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Clifford Chance advises on landmark transaction by EPM

August 6, 2019

Clifford Chance advises on landmark transaction by EPM

A Clifford Chance team led by Capital Markets partner Hugo Triaca represented Empresas Públicas de Medellín E.S.P. ("EPM"), the leading multi-utility services company in Colombia, on (i) an any and all cash tender offer (the "Tender Offer") directed to holders of EPM's Ps.-denominated 8.375% Senior Notes due 2021 (the "2021 Notes"), and (ii) a dual-tranche offering of (a) Ps.1,230,000,000,000 aggregate principal amount of 8.375% Senior Notes due 2027 (the "Ps. Notes") and (b) U.S.$1,000,000,000 aggregate principal amount of 4.250% senior notes due 2029 (the "U.S.$ Notes," and, collectively with the Ps. Notes, the "New Notes").

This landmark transaction, EPM's first dual-tranche offering and its largest of five issuances in the international capital markets, allowed EPM to extend the maturity profile of its indebtedness. The Tender Offer was the first one for a Colombian Ps.-denominated security.

EPM used the proceeds from the New Notes offering to (i) pay the consideration in respect of the Tender Offer and (ii) prepay certain existing indebtedness. A total of Ps.1,119,178 million aggregate principal amount of the 2021 Notes, representing 89.53% of the aggregate principal amount of the 2021 Notes, were tendered in the Tender Offer and repurchased by EPM. The New Notes were offered and sold in the United States to qualified institutional buyers only, in accordance with Rule 144A, and outside the United States to non-US persons in accordance with Regulation S under the US Securities Act of 1933. The New Notes were listed on the Official List of the Luxembourg Stock Exchange.

EPM provides electricity generation, electricity transmission, electricity distribution, gas distribution, water, sewage and solid waste management services in Colombia. EPM also (i) provides electricity transmission, distribution and commercialization services through subsidiaries in El Salvador, Guatemala and Panama; (ii) is involved in electricity generation activities through subsidiaries in Chile and Panama; and (iii) provides water, water reuse and waste water management services through subsidiaries in Chile and Mexico. EPM is owned by Medellín, Colombia’s second-largest city.

Capital Markets partner Hugo Triaca was assisted by associates Mariana Estevez and Nicolas Ocampo. Partner Avrohom Gelber and associate Dan Borchert advised on tax matters.