Insurer Legal & General has entered a pension scheme buy-in agreement with Heathrow.
A report by the Financial Times said the deal will see the insurance firm not only take on pension liabilities worth £325 million but also lend the airport £160 million through a long-dated, inflation-linked corporate bond.
“We have invested in an asset that matches our liabilities very well,” the report quoted Legal & General institutional retirement chief executive Laura Mason as saying. “Because we’ve been able to structure the asset with the inflation linkage it is valuable to us, so in turn it gives [Heathrow] a better premium.”
Describing the structure as “a neat solution for both parties,” Mason expressed further interest in securing similar deals moving forward.
The pension scheme involves 1,300 members.