Clifford Chance

Clifford Chance Advises FDN on the Creation and Negotiation of an Innovative Credit Line to Facilitate Lending in Colombian Pesos by International Financial Institutions

Clifford Chance acted as New York counsel to the Colombian development bank Financiera de Desarrollo Nacional S.A. ("FDN") (as lender) in connection with the structuring and negotiation of a New York law-governed COP600 billion (approx. US$220 million) loan facility to the Inter-American Investment Bank ("IDB") and the Inter-American Investment Corporation ("IDB Invest").

Extending credit to IDB and IDB Invest marks a milestone in the implementation of a newly created product to allow international institutions to finance Colombian infrastructure projects in local currency. This feature greatly reduces the currency risk for participating financiers, which FDN expects will promote foreign investment in local projects. Particularly, FDN's new facility is expected to have a positive impact in the financing on a number of corridors in the 4G toll road program, several of which will need financing in 2018 alone.

This credit facility – FDN's first COP-denominated loan governed by New York law – is structured to give IDB and IDB Invest flexibility to lend to a wide range of infrastructure projects under a single credit agreement. Specifically, the bilateral credit agreements with IDB and IDB Invest, respectively, allow the borrowers to request multiple sub-loans with different principal amounts, interest rates and maturity dates, among other, without having to enter into a separate contract with FDN on each request. These agreements with IDB and IDB Invest are expected to set the stage for other international institutions to use the same product to lend in Colombian pesos.

Clifford Chance's international team was led by partner Epifanio Pérez (Madrid) and associate Alejandro Espitia (New York). Partner Daniel Winick and associates Andrew Young and Andrés Berry provided New York-law support.

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 Mexico, Colombia, Uruguay, Central America and Peru.