MAG raises £300m for capital investment programme

Manchester Airports Group has raised £300m on bond markets to help support its capital investment programme at both Manchester and Stansted airports.

The group’s 22-year bond was three times oversubscribed, and attracted nearly £1bn of investment.

The proceeds will be used to back Manchester Airport’s Transformation Plan, a £1bn programme of work which includes an expansion of Terminal 2 to turn it into the airport’s primary terminal building; and improvement works to Terminal 3 to increase capacity.

Main contractor Laing O’Rourke is also working to build enlarged airside transfer facilities, including a direct link between Terminals 2 and 3. Work started on the project this summer.

MAG will use some of the proceeds to start the first phase of its transformation works at London Stansted, which includes a complete reconfiguration of its current terminal into a dedicated departures building, ahead of a new arrivals building to be built alongside. Planning approval for the new £130m terminal was secured in April this year.

Neil Thompson, chief financial officer for MAG, said: “The success of the bond is a testament to the strong financial performance of the group over the past 3 years, which has delivered over 40% earnings growth, and demonstrates the confidence of a wide number of UK and international blue-chip investors in MAG’s future growth strategy.

“Manchester and London Stansted airports both provide vital international connectivity for the UK with the Group operating routes to over 280 destinations.

“Our plans for significant investment at Manchester and Stansted will not only improve the experience for passengers and airlines using our airports but also provide the foundations to unlock their significant future growth potential.”

MAG used NatWest Markets as arranger and bookrunner on the transaction, alongside Barclays and BNP Paribas who also acted as bookrunners. Co-managers were CIBC, Handelsbanken, MUFG and NAB.