Latham & Watkins Advises Itau, KfW, and MetLife in Second-ever International Securitization of Government Receivables for Public Works in Paraguay

Project is the first securitization of Paraguayan government receivables to be structured as a Section 4(a)(2) private placement.

August 10, 2021

Latham & Watkins LLP represented multiple parties in the Paraguayan public works project, including:

  • Itau, as structurer, and a Cayman Islands special purpose vehicle, as purchaser and issuer, in the approximately US$128 million sale and purchase facility to acquire Paraguayan government receivables — Certificados de Reconocimiento de la Obligación de Pago (CROPs) — from the Paraguayan joint venture (Consorcio del Sur) that was awarded the Project; and
  • Itau, as structurer and note purchaser, and KfW IPEX-Bank and MetLife, as note purchasers, in the approximately US$130 million Section 4(a)(2) private placement of notes to fund the purchase of CROPs by the issuer.

The financing package for the project also includes an approximately US$40 million working capital facility under Paraguayan law by a syndicate of local banks.

The project is sponsored by the Paraguayan company Ingeniería de Topografía y Caminos and Spain-based Eurofinsa.

The proceeds of the financing will be used to develop 7.6 km of roads to optimize the transportation infrastructure between the city of Asunción and the southern part of Asunción’s metropolitan area. Following the successful closing of the Bioceanico project in 2019, this is the second public works project in Paraguay to be financed by international investors.

The Latham team was led by corporate partner Gianluca Bacchiocchi, with associates Alejandro Espitia and Fernando Castillo, who are all members of the firm’s Latin America Practice. Partner Elena Romanova advised on tax matters, partner Robin Struve advised on ERISA matters and partners Les Carnegie and Charles Claypoole and associate Elizabeth Annis advised on compliance matters.

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