August 6, 2019
- Gianluca Bacchiocchi, Megan Gordon, José Guardo, Catherine McCarthy, Jiahua Ni, Catherine Ennis, Greg Kahn, Jacqueline Landells, Luis Maria Clouet, Icy Li, Laura Marriott, Eduardo Sánchez, Julian Hurtado Vallejo
- New York
Clifford Chance advises on Colombia's first private investment made by a Chinese construction company in a 4G toll road project
Clifford Chance advised a consortium led by China Harbour Engineering Company Limited ("CHEC") in connection with the approximately US$658.2 million multicurrency financing of the Concesión Autopista al Mar 2, a toll road project in Colombia ("Mar 2"). The financing is the first private investment made by a Chinese construction company under Colombia's 4G highway infrastructure program, and also marks the first financing made by China Development Bank ("CDB") under the 4G program. The program seeks to modernize Colombia’s highway system by improving existing roadways and constructing approximately 7,000 kilometers of new roads.
The Mar 2 project, a 254 kilometer toll road that will run from Cañasgordas to Necoclí in the Antioquia region of Colombia, is being developed by special purpose company Autopistas Urabá SAS, which is owned jointly by CHEC, China Harbour Concessions Company (Bermuda) Limited, China Harbour Concessions Company, S.L.U., SP Ingenieros SAS, Unidad de Infraestructura y Construcciones Asociadas SAS and Termotécnica Coindustrial SAS.
The financing consists of a US$501.7 million senior dollar credit facility provided by CDB and Sumitomo Mitsui Banking Corporation and a COP500.0 billion senior Colombian peso facility provided by Colombian state development bank Financiera de Desarrollo Nacional ("FDN"). The complex financing structure also involved currency hedges and approximately COP132.5 billion of EPC performance insurance.
“This is a great example of the Firm's cross-border strength and the value our integrated Latin America Group can provide, including as a result of our pioneering work in Colombia's 4G program," said Banking & Finance partner Gianluca Bacchiocchi. "Our deal team conducted negotiations in English, Spanish and Mandarin to strike the right balance for lenders and sponsors in addressing a multitude of challenges."
"Notably, the Mar 2 deal represents a first-time collaboration between CDB and FDN in a 4G project financing. It was designed to provide flexibility for the borrowers and sponsors, while affording customary protections to the banks to ensure repayment of the debt," Bacchiocchi said.
Lead associate Luis Maria Clouet said, "Over the past decade, China's increasing focus on investments in Latin America has been a positive trend. We are pleased to support CHEC in a landmark transaction that may unlock future deals to continue this progress in meeting the region's infrastructure needs."
The Firm's team, led by Bacchiocchi, included Clouet and associates Julián Hurtado Vallejo and Laura Loaiza in New York; Banking & Finance partner Kate McCarthy and associate Laura Marriott in Washington, DC; Finance partner Jiahua Ni and associate Icy Li in Beijing; and Banking & Finance partner Jose Guardo and associates Eduardo Sánchez Roldán and Gabriel Miranda in Madrid. Litigation partner Megan Gordon, along with counsels Jacqueline Landells and Catherine Ennis, advised on sanctions and anticorruption-related provisions, and Capital Markets counsel Greg Kahn advised on the NY-law hedges.
Clifford Chance has been recognized for decades as a preeminent law firm in Latin America. 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.
The Firm has wide-ranging experience advising on toll road transactions in Latin America, and is uniquely experienced in guiding clients through the various financing structures and regulatory frameworks involved in long-term concessions in Latin America. Clifford Chance has been at the forefront of the Colombian 4G program, having acted in more 4G project financings – including the Pacifico Tres, Costera, Perimetral and Alto Magdalena toll road projects – than any other international law firm.