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Latham & Watkins Advises on Major Hybrid Bank/Bond Financing for Colombian 4G Toll Road

June 29, 2021
The project is the first to include a multi-EPC scheme for a 4G toll road, and its approximately US$746 million financing is the first to include a combination of UVR-indexed notes, USD-denominated loans, COP-denominated loans, UVR-indexed loans, and interest rate and currency hedges.

Latham & Watkins LLP represented multiple parties in the multi-source financing for the 4G toll road in Colombia, including: 

  • Goldman Sachs, as sole global coordinator, sole bookrunner, initial purchaser, and commitment provider in the offering by P.A. Autopista Río Magdalena of approximately COP915 billion (approximately US$248 million) of its 6.05% Senior Secured Series A Notes due 2036 adjusted by reference to UVR; 
  • Banco Santander, as mandated lead arranger, bookrunner, underwriter, and lender; SMBC as mandated lead arranger and lender; CACIB, as mandated lead arranger and lender; ICO, as lead arranger and lender; and BCP and Siemens Financial Services, as arrangers and lenders, in a US$200 million credit facility for P.A. Autopista Río Magdalena; and 
  • Goldman Sachs and Banco Santander, as co-underwriters, co-arrangers, co-bookrunners, and co-syndication agents, and Bancolombia and FDN, as lenders, in the approximately COP825 billion (approximately US$224 million) COP-dominated tranche of a dual tranche local credit facility for P.A. Autopista Río Magdalena; and
  • Goldman Sachs, as sole underwriter, sole arranger, sole bookrunner, and sole syndication agent, and Fondo de Deuda Senior para Infraestructura en Colombia CAF-AM Ashmore I, as lender, in the approximately COP278 billion (approximately US$75 million) UVR-indexed tranche of a dual tranche local credit facility for P.A. Autopista Río Magdalena.

The financing also included interest rate and currency hedges provided by Goldman Sachs, Banco Santander, SMBC, and CACIB.

The project is sponsored by Spain-based concession company Aleatica S.A.U., a portfolio company of IFM Global Infrastructure Fund.

The proceeds of the financing will be used to develop 153 km of toll roads connecting the Colombian departments of Antioquia and Santander, which were awarded to Autopista Río Magdalena S.A.S. by the Colombian Government under its Fourth Generation (4G) toll road program.

This novel multi-source financing is new to the Colombian 4G toll road market in that it combines bonds and local currency loans with USD loans and interest rate and currency hedges into a single financing structure. In addition, the innovative multi-EPC scheme, a material EPC dispute involving the concessionaire, and other unique features of the transaction led to a bespoke sponsor support package.

The Latham team was led by New York corporate partner Guido Liniado, with associates Alejandro Espitia and Fernando Castillo, and international visiting associate Joao Assuncao, who are all members of the firm’s Latin America Practice. Partners Roderick Branch, Gianluca Bacchiocchi, Senet Bischoff, Paul Dudek, Stephen Wink, Dana Fleischman, Jonathan Rod, and Joel Trotter also advised on securities matters in connection with the transaction. Partner Elena Romanova advised on tax matters and partner Robin Struve advised on ERISA matters.