Ferrovial jumps after I-24 Tennessee road payment details ease funding fears
FER•Ferrovial shares rose around 8% after the company detailed the payment schedule for its I-24 Southeast Choice Lanes concession in Tennessee. Jefferies said about $7.7 billion of nominal payments are due during construction, below the $24.8 billion concession fee investors feared could fall due before 2035.
1. Payment schedule details
Jefferies said the construction-period payments are well below investor fears that the full $24.8 billion concession fee could fall due before 2035. JPMorgan said the back-end-loaded profile could lift the project's internal rate of return to at least 15%, compared with 11% in its previous base case.
2. Investor and tender concerns
JPMorgan said the share reaction likely reflects improved project economics and the possibility that the payment structure offers a read-across for Ferrovial's I-285 East project in Georgia. It also said the timing of the disclosure may invite scrutiny, as rival bidders are challenging aspects of the tender process. Jefferies said Ferrovial still faces sizeable long-term capital commitments, while shares were on track for their best day in nearly six years.
