Mayer Brown advised on the transaction named “Latin American Transmission Deal of the Year” by IJGlobal at its 2014 Americas Awards, which recognize “excellence, achievement and innovation in energy and infrastructure finance” during the past year and are chosen by the publication’s editorial team.
The project bond for Abengoa Transmisión Sur (ATS) was the winning transaction. A power transmission line spanning half the length of Peru, the new ATS energy transmission line is a key piece of the Peruvian government’s plan to extend the reach and reliability of the national power grid. Mayer Brown represented both HSBC Securities (USA) Inc. and BNP Paribas Securities Corp. as joint lead arrangers and sole bookrunners in the $344 million commercial bank mini-perm financing and BNP Paribas Securities Corp. and HSBC as underwriters in the $432 million issuance of a senior secured project bond issued by ATS.
One reason the ATS project bond is significant is that at the time of issuance in early 2014, it was the largest Peruvian dollar-denominated project bond ever issued and the first to be issued with a 29-year tenor—a time-span remarkable for its duration in today’s credit climate. The financing of this project represents precisely what many in the industry expect to become a common paradigm in the future: commercial banks financing the construction stage of the project and then seeing their balance sheets recycled by having, upon completion of construction, the mini-perm financing replaced by a long-term bond (whose tenor is a better match to the long life of the asset and which then frees the banks’ capital for deployment in other construction-stage projects).
The Mayer Brown team was led by partners Christopher Erckert (Banking & Finance, New York/Washington DC) and David Bakst (Corporate & Securities, New York) and included Banking & Finance partner Curtis Doty (New York) and associates Sean Kulkarni (Washington DC) and Augusto Ruiloba (New York).
IJGlobal is a magazine and online news service providing detailed information on financial structure, policy, pricing and key players influencing infrastructure and project finance transactions and trends.