Monday 07 December 2015 by Alen Golubovic Company updates

PPP provider Praeco bonds now available to retail investors

FIIG is pleased to offer the Praeco fixed rate bond with a call date of 28 July 2020 and the Praeco indexed annuity bond maturing on 15 August 2020 to retail investors

Defense aircraft

The bonds are currently offered at indicative yields to maturity of 5.2% and 2.3% (real) respectively, and both offer good value given the investment grade credit rating. The minimum parcel size is $10,000.

Praeco is the special purpose vehicle which was contracted under a public-private partnership (PPP) arrangement to build and maintain the Australian Department of Defence headquarters. Praeco is owned by IFM Infrastructure Funds (‘IFM’), an experienced Australian infrastructure investor. IFM is a leader in infrastructure investing on behalf of institutional investors globally, with a 20 year track record. It currently holds A$25 billion in infrastructure equity assets under management diversified across every infrastructure subsector. IFM holds interests in 30 infrastructure companies across Australia, North America and Europe and has interests in other PPP assets including Civic Nexus.  

The project construction has been completed and the project is now in the low risk operational phase which will continue until 2036. At that time the assets will revert back to the Commonwealth Government. Revenues for the project come in the form of a monthly service payment from the Australian Commonwealth Government. This payment is partially fixed and partially indexed. The fixed portion covers the return on debt and equity capital and the indexed payment covers other costs including the provision of maintenance services.

Follow the links for research factsheets for the Praeco fixed rate bond and indexed annuity bond.

Please note pricing is indicative only and subject to change. Please contact your FIIG representative for more information or if you are interested in investing in Praeco bonds.

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