LatinFinance - July/August 2016 - 6

Project finance loans are taking center stage in Latin America
as developers seek financing for toll roads in Colombia and
natural gas pipelines in Mexico. By Mick Bowen

NEWS
LOANS

Funding the gap
Infrastructure developers
across the region are looking
to banks for financing, with
toll roads in Colombia and
natural gas pipelines in Mexico
particularly prominent. While
some projects, such as the
Pacífico 3 highway concession
in Colombia, have obtained
a combination of loans and
bonds, many others are seeking
bank debt, at least during the
construction stage.
Colombian toll road operator
Alto Magdalena, or Alma,
plans to close an all-loan
package for the Autopista
Girardot-Honda-Puerto
Salgar by the end of July. The
$350-million deal, structured
by Goldman Sachs, will include
financing in dollars and pesos
from both local and foreign
banks. Two of the project
sponsors, local developer
Mario Huertas Cotes and
Costa Rican builder Meco, have
worked with Goldman Sachs on
two other 4G road concessions.
But those deals, Pacífico 3
and Autopista CartagenaBarranquilla, included bonds
and bank loans in the financing.
La Pintada, the
concessionaire responsible
for the Pacífico 2 toll road,
could also close a long-term
bank loan by the end of
July. The developer, led by
local construction company
Odinsa, has hired Itaú BBA
to lead a syndicated loan for
the 95km toll road. Lenders
are considering a 14-year
loan to cover the 1.37 trillion
Colombian pesos ($459 million)

6 L ATINFINA NCE.COM - July/August 2016

in estimated project costs.
The developers behind the
Autopistas al Mar 1 concession,
Austria's Strabag, Spain's
Sacyr and local firm Concay,
are also close to securing a
financing package that could
include a peso-denominated
loan and a cross-border bond
issue. The 176km toll road,
with some 2.24 trillion pesos in
estimated investments, has the
highest costs of all the projects
in the 4G program.
Corficolombiana, the
Colombian financial services
company that owns the
developers Episol and
Concecol, wants a mini-perm
loan in dollars and pesos for the
Villavicencio-Yopal toll road.
The concessionaire Covioriente
could get a loan similar to the
financing that Covipacífico, a
concessionaire led by Episol,
got for the Pacífico 1 toll road.
Covioriente has not yet
decided how much to put in
each tranche but it is fielding
offers from European, Asian
and US banks to provide the
financing in dollars. Crédit
Agricole, Mizuho, La Caixa and
SMBC supplied $150 million in
dollars for Covipacifico, while
local lender Davivienda and
four banks that belong to Grupo
Aval - Banco do Bogotá, Banco
de Occidente, Banco Popular
and Banco AV Villas - provided
the 2.15 trillion pesos of local
currency. The 18-year loan for
Covipacífico priced around
250 basis points over Libor,
but Covioriente expects to pay
a lower spread because it will

Loans rank by volume, year to June 30
Mistubishi climbs up
Rank
1
2
3
4
5
6
6
8
9
10

Bookrunner
Citi
Mizuho
Mitsubishi UFJ
Itaú BBA
Credit Agricole CIB
SocGen
Intesa Sanpaolo
JPMorgan
BBVA
Sumitomo Mitsui
Total

have financing with a shorter
tenor.
SMBC, the only underwriter
on a roughly $450 million
financing package for Autopista
Conexión Norte toll road,
has received commitments
from Asian, European and
local lenders for a 15-year
two-tranche loan in pesos
and dollars. Bancolombia,
Credicorp Capital, Davivienda
and national development
bank Financiera de Desarrollo
Nacional (FDN) are likely
to participate in the pesodenominated tranche. Spanish
construction company Ortiz
leads the Autopistas del
Nordeste concessionaire that is
building the 145km toll road.

Pipelines

In Mexico, the emphasis is on
financing natural gas pipelines.
Local developer Fermaca is
looking for more than $800
million in bank debt for two
pipelines, the 389km Villa

Value ($m)
1,664
1,234
866
557
492
400
400
371
307
285

# Deals
9
6
3
3
2
1
1
2
3
5

13,116

56

de Reyes-AguascalientesGuadalajara pipeline and
the 600km La LagunaAguascalientes. Nine banks,
led by Japan's Mizuho, could
contribute to a mini-perm loan
for the two projects.
IEnova and TransCanada
could soon approach local and
international banks to finance
pipeline projects awarded
by Mexico's state-owned
utility Comisión Federal
de Electricidad (CFE). The
two companies, through the
Infraestructura Marina del
Golfo (IMG) joint venture, will
invest $2.11 billion to build the
800km South Texas-Tuxpan
natural gas pipeline. IMG's
planned investments represent
a 31% savings from the CFE's
estimates. IEnova, a subsidiary
of US firm Sempra Energy,
has also signed on to develop
the Empalme pipeline, while
TransCanada gas has the
contract to build the Tula-Villa
de Reyes pipeline. LF
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