7 September 2018
Clifford Chance advises on Innovative Hybrid Bond/Loan Refinancing for Four Transmission Lines in Northern Peru
Clifford Chance's Madrid and New York offices advised Natixis and certain of its partners (as Senior Lenders) and American General Life Insurance Company (AIG), Pacific Life Insurance Company (Pacific Life) and Metropolitan Life Insurance Company (MetLife) and certain of their affiliates (as Note Purchasers) on an innovative refinancing transaction relating to the Carhuaquero – Cajamarca Norte – Cáclic – Moyobamba Nueva transmission line project in Northern Peru.
The project consists of four transmission lines and four substations spanning the Peruvian departments of Cajamarca, Amazonas and San Martín, and covering 371 km. The sponsor of the project, Madrid-based Bow Power, is a joint venture ultimately owned by the ACS Group and Global Infrastructure Partners, two global infrastructure leaders combining more than US$40 billion in revenues in recent years.
The innovative refinancing structure consisted of (i) a US$75.3 million fixed/floating-rate senior secured term loan facility and (ii) a US$99.5 million aggregate principal amount of senior secured notes sold pursuant to a 4(a)(2) private placement. Both the notes and the loan facility have a 29-year maturity and are secured by a pledge or assignment of all of the concessionaire's assets and rights to a collateral agent located in Peru. The dual bond/loan refinancing structure allowed the sponsor of the Project to tap into different pockets of liquidity and ultimately achieve a competitive rate for both the loan facility and the notes. The transaction was priced on August 27 and closed on September 6, 2018. For Natixis, which acted as sole bookrunner and placement agent, this was its first-ever private placement in Latin America.
Madrid partner José Guardo and New York partner Hugo Triaca led a cross-border Clifford Chance team that engaged with lenders and investors located in three continents. The Firm's team included, in Madrid, associates Marta Ruiz Manrique de Lara and Eugenio Fernández-Rico Núñez and, in New York, associates Alejandro Espitia, Nicholas Loukides and María Jimena Londoño. Tax matters were handled by partner Avrohom Gelber, and ERISA matters were handled by counsel Paul Koppel.
Clifford Chance has been recognized for decades as a preeminent law firm in Latin America. The Firm has led the way in developing successful, novel financing structures for a diverse client-base, and is constantly innovating its service offering, such as with a dedicated Latin America group specialized in capital markets, bank and project financing structures representing issuers, initial purchasers, underwriters and investors. The Firm's lawyers have extensive experience in the region's distinct business, legal and regulatory landscapes. They provide expertise that cuts across a full range of relevant practices, while aligning pioneering solutions with the unique characteristics of the Latin American market and the changing needs of clients.