By Robb M. Stewart

Public Sector Pension Investment Board, one of Canada's largest pension investors, is adding to its portfolio of road assets with an investment of roughly 2.39 billion Canadian dollars ($1.66 billion) in a toll road running through the Toronto area.

PSP Investments will secure a strategic interest in Highway 407 ETR, an all-electronic, barrier-free toll road spanning about 67 miles, buying a 7.51% minority stake from investment management firm Canada Pension Plan Investment Board in a deal that also includes a deferred payment to be made up to 18 months after the deal closes.

The Ottawa-based investor said the deals mark its largest infrastructure commitment in Canada to date. Established in 1999, PSP Investments manages and invests money transferred to it by the government of Canada for the pension plans of the federal public service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force.

PSP Investments said it brings expertise in the transportation sector to the highway investment, which will support the stability and reliability of a road that serves more than 3 million Canadians each week.

The investment is part of a deal that will see AtkinsRealis exit its remaining 6.76% stake in 407 ETR. Infrastructure company Ferrovial will buy a 5.06% interest in the highway for roughly C$2.09 billion, while CPP Investments expects to acquire a 1.7% interest in 407 ETR for C$700 million that would be paid within 18 months.

When the transactions close, Ferrovial will hold a 48.29% interest in 407 ETR, CPP Investments and other institutional investors will have a 44.2% stake and PSP Investments will own 7.51%.

Ferrovial, which has been an investor in 407 ETR since 1999, said the transactions are expected to be completed during the second quarter of the year, subject to the closing of CPP Investments' sale to PSP Investments

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

March 13, 2025 09:46 ET (13:46 GMT)

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