LatinFinance - September/October 2016 - 8

NEWS
LOANS

Colombian toll road concessions remain in the spotlight, but
they could test the market's financing limits in the months
ahead. By Mick Bowen

4G faces test
Latin America's loan market
remains focused on Colombia's
4G toll road concessions
program, with local banks
getting more involved and
the government taking steps
to set up access to financing
for the later rounds. The rate
of projects reaching financial
close has slowed from earlier
this year, but the true test will
likely come in the months
ahead, when projects from the
second and third rounds of the
concession auctions look for
funding. By then, local lenders
will have a clearer picture of
how much they can afford and
they may have settled upon
their favorite developers,
making the financing
environment more difficult for
sponsors that have not built
close relationships with banks.
With such a scenario
in mind, Colombia's Vice
President Germán Vargas
has called on the national
development bank Financiera
de Desarrollo Nacional (FDN)
to earmark funds from the
government's sale of power
generator Isagen to finance at
least three roads in the third
round of 4G projects.

4G deals

Odinsa, in charge of the
concessionaire La Pintada, in
late August arranged 1.27 billion
Colombian pesos in bank debt
for the Pacífico 2 toll road,
including up to $250 million in
dollars. Brazil's Itaú Unibanco
is now recruiting other banks to
participate in the syndication of

the 14-year dollar loan.
Conconcreto, the
Colombian company that
recently won the 30-year
public-private partnership
(PPP) contract to expand the
Bogotá-Girardot highway, will
likely use bank loans to cover
up to 80% of the planned 1.71
billion Colombian pesos in
investments. The developer
plans to reach financial close in
October.
Not long after that,
Covioriente, a concessionaire
owned by two subsidiaries
of the local financial services
firm Corficolombiana, Episol
and Concecol, expects to close
financing on the VillavicencioYopal toll road in November.
Covioriente is sorting offers
from more than 20 banks to
provide mini-perm financing
for $850 million but it has not
allocated the final tranches.
Spanish construction
company OHL has enlisted
CorpBanca, Davivienda
and FDN to lend up to the
equivalent of $350 million
in Colombian pesos for the
Autopistas al Rio Magdalena 2.

New debt fund

Japan's SMBC and Brazil's BTG
Pactual are building a 25-year
infrastructure fund with up
to $400 million for toll road
concessions. The fund will
likely provide long-term loans
for five or six projects in the
infrastructure program.
SMBC brought in the
Korea Development Bank
(KDB), Peru's BCP and Spain's

8 L ATINFINA NCE.COM - September/October 2016

Loans rank by volume, year to August 25
Citi holds the lead
Rank
1
2
3
4
5
6
7
8
8
10

Bookrunner
Citi
Mizuho
MUFG
Credit Agricole
BBVA
Itaú BBA
SMBC
SocGen
Intesa Sanpaolo
JPMorgan
Total

Instituto de Crédito Oficial
(ICO) on a $250 million dollardenominated loan for the
Conexión Norte toll road
concession in August, part of a
financing package that included
600 billion Colombian pesos
from Bancolombia, Davivienda
and FDN. SMBC also owns an
8.84% stake in the governmentcontrolled FDN, alongside
the IFC and the regional
development bank CAF.
Still in Colombia, Goldman
Sachs has presented a letter
of high interest to finance
the Río Magdalena waterway
PPP, putting up some $350
million of its own money.
The US bank, much like it did
earlier this year with three 4G
projects, will design a financing
structure which could include a
combination of bonds and loans
or just bank loans.
Financing the Río Magdalena
project requires Odebrecht
to reduce its stake in the
concessionaire Navelena. The

Value ($m)
1,944
1,400
958
909
784
648
452
400
400
388

# Deals
10
7
4
4
7
4
6
1
1
2

18,686

74

Brazilian developer, ensnared
in corruption investigations at
home, is close to lowering its
share of Navelena to around 25%
from 87%.

Renewables

In Mexico's renewable energy
sector, Aldesa Energias
Renovables and GBM
Infraestructura are negotiating
a long-term $87 million
loan from SMBC and local
development bank Banobras for
the Chacabal I and II wind power
facilities in the state of Yucatán.
Uruguay's state-owned power
company UTE is negotiating
a 20-year A/B loan for around
$120 million for the Valentines
wind farm. Just as it did for the
Colonia Arias wind project in
December last year, UTE will
sell a 30% equity stake in the
project on the Montevideo stock
market. This time, however,
UTE will only sell shares to retail
investors, rather than include
local pension funds. LF
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Table of Contents for the Digital Edition of LatinFinance - September/October 2016
