Is Indiana Toll Road Operator's Parent Macquarie Bank Stable?

The Indiana Toll Road
toll booths at the I-65 Exit in Gary.

Did the fallout from the sub-prime mortgage market collapse destroy the financial underpinnings of Macquarie Bank -- the company that leased the Indiana Toll Road and the Chicago Skyway with Spanish corporation Cintra? The bank says their financial model is "robust."

News.com.au reports that Fortune magazine has a report about Macquarie Bank set for publication. Hat tip to Taking Down Words for spotting the article.

Fortune's interest in Macquarie follows the bank's move into the US infrastructure securitisation market, which is relatively undeveloped and has become politically controversial.

Macquarie and Spanish company Cintra did the first privatisation of a US toll road in 2004, when they offered $US1.8 billion for a 99-year lease on the Chicago Skyway toll road, paying almost $US1 billion more than the next highest bid.

They followed up with a $US3.8 billion deal to run the connecting Indiana Toll Road.

The article notes that, as the concept of infrastructure privatisation gets off the ground in the US, "there is widespread resentment and cynicism about the notion of private companies making money off what has long been perceived as public property".

The article suggests that the "financial structures underpinning Macquarie's assets" may be "as unstable as the steel that supported the Interstate 35W bridge" in the US, which recently collapsed.

Macquarie chief executive Allan Moss told analysts on Friday that many recent criticisms of the bank had been made by people who had "not taken the trouble to study Macquarie Bank" closely.

"They are not views that have been given any serious credit by serious investors or serious analysts," he said.

"It is well understood that we have a very robust business model."

Copyright 2007, Christopher Hedges .com, All Rights Reserved.

Macquarie Bank Cintra Indiana Toll Road Indiana Toll Road Operator Chicago Skyway