February 11, 2022
A multi-disciplinary team advised on the approximately US$906 million multi-source refinancing and dividend recapitalization. This novel financing is the first in Colombia to include a project-level letter of credit facility to collateralize reserve accounts rather than cash-fund them. It is also the largest-ever 4G financing and represents the first investment by the IDB Group in a local currency-denominated project bond. Additionally, the financing is the second social bond for a 4G project (Latham also acted on the first) and the second to combine international bonds with local currency loans, USD loans, and interest rate hedges into a single structure (Latham also acted on the first).
Latham & Watkins LLP represented multiple parties in the transaction, including:
- Goldman Sachs and J.P. Morgan as:
- Joint global coordinators, joint bookrunners, and initial purchasers in the offering of approximately US$262 million (COP-equivalent) of 6.660% Senior Secured Series 2022-1 UVR Indexed Social Notes due 2041
- Joint bookrunners in the following credit facilities:
- An approximately US$305 million international dual-tranche term loan and letter of credit facility
- An approximately US$260 million (COP-equivalent) local term loan and letter of credit facility
- An approximately US$79 million (COP-equivalent) local revolving liquidity facility
- JPMorgan Chase Bank as joint bookrunner and tranche B lender; MUFG, SMBC, and Societe Generale as mandated lead arrangers, tranche A and B lenders, and letter of credit lenders and issuers; CACIB as mandated lead arranger, tranche A lender, and letter of credit lender and issuer; and Siemens Financial Services as manager and tranche A lender under the international credit facilities
- FDN, Bancolombia, and Banco Davivienda as lenders under the local credit facility
- JPMorgan Chase Bank, MUFG, SMBC, Societe Generale, and CACIB as providers of an interest rate hedge
The local revolving liquidity facility was provided by Compartimento A del fondo de capital privado FCP Deuda Infraestructura II Sura - Credicorp Capital.
The project is co-sponsored by the concession arms of Spain-based conglomerate Sacyr and Ecuadorean company Sudinco. It was awarded by the Colombian government under its Fourth Generation (4G) toll road program and comprises the construction, operation, and maintenance of approximately 83 km of toll roads in the Department of Nariño.
The Latham team was led by New York corporate partner Guido Liniado, with associates Fernando Castillo, Giancarlo Reanda, and international visiting associates Javier Constanzo and Joao Assuncao, who are all members of the firm’s Latin America Practice. Partners Roderick Branch, Gianluca Bacchiocchi, and Paul Dudek advised on securities matters. Partner Carlos Alvarez and counsel Brett Ackerman advised on derivatives matters, with associate Jackie Rugart. Partner Elena Romanova and associate Ted Gkoo advised on tax matters. Partner Robin Struve and counsel Aryeh Zuber advised on ERISA matters. Partner Laura Ferrell, counsel Pia Naib, and associates Jennifer Tian and Paige Tapp advised on investment company matters.