The £1.2 billion securitization of future government payments to the infrastructure consortium mandated to upgrade and maintain the London Underground network is set to be priced next month. The Metronet deal is being lead-managed by Deutsche Bank, Royal Bank of Scotland and UBS Warburg and will feature monoline wraps from AMBAC Asset Assurance and Financial Security Assurance, thus garnering a triple-A rating. It will be launched "sooner rather than later," unless some unforeseen legal problems arise, according to a banker involved in the deal. This banker
expects the offering to go smoothly because he says there is pent-up demand for long-dated sterling paper.
Cash raised through the Metronet deal will be used to fund the huge investment needed to refurbish the Underground. The handing over of responsibility for the London Underground's maintenance, through a so-called Public Private Partnership (PPP), has been the subject of much controversy in the U.K. over the past months. The fiercest opponents of a PPP plan for the London Underground have been London's Mayor Ken Livingstone and his Transport Commissioner, Bob Kiley.