Latham & Watkins represented Goldman Sachs & Co. LLC as the sole global coordinator, bookrunner, initial purchaser, and commitment provider in Chile Electricity PEC SpA’s US$489 million offering of its Series 2021-1 Zero Coupon Senior Secured Notes due 2028. Chile Electricity PEC SpA. is a special purpose vehicle incorporated under the laws of Chile that will use the net proceeds of the offering to purchase certain electricity tariff receivables from AES Gener S.A., Colbún S.A., Enel Generación Chile S.A., Enel Green Power Chile S.A., Engie Energía Chile S.A., Eólica Monte Redondo SpA and Guacolda Energía SpA. The receivables originate pursuant to Chilean Law No. 21,185, which temporarily stabilized the electricity tariffs that distribution companies are permitted to charge their regulated customers in response to the social unrest that began in Chile in October 2019.
The offering represents the first of several debt financings expected to be raised under a sophisticated structure designed to accommodate multiple tranches that will allow the sellers to monetize existing and future receivables generated under the tariff stabilization mechanism. In addition to the financing commitment of Goldman Sachs, the sellers obtained a financing commitment from IDB Invest.
The Latham team was led by New York corporate partners Gianluca Bacchiocchi and Guido Liniado.
Bacchiocchi said: “This was the first tariff stabilization bond financing in Latin America and one of the most complex financings we have worked on in the region as it brought together multiple parties, a novel legal structure behind the receivables and the creation of the first Chilean special purpose vehicle for an international securitization.”
Liniado said: “We are delighted to once again represent Goldman Sachs and to work with IDB Invest and the major Chilean generation companies in the creation of this innovative financing structure. The ability to tap into the 144A/Reg S bond, 4(a)(2) private placement and loan markets through a single financing structure is expected to draw interest from multiple players and reduce the cost of funds.”