basis for the calculation of the Ratios by reference to the Relevant
Periods shall be amended in such a way as not to materially prejudice the interests of the
Secured Creditors.
5.32 Auditors
The Issuer shall, as soon as reasonably practicable, notify the Security Agent, the Bond Trustee and the
Bondholders (in accordance with Condition 4.11 (Investor Website) and Condition 18 (Notices)) of any
change to its auditors.
5.33 Technical Adviser
The Bond Trustee shall, following the instruction of Bondholders with 25% or more of the nominal
amount of the Bonds then outstanding, send a written notice to the Issuer requiring it to replace the
Technical Adviser, if the Technical Adviser is not performing its role to the standard it is required to
observe under the Finance Documents. Following such notice the Issuer shall respond as soon as
reasonably practicable confirming either:
(a) the steps that it is taking to ensure that the Technical Adviser meets the standard of
performance reasonably expected of it by the Security Agent; or
(b) the steps that it shall take to replace the Technical Adviser with a person demonstrably
capable of performing such role and which is of international repute and with similar
experience in transactions and projects of a similar nature to the Project.
5.34 Conditions subsequent
The Issuer shall ensure that:
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(a) within 15 Business Days of the Closing Date, the Secured Creditors (or the Security Agent on
behalf of itself and all the Secured Creditors) have been named as co-insureds in relation to all
Insurances required to be effected or maintained by the Finance Documents;
(b) within 15 Business Days of the same arising, there is entered into a Spanish law first ranking
pledge by each Shareholder over any receivables due to that Shareholder from the Issuer in
respect of the advances and loans of that Shareholder to the Issuer for the benefit of the
Security Agent and the Secured Creditors; and
(c) by no later than 1 June 2015 at 23:59 Madrid time the initial Security, as described in
paragraph (b) of Condition 3 (Security), has been granted.
6. INTEREST
6.1 Interest Rate and Payment Dates
The Bonds bear interest from and including the Closing Date at the rate of 3.169 per cent. per annum,
payable semi-annually in arrears on each Bond Payment Date and calculated on the Principal Amount
Outstanding of each Bond. The aggregate scheduled interest payment in respect of the Bonds on each
Bond Payment Date will be as set out in the table in Condition 7.2 (Scheduled Redemption).
Accordingly, each Bond will (unless previously redeemed or purchased and cancelled as provided in
Conditions 7.3 (Mandatory Early Redemption – Termination Notice), 7.5 (Redemption for Taxation)
and 7.6 (Optional Redemption), on each Bond Payment Date, be entitled to receive an amount of
interest equal to its pro rata share of the aggregate scheduled interest payment for that Bond Payment
Date (with such pro rata amount being calculated per €1,000 in nominal amount of the Bond and
rounded down to the nearest cent).
6.2 Interest Accrual
Each Bond will cease to bear interest from and including its due date for redemption unless, upon due
presentation, payment of the principal in respect of the Bond is improperly withheld or refused or
unless default is otherwise made in respect of payment, in which event interest shall continue to accrue
as provided in the Trust Deed.
6.3 Calculation of Broken Interest
When interest is required to be calculated in respect of a period of less than a full period, it shall be
calculated on the basis of: (i) the actual number of days in the period from and including the date from
which interest begins to accrue to but excluding the date on which it falls due divided by (ii) 360.
7. REDEMPTION AND PURCHASE
7.1 Final Redemption
Unless previously redeemed, or purchased and cancelled, the Bonds shall be redeemed at their
Principal Amount Outstanding on the Final Maturity Date.
7.2 Scheduled Redemption
Each Bond shall, subject to Condition 7.3 (Mandatory Early Redemption – Termination Notice),
Condition 7.5 (Redemption for Taxation) and Condition 7.6 (Optional Redemption), be repaid in semi-
annual instalments such that on each Bond Payment Date the outstanding principal amount of the
Bonds then outstanding will be as set out next to that Bond Payment Date in the table below (as the
same may be amended in accordance with Conditions 7.4 (Mandatory Prepayment – Equity Cure) and
7.5 (Redemption for Taxation), the Redemption Schedule):
Aggregate payments (€) Principal
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Bond Payment Date Principal Payment Interest PaymentAmount
Outstanding (€)
June 20151 - 568,439.38 184,500,000.00
December 2015 - 2,988,367.00 184,500,000.00
June 2016 1,306,331.07 2,955,884.75 183,193,668.93
December 2016 1,031,887.74 2,967,208.21 182,161,781.19
June 2017 1,390,608.62 2,902,388.72 180,771,172.57
December 2017 792,040.45 2,927,970.77 179,979,132.12
June 2018 1,275,759.49 2,867,612.51 178,703,372.63
December 2018 867,756.94 2,894,478.38 177,835,615.69
June 2019 1,335,839.66 2,833,459.80 176,499,776.03
December 2019 1,025,022.54 2,858,786.48 175,474,753.49
June 2020 1,512,277.07 2,811,290.77 173,962,476.42
December 2020 1,191,922.23 2,817,689.56 172,770,554.19
June 2021 1,665,321.80 2,752,758.04 171,105,232.40
December 2021 1,388,614.85 2,771,410.46 169,716,617.55
June 2022 1,974,143.13 2,704,099.58 167,742,474.41
December 2022 1,477,590.03 2,716,943.50 166,264,884.38
June 2023 2,101,377.39 2,649,103.02 164,163,506.99
December 2023 1,446,807.54 2,658,974.56 162,716,699.45
June 2024 2,033,706.64 2,606,893.28 160,682,992.82
December 2024 1,421,985.76 2,602,600.29 159,261,007.05
June 2025 2,223,900.76 2,537,510.05 157,037,106.29
December 2025 1,638,024.58 2,543,547.46 155,399,081.72
June 2026 2,164,879.15 2,475,977.89 153,234,202.57
December 2026 1,700,383.73 2,481,951.41 151,533,818.84
June 2027 2,214,242.18 2,414,392.54 149,319,576.66
December 2027 2,062,334.76 2,418,545.77 147,257,241.90
June 2028 2,563,600.13 2,359,216.45 144,693,641.77
December 2028 2,441,593.57 2,343,618.99 142,252,048.20
June 2029 3,063,982.46 2,266,505.84 139,188,065.74
December 2029 2,811,085.24 2,254,444.57 136,376,980.50
June 2030 3,483,450.11 2,172,898.22 132,893,530.39
December 2030 3,107,799.72 2,152,491.28 129,785,730.67
1 First amortisation of principal to take place on 30 June 2016.
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June 2031 3,722,975.55 2,067,879.65 126,062,755.11
December 2031 3,234,125.81 2,041,852.45 122,828,629.30
June 2032 4,253,086.37 1,967,844.29 118,575,542.93
December 2032 3,945,771.07 1,920,581.24 114,629,771.86
June 2033 4,437,356.67 1,826,399.34 110,192,415.19
December 2033 4,161,361.82 1,784,798.79 106,031,053.37
June 2034 4,588,493.37 1,689,395.72 101,442,560.00
December 2034 4,497,797.29 1,643,076.42 96,944,762.71
June 2035 4,932,798.47 1,544,623.60 92,011,964.24
December 2035 4,915,704.56 1,490,328.01 87,096,259.67
June 2036 5,480,288.75 1,395,374.01 81,615,970.92
December 2036 5,396,954.87 1,321,942.95 76,219,016.05
June 2037 5,953,529.72 1,214,399.70 70,265,486.33
December 2037 5,922,608.14 1,138,097.89 64,342,878.19
June 2038 6,444,017.22 1,025,176.87 57,898,860.97
December 2038 6,494,022.07 937,794.28 51,404,838.89
June 2039 7,029,721.22 819,034.73 44,375,117.67
December 2039 8,462,917.68 718,748.71 35,912,199.99
June 2040 9,034,688.89 575,351.35 26,877,511.10
December 2040 9,139,601.81 435,338.03 17,737,909.29
June 2041 9,646,793.50 282,618.60 8,091,115.79
December 2041 8,091,115.81 131,052.70 -
Each Bond then outstanding will receive its pro rata share of the Principal Payment and Interest
Payment amounts set out in the Redemption Schedule and its Principal Amount Outstanding will be its
pro rata share of the Principal Amount Outstanding set out in the Redemption Schedule.
7.3 Mandatory Early Redemption – Termination Notice
(a) If a Termination Notice is validly served (other than due to a default of the Issuer) then the Issuer shall,
upon receipt of notice of termination, as soon as reasonably practicable give notice thereof to the
Bondholders in accordance with Condition 18 (Notices), to the Bond Trustee and to the Agent and
upon receipt of Compensation following termination:
(i) immediately pay such Compensation into the General Account; and
(ii) redeem the Bonds on the Redemption Date, which Redemption Date shall be no less than six
Business Days and no more than ten Business Days after receipt of such Compensation, at
their Principal Amount Outstanding, together with: (A) if and to the extent to paragraph (b)
below is applicable, their Redemption Premium, and (B) in all cases, accrued but unpaid
interest on their Principal Amount Outstanding to (but excluding) such date (rounding the
resulting figure to the nearest cent, a half cent being rounded upwards).
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(b) If a Termination Notice is validly served following a termination event occurring under paragraph (g)
and (h) of article 245 of the LCSP, the Issuer shall, in addition to the amounts payable under paragraph
(a) above, and in respect of each Bond, pay a Redemption Premium in accordance with paragraph (c)
below.
(c) The Issuer must pay the Redemption Premium:
(i) if the Redemption Amount has been determined by the date falling no less than six Business
Days prior to the Redemption Date, on the Redemption Date; and
(ii) if paragraph (i) above does not apply, within ten Business Days of the Redemption Amount
being determined and in any case no later than 30 days after the Redemption Date.
7.4 Mandatory Prepayment – Equity Cure
(a) Upon receipt of an Equity Cure Amount into the General Account in accordance with Condition 12.1
(Equity Cure), the Issuer shall, as soon as is reasonably practicable, give notice to the Bondholders in
accordance with Condition 18 (Notices) of a mandatory prepayment of the Bonds and the Redemption
Date, which Redemption Date shall be no less than six Business Days and no more than ten Business
Days following receipt of the Equity Cure Amount as aforesaid and, on the Redemption Date prepay an
aggregate Principal Amount Outstanding of the Bonds in an amount equal to the Equity Cure Amount
(the Relevant Prepayment Amount), together with (i) subject to paragraph (c) below, a pro rata share
of the relevant Redemption Premium and (ii) in all cases, accrued but unpaid interest on the Relevant
Prepayment Amount to (but excluding) such date (rounding the resulting figure to the nearest cent, a
half cent being rounded upwards).
(b) Any prepayment made under paragraph (a) of this Condition 7.4, shall be made pro rata across the
Bonds and, upon any such prepayment as aforesaid, the Issuer shall deliver to the Security Agent, the
Bond Trustee and the Bondholders a revised Redemption Schedule, on the basis that the Equity Cure
Amount had reduced subsequent Principal Payments on a pro rata basis and Interest Payments had been
reduced accordingly.
(c) If the Relevant Prepayment Amount, when aggregated with the amount of any previous prepayments
(if any) made under this Condition 7.4, exceeds €35,000,000, then the Issuer shall, in respect of each
Bond, pay to the Bondholders a pro rata share of the relevant Redemption Premium in accordance with
paragraph (d) of this Condition 7.4. For these purposes, the pro rata share of the relevant Redemption
Premium shall be an amount equal to the product of the relevant Redemption Premium and the
Relevant Percentage where:
Excess Amount means (i) if the Previously Prepaid Amount does not exceed €35,000,000, the amount
(if any) by which the Relevant Prepayment Amount, when aggregated with the Previously Prepaid
Amount, exceeds €35,000,000; and (ii) if the Previously Prepaid Amount exceeds €35,000,000, the
Relevant Prepayment Amount.
Previously Prepaid Amount means, in respect of any prepayment under this Condition 7.4, the
aggregate amount of each previous prepayment under this Condition 7.4 (or, if there have been no
previous prepayments, zero).
Relevant Percentage means the percentage determined by dividing the Excess Amount by the
Outstanding Principal Amount of the Bonds on the relevant Redemption Date.
(d) The Issuer must pay the pro rata share of the Redemption Premium (if any):
(i) if the Redemption Amount has been determined by the date falling no less than six Business
Days prior to the Redemption Date, on the Redemption Date; and
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(ii) if paragraph (i) of this Condition 7.4(d) does not apply, within ten Business Days of the pro
rata share of the Redemption Amount being determined and, in any case, no later than 30 days
after the Redemption Date.
7.5 Redemption for Taxation
(a) The Issuer may at any time redeem either: (i) all (but not some only) of the Bonds; or (ii) only those
Bonds in respect of which Additional Amounts are required to be paid (in both cases, the Tax
Redemption Bonds), in each case, in whole (but not in part) at their Principal Amount Outstanding as
at the relevant Redemption Date, which shall fall on a Bond Payment Date, together with interest
accrued to but excluding the Redemption Date on giving not less than 30 nor more than 60 days' notice
to the Agent and to the Bondholders in accordance with Condition 18 (Notices) (which notice shall be
irrevocable), if the Issuer satisfies the Bond Trustee immediately prior to giving such notice that:
(i) it has, or will on the occasion of the next payment due in respect of such Bonds, become
obliged to pay Additional Amounts as provided or referred to in Condition 10 (Taxation) as a
result of any change in, or amendment to, the laws or regulations of the Relevant Taxing
Jurisdiction, or any change in the published application or official interpretation of such laws
or regulations, which change or amendment becomes effective on or after the date of the Trust
Deed; and
(ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it,
provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date
on which the Issuer would be obliged to pay such Additional Amounts were a payment in respect of the
Tax Redemption Bonds then due.
(b) Prior to the publication of any notice of redemption pursuant to paragraph (a) above the Issuer shall
deliver to the Bond Trustee an Officer's Certificate confirming that: (i) the obligation referred to in
paragraph (a)(i) above cannot be avoided by the Issuer taking reasonable measures available to it; and
(ii) the Issuer has sufficient funds to redeem the Tax Redemption Bonds at their Principal Amount
Outstanding (as at the relevant Redemption Date), together with interest accrued to but excluding the
Redemption Date, and the Bond Trustee shall be entitled (without further enquiry or liability) to accept
such Officer's Certificate as sufficient evidence of the satisfaction of the condition precedent set out in
paragraph (a) above, and such opinion and Officer's Certificate (if accepted) shall be conclusive and
binding on the Bondholders.
(c) If the Tax Redemption Bonds do not constitute all of the Bonds then outstanding, upon redemption, the
Issuer shall deliver a revised Redemption Schedule, on the basis that the Principal Amount Outstanding
of the Tax Redemption Bonds reduced subsequent Principal Payments on a pro rata basis and Interest
Payments were reduced accordingly.
7.6 Optional Redemption
(a) On giving not more than 60 nor less than 30 days' prior notice to the Bondholders (in accordance with
Condition 18 (Notices)), the Bond Trustee, the Security Agent and the Agent, the Issuer may redeem,
on the Redemption Date, which shall fall on a Bond Payment Date, the Bonds in whole but not in part
provided that: (i) on or prior to the Redemption Date, no Enforcement Notice has been served; and (ii)
the Issuer has, immediately prior to giving such notice, certified to the Bond Trustee that it will have
the necessary funds to pay the Redemption Amount in respect of the relevant Bonds on the Redemption
Date and to discharge all other amounts required to be paid by it on the Redemption Date.
(b) Any Bond redeemed pursuant to paragraph (a) above shall be redeemed at an amount equal to the
Redemption Amount, together with accrued but unpaid interest to (but excluding) such date (rounding
the resulting figure to the nearest cent, a half cent being rounded upwards).
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7.7 Open Market Purchases; Cancellation of Bonds
(a) The Issuer may at any time purchase Bonds in the open market or otherwise at any price. The Trust
Deed shall contain limitations on, inter alia, the right to attend Bondholder meetings and vote on
Bondholder resolutions in relation to any Bonds which are being held by or on behalf of the Issuer or
any Issuer Related Party.
(b) All Bonds purchased under paragraph (a) above may, but need not, be cancelled at the election of the
Issuer. Any Bonds so cancelled shall not be re-issued or resold.
8. PAYMENTS
(a) Payments of principal, premium (if any) and interest in respect of the Bonds will be made by transfer to
the registered account of the relevant Bondholder maintained by or on behalf of it with a bank that
processes payments in a city in which banks have access to the TARGET2 System, details of which
appear in the records of Iberclear or, as the case may be, the relevant Iberclear Member at close of
business on the day immediately preceding the date on which the payment of principal, premium (if
any) or interest, as the case may be, falls due. Bondholders must rely on the procedures of Iberclear or,
as the case may be, the relevant Iberclear Member to receive payments under the relevant Bonds. None
of the Issuer, the Bond Trustee or the Agent will have any responsibility or liability for the records
relating to payments made in respect of the Bonds.
(b) All payments: (i) are subject in all cases to any applicable fiscal or other laws and regulations; and (ii)
must be made without set-off, deduction or counterclaim, without prejudice, in the case of paragraphs
(i) or (ii), to Condition 10 (Taxation). No commissions or expenses may be charged to the Bondholders
in respect of such payments.
(c) Bondholders will not be entitled to any interest or other payment for any delay after the due date in
receiving the amount due as a result of the due date not being a business day. In this Condition 8,
business day means a day (other than a Saturday or Sunday) which is a TARGET Day and on which
commercial banks and foreign exchange markets are open for business in the place of the specified
office of the Agent.
(d) The Agent and its initial specified office are listed below. The Issuer reserves the right, subject to the
prior written approval of the Bond Trustee, at any time to vary or terminate the appointment of the
Agent and to appoint additional or other Agents, provided that it shall at all times maintain:
(i) an Agent with a specified office in a Member State (if any) that will not be obliged to
withhold or deduct tax pursuant to any law implementing European Council Directive
2003/48/EC or any law implementing or complying with, or introduced in order to conform
to, such directive; and
(ii) so long as the Bonds are listed on any Stock Exchange or admitted to listing by any other
relevant authority as MARF, an Agent with a specified office in such place as may be required
by the rules and regulations of the relevant Stock Exchange or such other relevant authority.
(e) The initial specified office of the Agent is:
C/Sauceda 28, Ed. Oceanía 1ª Planta, 28050 Madrid.
(f) Notice of any change in the Agent or its specified office shall as soon as reasonably practicable be
given or procured to be given to the Bondholders and MARF by the Issuer in accordance with
Condition 18 (Notices).
(g) In acting under the Agency Agreement, the Agent acts solely as agent of the Issuer and, in certain
limited circumstances specified therein, of the Bond Trustee and does not assume any obligation to, or
84
relationship of agency or trust with, the Bondholders. The Agency Agreement contains provisions
permitting any entity into which the Agent is merged or converted or with which it is consolidated or to
which it transfers all or substantially all of its assets to become the successor Agent.
9. PRESCRIPTION
(a) Claims in respect of principal and premium shall become void unless made within a period of ten years
from the appropriate payment date.
(b) Claims for interest in respect of Bonds shall become void unless made within five years of the relevant
Bond Payment Date, subject to the provisions of Condition 8 (Payments).
10. TAXATION
(a) All payments of principal and interest in respect of the Bonds by or on behalf of the Issuer shall be
made free and clear of, and without withholding or deduction for or on account of, any present or
future Tax imposed or levied on such payments by or within Spain or by or within any department,
political sub-division or governmental authority of or in Spain having power to tax (each, a Relevant
Taxing Jurisdiction), unless the Issuer is required to withhold or deduct Taxes by law. In that event
(being a Gross-Up Event), the Issuer shall pay such additional amounts (Additional Amounts) as may
be necessary to ensure that the net amount received by each Bondholder after such withholding or
deduction (including any withholding or deduction in respect of any Additional Amounts) shall not be
less than the amount the Bondholder would have received if such Taxes had not been withheld or
deducted.
(b) The Issuer shall not, however, pay Additional Amounts in respect of any Bond:
(i) held by or on behalf of a holder who is liable for such taxes, duties, assessments or
governmental charges in respect of the Bonds by reason of it having some connection with
Spain (other than: (A) the mere receipt, ownership, holding or disposition of Bonds; (B) by
reason of the receipt of any payments in respect of any Bond; or (C) the exercise or
enforcement of rights under any Bonds);
(ii) held by or on behalf of a holder who does not provide to the Issuer or an agent acting on
behalf of the Issuer the information concerning such holder as may be required in order to
comply with the procedures that may be implemented to comply with any interpretation of
Royal Decree 1065/2007 eventually made by the Spanish tax authorities;
(iii) where such withholding or deduction of such Taxes is imposed on a payment to an individual
and is required to be made pursuant to European Council Directive 2003/48/EC on the
taxation of savings income or any law implementing or complying with, or introduced in order
to conform to, this Directive; or
(iv) where any withholding or deduction is required pursuant to an agreement described in Section
1471(b) of the U.S. Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant
to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any
official interpretations thereof, or (without prejudice to the provisions of this Condition 10)
any law implementing an intergovernmental approach thereto.
(c) The Issuer shall: (i) make such withholding or deduction as is required by applicable law; and (ii) remit
the full amount deducted or withheld to the relevant authority in accordance with applicable law.
(d) Any reference in these Conditions to any amounts in respect of the Bonds shall be deemed also to refer
to any Additional Amounts which may be payable under this Condition 10 or under any undertakings
given in addition to, or in substitution for, this Condition 10 pursuant to the Trust Deed.
85
(e) If the Issuer becomes subject at any time to any taxing jurisdiction other than Spain, references in these
Conditions, in respect of payments by the Issuer, to Spain shall be construed as references to Spain
and/or such other jurisdiction.
11. EVENTS OF DEFAULT
11.1 General
Each of the events or circumstances in Conditions 11.2 (Non Payment) to 11.18 (Security Interests) is,
subject to Condition 12 (Remedy Rights), an Event of Default.
11.2 Non Payment
(a) The Issuer does not pay any principal, premium, interest or other amount due and payable by it in
respect of the Bonds and the default continues for a period of five Business Days.
(b) The Issuer does not pay any amount not otherwise described in Condition 11.2(a) which is due and
payable by it under the Trust Deed, any Security Document, the Security Trust and Subordination Deed
or the Account Bank Agreement and the default continues for a period of ten Business Days (or such
longer period as the Bond Trustee may permit) and the failure of the Issuer to pay as aforesaid has or
would be reasonably likely to have a Material Adverse Effect.
11.3 Breach of Financial Covenant
(a) The Historic DSCR as at the relevant Calculation Date as stated in a Compliance Certificate supplied
under Condition 4.6 (Compliance Certificate) is less than 1.05:1, provided that an Event of Default
under this Condition 11.3(a) may be cured by exercise of any Equity Cure Right.
(b) The BLCR as at the relevant Calculation Date as stated in a Compliance Certificate supplied under
Condition 4.6 (Compliance Certificate) is less than 1.10:1, provided that an Event of Default under this
Condition 11.3(b) may be cured by exercise of any Equity Cure Right.
11.4 Breach of Other Obligations
(a) The Issuer does not comply with paragraph (c) of Condition 5.34 (Condition Subsequent).
(b) The Issuer does not comply with any provision of Condition 5 (General Covenants) or any of its other
material obligations under the Finance Documents (other than those referred to in Conditions 11.2 (Non
Payment) and 11.3 (Breach of Financial Covenant) and paragraph (a) above).
(c) No Event of Default under paragraph (a) above shall occur if the failure to comply is capable of
remedy and is remedied within 30 Business Days of the earlier of: (i) the Bond Trustee giving notice to
the Issuer; and (ii) the Issuer becoming aware of the failure to comply.
11.5 Insolvency
(a) The Issuer:
(i) is unable or admits inability to pay its debts as they fall due;
(ii) is deemed, or declared by a court of competent jurisdiction, to be insolvent or unable to pay its
debts as they fall due under Spanish law;
(iii) suspends or threatens (by way of written notice) to suspend making payments on its debts as a
whole generally as they fall due; or
(iv) by reason of actual or anticipated financial difficulties, commences negotiations with its
creditors generally with a view to rescheduling any of its indebtedness.
86
(b) A moratorium is declared in respect of all or substantially all indebtedness of the Issuer. If a
moratorium occurs, the ending of the moratorium shall not remedy any Event of Default caused by that
moratorium.
11.6 Insolvency Event
(a) Any Insolvency Event occurs in respect of the Issuer or, prior to the Full Services Commencement
Date, the Contractor.
(b) Paragraph (a) shall not apply to any Insolvency Event if the same is:
(i) any winding-up petition which is: (A) being contested in good faith by the Issuer or the
Contractor (as the case may be); or (B) frivolous or vexatious and is discharged, stayed or
dismissed within 90 days of commencement or, if earlier, the date on which it is advertised;
(ii) any petition for bankruptcy or winding-up petition where the Issuer or the Contractor (as the
case may be) demonstrates to the reasonable satisfaction of the Bond Trustee (acting in
accordance with Trust Deed), that either: (A) no reason for declaration of bankruptcy of the
Issuer or the Contractor (as the case may be) exists and that the Issuer does not qualify as
being insolvent or unable to pay its debts as they fall due under Spanish law and it has
sufficient funds available to it to meet any liability related to the petition; or (B) the Issuer or
the Contractor (as the case may be) provides the Bond Trustee with an opinion of a reputable
counsel reasonably satisfactory to the Bond Trustee proving to the reasonable satisfaction of
the Bond Trustee (acting in accordance with the Trust Deed) that the petition or filing is
groundless and, in either case, the same is not discharged, stayed or dismissed within 90 days
of commencement or, if earlier, the date on which it is advertised;
(iii) any step or procedure which forms part of a Permitted Transaction; or
(iv) in respect of any action, legal proceedings or step over or relating to assets of the Issuer (other
than any Insolvency Proceedings), the aggregate value of which does not exceed €500,000
(Indexed) (or its equivalent) in respect of the Issuer or €50,000,000 (Indexed) (or its
equivalent) in respect of the Contractor.
11.7 Creditors' processes; attachment
(a) A distress, attachment, execution or other similar legal process is levied, enforced or sued out on or
against any part of the assets of the Issuer and is not discharged or stayed within 90 days provided that
the aggregate amount of assets involved in any such distress, attachment, execution or legal process
equals or exceeds €5,000,000 (Indexed) or its equivalent.
(b) Any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the
Issuer in respect of an obligation, the principal amount of which equals or exceeds €5,000,000
(Indexed) or its equivalent is enforced (including by the taking of possession or the appointment of a
receiver, administrative receiver, administrator manager or other similar person).
11.8 Unlawfulness and Invalidity
(a) It is or becomes unlawful for the Issuer to perform any of its material obligations under any Finance
Document or any Security Interest created or expressed to be created or evidenced by any Security
Document ceases to be effective or any subordination created under the Security Trust and
Subordination Deed is or becomes unlawful and such events continue for 40 Business Days without
remedy.
87
(b) It is or becomes unlawful for the Issuer to perform any of its material obligations under any Project
Document (other than the Concession Agreement) or any such Project Document that ceases to be
lawful or valid.
11.9 Security Trust and Subordination Deed
(a) A Shareholder fails to comply with clause 5.9 of the Security Trust and Subordination Deed.
(b) Other than as pointed in paragraph (a) above, any party to the Security Trust and Subordination Deed
(other than a Secured Creditor or the Issuer):
(i) fails to comply with the material provisions of, or does not perform its material obligations
under, the Security Trust and Subordination Deed; or
(ii) has provided a representation or warranty that is incorrect in any material respect,
and, if the non-compliance or circumstances giving rise to the misrepresentation are capable of remedy,
it is not remedied within 60 days of the earlier of: (A) the Bond Trustee giving notice to the Issuer
and/or that party; and (B) the Issuer and/or that party becoming aware of the non-compliance or
misrepresentation.
11.10 Termination, Repudiation and Rescission of Agreements
(a) The Issuer:
(i) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document;
(ii) evidences an intention to rescind or repudiate a Finance Document; or
(iii) otherwise terminates or purports to terminate a Finance Document.
(b) A party to a Project Document (other than the Authority):
(i) rescinds or purports to rescind or repudiates or purports to repudiate a Project Document;
(ii) evidences an intention to rescind or repudiate a Project Document; or
(iii) otherwise terminates or purports to terminate a Project Document.
(c) Any Finance Document ceases to be in full force and effect or any Security Interest created or
expressed to be created or evidenced by any Security Document or any subordination created under the
Security Trust and Subordination Deed ceases to be legal, valid, binding, enforceable or effective or is
alleged by a party to it (other than a Secured Creditor or the Issuer) to be ineffective.
11.11 Cessation of business
The Issuer suspends or ceases to carry on (or publicly announces an intention to suspend or cease to
carry on) all or substantially all of its business except as a result of a Permitted Disposal or Permitted
Transaction.
11.12 Concession
(a) A Termination Notice is validly served due to the default of the Issuer.
(b) The Concession Agreement ceases to be lawful and valid.
(c) The Issuer abandons the Project.
11.13 Nationalisation
88
(a) The authority or ability of the Issuer to conduct its business is wholly curtailed by any expropriation,
nationalisation, restriction or other action by or on behalf of any governmental, regulatory or other
authority.
(b) The authority or ability of the Issuer to conduct its business is wholly curtailed by any seizure or
intervention by or on behalf of any governmental, regulatory or other authority which has or is likely to
have a Material Adverse Effect as defined in paragraph (b) of the definition thereof.
(c) No Event of Default shall occur under this Condition 11.13 if the events giving rise to an Event of
Default under this Condition 11.13 trigger a mandatory redemption under Condition 7.3 (Mandatory
Early Redemption – Termination Notice).
11.14 Material Proceedings
(a) Any litigation is brought against the Issuer or in respect of its assets or revenues which, in any such
case, has or would be reasonably likely to have a Material Adverse Effect.
(b) The Issuer fails to comply with the requirements of any final non-appealable judgment or award which
equals or exceeds €500,000 (Indexed) or its equivalent.
11.15 Cross Acceleration – Contractor
(a) Subject to paragraph (b) below, any of the following occurs in respect of the Contractor:
(i) non-payment of amounts payable after the expiry of any originally applicable grace period in
respect of any of its Financial Indebtedness in excess of €50,000,000 (Indexed) (or its
equivalent); or
(ii) an amount of its Financial Indebtedness in excess of €50,000,000 (Indexed) (or its equivalent)
is declared, or becomes, due and payable prior to its specified maturity,
in each case, as a result of an Event of Default (howsoever described).
(b) There shall be no Event of Default under paragraph (a) above if the events giving rise to the Event of
Default under this Condition 11.15 arise in respect of the Contractor after the Full Services
Commencement Date.
11.16 Change of Control
A Shareholder transfers its interests in the Issuer otherwise than in accordance with the Concession
Agreement or with the approval of the Authority.
11.17 Full Services Commencement Date
(a) The Full Services Commencement Date does not occur on or before 31 December 2015.
(b) A Funding Shortfall occurs before the Full Services Commencement Date.
11.18 Security Interests
(a) Any Security Interest expressed to be created under the Security Documents is not or ceases to be legal,
valid, binding and enforceable in accordance with its terms.
(b) No Event of Default shall occur under paragraph (a) above if:
(i) the same would not have or not reasonably be likely to have a Material Adverse Effect; or
(ii) a Security Interest is granted which is, in the opinion of the Security Agent, similar in all
respects within 40 Business Days of the same occurring.
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12. REMEDY RIGHTS
12.1 Equity Cure
(a) If a Compliance Certificate delivered under Condition 4.1 (Compliance Certificate) for any period
shows that there is an Event of Default under Condition 11.3 (Breach of Financial Covenant), the
Shareholders may at their sole discretion pay or procure the payment of Additional Equity into the
General Account (and not any other Project Account) in an amount (the Equity Cure Amount) at
least equal to the amount necessary to remedy such Event of Default in accordance with paragraph (d)
(an Equity Cure Right).
(b) An Equity Cure Right may not be exercised:
(i) more than twice in any three-year period;
(ii) more than eight times prior to the Final Discharge Date; or
(iii) in relation to two consecutive Calculation Dates.
(c) Any Equity Cure Amount shall be provided on or prior to the date falling 20 Business Days after the
delivery of the relevant Compliance Certificate (or, if challenged under Condition 4.10 (Challenge and
Review), re-stated Compliance Certificate) setting out that an Event of Default has occurred under
Condition 11.3 (Breach of Financial Covenant) (or, if challenged under Condition 4.10 (Challenge and
Review), re-stated Compliance Certificate).
(d) On payment of the Equity Cure Amount into the General Account in accordance with paragraph (a)
above, the applicable Ratio shall be re-calculated on a pro forma basis, as if the Equity Cure Amount
had been provided:
(i) in the case of the Historic DSCR, at the commencement of the applicable historic Relevant
Period and the interest in respect of the Bonds for the Relevant Period were reduced
accordingly; and
(ii) in the case of the BLCR, at the Calculation Date and reduced the Principal Amount
Outstanding on the Bonds as at that date.
(e) If, after the applicable Ratio is re-calculated pursuant to paragraph (d) above, the breach has been
cured, that Ratio shall be deemed to have been satisfied on the date of the relevant Compliance
Certificate as though no breach had ever occurred and any related Event of Default shall be deemed not
to occur or have occurred, as applicable provided that the Issuer applies an amount equal to the Equity
Cure Amount in mandatory redemption of all or some only of the Bonds in accordance with Condition
7.4 (Mandatory Prepayment – Equity Cure).
(f) For the avoidance of doubt, any Equity Cure Amount provided under this Condition 12 (Remedy
Rights) shall be disregarded for the purposes of determining whether paragraphs (d), (e) and/or (f) of
the definition of Restricted Payment Conditions have been satisfied such that a transfer to the
Distributions Account may be made.
12.2 Replacement Plan
No Event of Default shall occur under:
(a) Condition 11.4 (Breach of Other Obligations) insofar as it relates to Condition 5.24 (Project
Documents);
(b) Condition 11.6 (Insolvency Event) insofar as it relates to the Contractor;
(c) paragraph (b) of Condition 11.8 (Unlawfulness and Invalidity);
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(d) paragraph (b) of Condition 11.10 (Termination, Repudiation and Rescission of Agreements);