Two off-balance sheet trusts have been used to finance and develop a transmission project in northern Peru – the first time the structure has been used in the country.
Concessionaire Consorcio Transmantaro (CTM) needed $160 million debt to fund its 530km electric transmission line from Zapallal to Trujillo, but was concerned a loan at subsidiary level could jeopardise its outstanding bonds’ AAA rating.
CTM got around this by setting up a trust structure in place of a project company; a task for the lawyers given trusts are a relatively new feature in Peruvian finance and are not recognised by national mining regulations.
“We spent almost as much time discussing and agreeing the structure as drafting and negotiating the contracts,” said Marco Alarcón Piana from the...