Canadian pension funds consider selling Chicago Skyway bridge lease

The Canada Pension Plan Investment Board and OMERS Infrastructure are considering selling their lease attached to the Chicago Skyway toll bridge, according to people familiar with the matter.

The companies are working with an adviser to solicit an interest in concessioning the 7.8-mile toll road, the people said, requesting anonymity to discuss private negotiations. Any deal is expected to value the asset at more than $4 billion including debt, one of the people said.

C$539 billion ($428.7 billion) CPPIB, C$121 billion from OMERS and C$241.6 billion from the Ontario Teachers’ Pension Plan have agreed to acquiring the lease in 2015 in a $2.8 billion transaction that gave each pension fund an approximate 33.3% stake. OTPP plans to retain its stake, the people said.

“We do not comment on market rumors or speculation,” a CPPIB representative said. OTPP also declined to comment, and OMERS did not immediately respond to a request for comment.

Chicago Skyway was built in 1958 and operated and maintained by the City of Chicago until 2005, when Skyway Concession Co. resumed operations under a 99-year operating lease. The deal marked the first privatization of an existing toll road in the United States, according to Skyway’s website.

Toll roads have been widely favored by infrastructure investment companies, pension funds and sovereign wealth funds, in part due to the predictable nature of cash flows. Elsewhere in the United States, the Indiana Toll Road concession is owned by Australian investors IFM, while Dulles Greenway is owned by Atlas Arteria Ltd.