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Clifford Chance advises on TPL Colombia's landmark inaugural bond offering, the first corporate and high yield debt capital markets transaction out of Latin America in 2019

February 7, 2019

Clifford Chance advises on TPL Colombia's landmark inaugural bond offering, the first corporate and high yield debt capital markets transaction out of Latin America in 2019

A Clifford Chance team led by Capital Markets partner Hugo Triaca represented Bank of America Merrill Lynch and Scotiabank, as initial purchasers, in TermoCandelaria Power Limited's ("TPL") inaugural bond offering, consisting of US$410 million 7.875% senior notes due 2029.

This was the first corporate and high-yield bond issuance out of Latin America in 2019. TPL is the first Colombian thermal power generation company to issue notes in the international capital markets under the Rule 144A / Regulation S format. TPL is the largest non-hydro power generation company in Colombia with 1,283 MW of installed capacity, representing 7.5% of Colombia’s total installed capacity.

The innovative deal features include a combination of full and limited upstream guarantees from operating companies, intercompany loans and a customized amortization schedule beginning in 2021 with a 40% principal balloon payment at maturity. The bespoke deal structure was specifically designed in close coordination among the banks' and the company's international and local advisors, taking into account the ownership structure of TPL's operating subsidiaries and its financing and expansion needs, as well as feedback from the rating agencies.

Capital Markets partner Hugo Triaca was assisted by associate Lane Feler and law clerks Maria Jimena Londoño and Kiara Spoerer. Partner Avrohom Gelber advised on tax matters.

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 initial purchasers, underwriters, issuers 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.