First Peruvian health project financed in capital markets

Author: | Published: 4 Jun 2012

The first Peruvian public health infrastructure project to be financed in the capital markets received an investment grade rating last month, in absence of government guarantees.

The class A zero-coupon notes due 2029 will raise $230 million and were assigned a BBB- rating by Fitch Ratings.

The rating was due largely to a complex offering structure that removed construction risk. The investors’ right to receive payment on the bonds’ underlying assets - project payments known as RPICAOs made by government health organisation Seguro Social de Salud (EsSalud) - is unconditional and irrevocable, even if the project does not complete.

The funds will be used to construct two hospitals and two medical distribution centers in Lima.

“This deal is a real milestone in the history of Peruvian public health infrastructure, not only because these projects are the first EsSalud infrastructure...