|
Background The Pacifico Tres (Pacifico 3) project, which is led by Construcciones el Condor, Mario Huertas Cote, and Meco, is part of the Colombian government 4G road infrastructure programme. The project includes the improvement and construction of 146km of roads as well as a 3.4km tunnel, and approximately 1.7km of bridges and viaducts, to connect the regions of Antioquia, Caldas, and Risaralda. In February 2016, the project’s sponsors secured a funding package equivalent to US$650mn, which contained a series of structural enhancements designed to de-risk the investment, and was the first project to reach financial close under Colombia’s 4G road infrastructure programme – setting a high bar for future projects. Transaction Breakdown The sophisticated financing structure used in this project included a US$260mn 144A/Reg S note, which was the first overseas bond for a Colombian toll road as well as the first UVR-denominated issuance globally. The complete multi-tranche, dual-currency, hybrid financing package includes three separate loan tranches along with a credit enhancement facility provided by Financiera de Desarrolo Nacional (FDN), a Colombian state-owned economic development bank. Proceeds from notes and senior loans make up the biggest source of funding – US$344.8mn and US$273.3mn, respectively – with the rest coming from interest income, construction revenues, and equity contributions. The bulk of the money will go towards servicing the EPC contract, valued at roughly US$440mn, while US$187.8mn has been allocated for interest payments and another US$41mn for other fees and expenses. The rest will go towards Opex and other construction costs, as well as funding of reserve accounts (US$65.8mn). |
Specifically, it will be used to fund key aspects of the project, including improvement of existing roads, construction of new short road stretches, as well the construction of two large tunnels and several bridges. The improvements are expected to be completed over the next five years.
