Peru project bond pushes local currency limit

Author: Zoe Thomas | Published: 17 Jul 2014
The three-pronged finance structure used in Rutas de Lima’s toll road project shows a growing trend of combining local fundraising and international investors in Latin America.

The financing, which closed on July 7, comprises a $550 million senior secured bond and a commercial loan. It is the largest project financing in sol, Peru’s local currency, demonstrating the growing comfort with sophisticated multi tranche project bond deals in Latin America.

By dividing the financing into three sections the project was able to balance the currency exposure risks, while reducing the negative carry and ensuring the financing pool was large enough.

"Combining bank and bond financing in any deal is a challenge, as is involving bonds in construction period financing," said Christopher Erckert, a partner at Mayer Brown, who represented the underwriters and loan arrangers. "But as more and more deals include one or the other of these aspects, we...


 

 

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