Playing a key role in supporting UK supply chains

Forth Ports is the third largest port group in the UK and the largest in Scotland, with seven of the group’s eight ports located there.

The Port of Tilbury, London’s major port, is the largest within Forth’s portfolio, handling 14 million tonnes of cargo per annum. Forth Ports Grangemouth is Scotland’s largest port handling 7 million tonnes of cargo each year through specialist container, liquid, and general cargo terminals. This cargo flow represents as much as 30% of Scotland’s gross domestic product (GDP).

The group’s ports are home to some significant manufacturing and distribution sites for – amongst others – the agriculture, food and drink, energy, waste, forest product, paper and packaging and construction sectors. The ability for these customers to undertake value-add activities within the ports, co-located with others in their supply chains and proximity to end markets means reduced handling and transportation costs – driving cost and environmental efficiencies to make supply chains more resilient, whilst reducing the carbon footprint.

Most recently Forth is establishing itself as a key provider of port infrastructure for offshore wind deployment, with investment in excess of £100 million at its ports in Dundee and Leith.

Private Rating delivers meaningful capital uplift for investors

An existing Private Placement (PP) issuer, Forth Ports returned to the market to refinance £160 million of upcoming maturities, and mandated NatWest to support the transaction in the role of Sole PP Agent and Ratings Advisor.

NatWest guided the company in their selection of the rating agency, developed comprehensive materials to position the credit story, and prepared senior management for the ratings meetings. The rating process resulted in a strong rating outcome, which opened the door to new investors to support demand for this issuance and ongoing access to the PP market.

Following the rating, Forth announced a £160 million issuance after the market’s annual industry conference, a period when the market typically offers a strong environment for new issuance. To familiarise investors with its credit story, Forth undertook a full US and London roadshow, which also allowed the company to highlight its strong performance through multiple economic cycles.

The direct investor engagement proved worthwhile, with bids for the PP representing a 7.5 times oversubscription. Leveraging the strong orderbook, NatWest and Forth were able to achieve competitive pricing and Forth decided to upsize to £275 million. Forth sought a delayed draw to minimise cost of carry given an upcoming maturity later in 2023 being refinanced with this issuance. With the strong demand, Forth was able to secure tranches with 6-month and 12-month delays at attractive levels – an exceptional outcome given the current global rates backdrop and trajectory.

What’s more, Forth added six new names to its existing investor base, providing a diverse base of investors for future financing needs.

NatWest is first port of call for UK ports sector

With this transaction, NatWest has completed its fourth financing for the ports sector in the Private Placement market over the past twelve months, making it the only agent to have supported on all syndicated financings from the UK ports sector over this period.

PP transactions for the UK port sector supported by NatWest include:

• In February 2022, a £350 million (equivalent) Private Placement for Peel Ports Group, the second largest port group in the UK, handling over 70 million tonnes of cargo per year and routing 15% of the UK’s total port traffic through its waters. Amongst other locations, Peel Ports operate as the Statutory Harbour Authority for the Port of Liverpool, the Manchester Ship Canal, and the River Medway.

• In November 2022, a £100 million (equivalent) Private Placement for Associated British Ports (ABP), the UK’s leading port owner and operator, with a network of 21 ports, handling around a quarter of the UK’s seaborne trade, and in January 2023 following up with another £100 million issuance. 

NatWest a trusted partner to the UK infrastructure sector

Charles Hammond, Forth Ports’ CEO, commented: “We are very pleased to have achieved an extremely strong outcome for our private placement. The funds will not only allow us to refinance upcoming maturities but will also go towards further investments in supply chain solutions for our customers, whilst supporting the UK’s transition to net zero with the additional capital raised helping with our exciting investment plans for offshore wind. We thank NatWest for their outstanding support delivered throughout this process.”

Carole Cran, Forth Ports’ CFO, added: “We are very pleased with the strong investor support we have received, and we are excited to welcome new investors. We thank the NatWest team for their insights and expertise throughout the rating process and all the hard work that culminated in the favourable pricing.”

Sonia Gadhia, Director, Private Placements, NatWest, said: “We are delighted to have been able to support Forth Ports with this private placement, also providing ratings advice and interest rate risk management services, allowing them to expand their investor base and achieve very attractive terms against a volatile global rates backdrop. This transaction also represented the NatWest PP team’s fourth financing for a UK port operator within the last twelve months. This issuance is yet another example of multiple specialist teams within NatWest working closely together as one bank to deliver the best outcome for our customers.”

Simon Jenkins, Director, Transport Coverage & Sector Content, NatWest said: “We are very proud to have been trusted by the UK’s three largest port operators to support them in raising a combined £825m (equivalent) from the Private Placement market over the last 12 months. Ports are integral to the prosperity of the UK, facilitating trade and supporting industry and the communities in which they operate. Ports are also playing a significant role in accelerating the development of the UK’s transition energy sectors. We look forward to continuing to develop our partnerships across the ports industry to support further growth and deliver our share climate ambitions. 


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