Leading independent infrastructure manager Whitehelm Capital (“Whitehelm”) has closed its investment in a junior loan issued by Kelda Finance (No.2), the first holding company of Yorkshire Water. Yorkshire Water is the fifth-largest water and sewerage company in the UK by both Regulatory Capital Value and number of customers served.
Whitehelm invested £45 million (c. A$79 million) in the transaction on behalf of its investors, out of a total junior loan size of £145 million. The transaction follows the £50 million (c. A$88 million) commitment to an acquisition loan issued by a leading UK Meter Asset Provider in April 2017.
These transactions bring Whitehelm’s investments in infrastructure debt to date to nearly £900 million (c. A$1.5 billion), with an internal rate of return (IRR) of more than 10% and a history of no defaults or restructurings. Whitehelm focuses on investing in debt issued by defensive, non-cyclical infrastructure companies, targeting sectors that serve as the backbone for the provision of essential services such as water, gas, electricity, and transport.
Alexander Waller, Head of Infrastructure Debt, Whitehelm Capital, said
“Whitehelm is pleased to support Yorkshire Water’s junior debt package. Yorkshire Water is one of the UK’s leading water and sewage companies, and another great addition to Whitehelm Capital’s portfolio of credit investments in high-quality core infrastructure businesses.”
“High-yield infrastructure debt continues to offer an excellent return compared to senior debt and big-ticket infrastructure equity. The return compression that has been evidenced in other parts of the infrastructure market has increased the relative attractiveness of high yield infrastructure debt – where we continue to see a strong pipeline of compelling opportunities.”