22 June 2015
- Gianluca Bacchiocchi, Jonathan Zonis, Cliff Cone, Anja Pfleger Andrade, Jeffrey Susskind
- New York, Washington D.C., São Paulo
Clifford Chance advises on the financing of Peru's first subway project
Clifford Chance acted as New York counsel to Metro de Lima Linea 2 S.A., as concessionaire, and a consortium — formed by ACS-Iridium and Vialia-FCC of Spain; Salini Impregilo, Ansaldo STS and AnsaldoBreda of Italy; and Cosapi of Peru — as Sponsors, in the US$1.15 billion bond financing of the Line 2 of the Lima and Callao Metro project in Peru. The deal will partially finance Peru's very first underground metro, and its total cost of US$5.3 billion makes it one of the most ambitious infrastructure projects ever to be undertaken in Latin America. The offering closed on June 17, 2015.
The transaction is noteworthy for its use of a 144A/Reg S securitization of governmental payment rights named "RPI-CAOs" — it is the largest RPI-CAO securitization to date in Peru's history. Furthermore, the project is the largest in a series of infrastructure projects awarded by Peru with compensation mechanisms through RPI-CAOs or similar payment rights that represent unconditional and irrevocable obligations of the Peruvian Government.
Clifford Chance is simultaneously advising the concessionaire and the consortium in the finalization of its complete financing plan for the project, which should be completed through the closing of three additional financing transactions during the course of 2015.
The team advising on these transactions is led by partner Gianluca Bacchiocchi and associate Diego Harman, both in New York, with assistance from Jonathan Zonis, Jay Gavigan, Clifford Cone and Carlos Arata (New York); Martin Menski (Washington, D.C.); and Anja Pfleger, Jeffrey Susskind and Will Green (São Paulo).
The successful offering marks the third Peruvian project with equivalent "quasi-sovereign" compensation mechanisms closed by members of the aforementioned team this year. It follows the US$237 million bond offering for the Red Dorsal Nacional de Fibra Optica telecommunications project announced in April 2015 and the US$200 million credit facility for the Longitudinal de la Sierra – Tramo 2 toll road completed last month.
Members of the firm's Latin American practice have extensive experience advising on capital markets transactions in Peru, Latin America and around the world, making them very familiar with the regulatory framework, legal practices and financings involving these long-term concessions or leases in Peru and Latin America. Team members have advised on many of the region’s most historic infrastructure transactions, including the IIRSA Toll Roads, Huascacocha and Taboada Water Projects, EsSalud Hospitals transaction and Lima Airport in Peru.