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Clifford Chance advises on Colombia's first private initiative project to be financed internationally

22 December 2017

Clifford Chance advises on Colombia's first private initiative project to be financed internationally

Transaction solidifies Firm's leading position as international legal advisor for 4G financings.

Clifford Chance advised Goldman Sachs and a group of Colombian lenders on the approximately US$708 million (debt and equity) multisource financing for the construction of the 4G ("Fourth Generation") Antioquia-Bolívar highway in Colombia, also known as Ruta al Mar. This transaction is the seventh 4G project financing handled by the Firm out of eight that have obtained international financing.

The financing of Ruta al Mar breaks new ground in Colombia as the first private initiative to obtain international financing under the 4G program. The project being developed by Construcciones El Cóndor as an unsolicited proposal is not supported by government contributions (vigencias futuras) or traffic top-up payments (diferencias de recaudo), in contrast to the other toll road projects financed to date under the 4G program. Nevertheless, the financing structure allowed the bonds and loans to achieve investment grade ratings by both Moody's and Fitch.

This transaction also marks the first financing of Colombian infrastructure following the lava jato scandal in Brazil that cast a shadow over the infrastructure sector throughout Latin America. As a result of the scandal, no other Colombian international infrastructure financings were closed in 2017.

"We are pleased to support Goldman Sachs in an important transaction that will lead to the re-opening of Colombia's infrastructure financing market after more than a year's hiatus," said Clifford Chance senior associate Guido Liniado.

In addition to Goldman Sachs acting as arranger and initial purchaser, Clifford Chance also advised the syndicate of Colombian lenders that provided the bank financing. With their involvement in Ruta al Mar, FDN, Bancolombia and the CAF-AM Ashmore Debt Fund were instrumental to the success of the transaction.

In 2016, Clifford Chance worked with Goldman Sachs in arranging the approximately US$800 million (debt and equity) financing for the Pacifico Tres toll road, which was also sponsored by Construcciones El Cóndor, and the approximately US$600 million (debt and equity) financing for the Costera toll road. Pacifico Tres and Costera were the first two 4G projects to obtain international capital markets financing as part of a multisource and multicurrency structure that included a Colombian peso denominated bond. On the back of those projects, Ruta al Mar is also structured as a multisource financing, with three loan tranches and a Colombian peso denominated bond. Notably, interest from investors signaled a continuing global appetite for local currency denominated instruments indexed to inflation.

The Firm's team included Banking & Finance partner Gianluca Bacchiocchi, Capital Markets partner Jon Zonis, senior associate Guido Liniado, who led the transaction, associates Luis Maria Clouet and Mariana Estévez and law clerk Paula Mariel Ferreira.

Clifford Chance has been recognized for decades as a preeminent law firm in Latin America, renowned for successful, novel financing structures and its signature ability to drive innovation across the entire region. The Firm's dedicated Energy & Infrastructure team is comprised of bilingual and culturally fluent lawyers who understand Latin America's distinct business, legal and regulatory landscapes, as well as the evolving needs of a diverse client base. The group works seamlessly across practices on matters involving project development and the delivery of cutting-edge finance and capital markets structures. Uniquely, the team is adept at developing sophisticated, multisource financings, both through project-finance and –bond structures and securitization schemes that involve a combination of commercial banks, multilateral lending agencies and the bond markets. The Firm is currently working on groundbreaking financings in Paraguay and Argentina, and continues to lead the way in Colombia and Peru.