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Metro de Panama closes US$2 billion financing for Line 3
Consortium of Korean contractors to build 24.5km project
Michael Marray 25 Aug 2021

Metro de Panama has closed a US$2 billion financing for Line 3 of the urban monorail transport system. The project, with a value of US$2.8 billion, is expected to be completed in four years. It will be built by HPH Joint Venture, a consortium of Korean contractors including Hyundai Engineering & Construction and Posco Engineering & Construction.

The line will run approximately 24.5 kilometres, from Albrook’s terminal station interconnecting with Line1, to the terminal station of Ciudad del Futuro, in the district of Arraijan, West Panama. It will have a total of 14 stations.

The mandated lead arrangers included Citibank, BNP Paribas, Credit Agricole, Mizuho, Santander, SMBC and Export-Import Bank of Korea (Kexim). Korea Trade Insurance Corporation (KSure) provided cover for the project. Lead arrangers included Banco Nacional de Panama, KEB Hana Bank, BBVA and Banistmo. The lenders were advised by Milbank. 

“We are continuing to see tremendous activity in the Latin America transportation infrastructure space, with new financings throughout the region,“ comments Dan Bartfeld, head of Milbank’s global project energy and infrastructure finance group. "We look forward to having a lead role in many of these, regardless of whether they are financed through 144A bonds, private placements, bank loans or ECA/multilateral financings.“

Toll road financing

In another transport sector financing, a complex set of local currency and US dollar loans and bonds was utilized for a road project in Colombia.

The proceeds of the US$746 million financing will be used to develop 153 kilometres of toll roads connecting the Colombian departments of Antioquia and Santander, which were awarded to Autopista Rio Magdalena S.A.S. by the Colombian government under its fourth-generation (4G) toll road programme.

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

According to Latham & Watkins, the financing is the first to include a combination of loans denominated in US dollar and Colombian peso, Unidad de Valor Real (UVR) inflation-indexed loans, and interest rate and currency hedges, all in a single financing structure.

Latham & Watkins represented multiple parties. Goldman Sachs was sole global coordinator, sole bookrunner, initial purchaser, and commitment provider in the offering by P.A. Autopista Rio Magdalena of 915 billion pesos (US$248 million) of 6.05% senior secured series A notes due 2036 (adjusted by reference to UVR). 

Credit facilities

A US$200 million credit facility featured Banco Santander as mandated lead arranger, bookrunner, underwriter, and lender. SMBC and Crédit Agricole Corporate and Investment Bank (CACIB) as mandated lead arrangers and lenders, ICO as lead arranger and lender, and BCP and Siemens Financial Services as arrangers and lenders.

Goldman Sachs and Banco Santander acted as co-underwriters, co-arrangers, co-bookrunners, and co-syndication agents, while Bancolombia and FDN acted as as lenders in the 825 billion peso (US$224 million) tranche of a dual-tranche local credit facility.

Goldman Sachs was 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 278 billion peso (US$75 million) UVR-indexed tranche of a dua- tranche local credit facility.

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

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