Latham & Watkins LLP represented BTG Pactual and Santander as joint bookrunners, and Santander as social bond structuring agent, in the offering by Patrimonio Autónomo Montes de María of COP$760 billion (approximately US$209 million) of its 4.1% Senior Secured UVR Indexed Notes due 2045. The proceeds of the notes will be used to refinance existing debt and complete the construction of the Puerta de Hierro – Palmar de Varela y Carreto – Cruz del Viso toll road awarded to Sociedad Concesionaria Vial Montes de María S.A.S. by the Colombian Government under its Fourth Generation (4G) toll road program. The project is sponsored by Spanish construction and concession conglomerate Sacyr.
This is the first bond in Latin America to be guaranteed by the US International Development Finance Corporation (DFC). The DFC guaranty was counterguaranteed by Assured Guaranty (AG).
It is also the first social bond for an infrastructure project in Latin America. The bond is aligned with the 2020 Social Bond Principles (SBP) administered by the International Capital Market Association (ICMA).
The Latham team was led by New York corporate partner Guido Liniado, with associates Giancarlo Reanda and Alejandro Espitia, who are all members of the firm’s Latin America Practice.
Liniado said: “We are thrilled to have worked with BTG, Santander, DFC, AG, and Sacyr in this ground-breaking transaction. As with all first-of-their-kind transactions, there were multiple challenges – from structuring DFC’s US dollar financial guaranty to adequately cover the long-term local currency notes and allow the rating of the notes to pierce through the rating of the sovereign, to balancing the interests of the guarantor and the noteholders, to working through the alignment of the issuance to the SBP. In line with Latham’s commitment to provide comprehensive advice on the entire spectrum of Environmental, Social and Governance (ESG) issues, we are proud to contribute to the expansion of ESG initiatives into the infrastructure sector in Latin America. We believe this transaction will provide the foundation for many more DFC-guaranteed project bonds to come in the region.”