LatinFinance - September/October 2017 - 81

energy needs for the Metro de Santiago,
delivering 300 GW hours per year, Total
said at the time. The subway system carries
2.2 million passengers per day.
The size of the debt package and the
innovative nature of the PPA make El
Pelícano the winner of the award for Best
Renewable Energy Financing.
SunPower is scheduled to finish building
El Pelícano by the end of the year, but
according to market chatter, the company
could already be looking to sell the 100
MW project. Possible buyers include EDF
from France and the local utility companies
Colbún and Engie Energía Chile. LF

BEST POWER FINANCING
BEST BOND
BEST INFRASTRUCTURE FINANCING:
ANDES

CELEO REDES
Strong investor appetite for Latin
American debt in the first half of the year
proved a boon for some first-time Andean
borrowers. The power transmission
company Celeo Redes capitalized on
the buoyant sentiment, becoming the
first project bond issuer from Chile to
simultaneously tap international and local
markets.
In May, Celeo Redes raised $600 million
in a two-part deal that some financiers say
may become a model for other transactions
in the region. The $379 million cross-border
bond portion was priced to yield 5.2%, and
the $221 million in inflation-linked local
Unidad de Fomento (UF) notes yielded
2.99%.
"We initially thought of doing just a
single issuance in New York," says Celeo
CFO Santiago Oraa Gil. "But we eventually
realized it wasn't going to be competitive.
So we decided to go with a dual-market
transaction. We knew it would pose some
challenges, but we also knew it was the best
path forward."
Celeo's successful debut placing longterm debt in concurrent transactions
makes the financing package stand out
as the winner of the awards for Best
Power Financing, Best Bond and Best
Infrastructure Financing: Andes.
The debt is backed by three of Celeo's
power transmission lines, two of which are
operating and another that is expected to
be up and running soon. The cross-border
bonds are secured by cash flows from the
transmission lines and rank pari passu with

COMPANY: Celeo Redes
LOCATION: Chile
FINANCING TYPE & SIZE: $379
million cross-border bond, $221
million UF note
BANKS: BBVA, Goldman Sachs,
JPMorgan
LAW FIRMS: Claro & Cia, Mayer
Brown, Milbank, Garrigues

the local notes.
The company's decision to raise a
portion of debt in UFs lowered its foreign
exchange risk. Spanish engineering
company Elecnor owns 51% of Celeo,
with the rest held by Dutch pension fund
Algemene Pensioen Groep.
Order books for the international paper
reached $1.4 billion. US investors accounted
for nearly 70% of demand, followed by
Latin American investors with 23% and the
rest from Europe and Asia.
BBVA, Goldman Sachs and JPMorgan
coordinated the cross-border trade, while
BBVA was the sole bookrunner on the UF
deal.
The success of the offering has opened
up new financing approaches, says Oraa.
"Thanks to this transaction, we now know
we can go to more sophisticated funding,
so we can be more competitive on future
projects."
Oraa says Celeo is focusing on securing
the permits it needs to grow its transmission
platform. "That will likely take a couple of
years," he says.
"Once we resolve this, we'll go back to
the capital markets," he adds. "This bond
can be reopened to raise debt for new
projects. In the end, this transaction was
much bigger than we expected. There was
no precedent for this kind of issuance when
we went to the market, and we found a lot
of willingness to buy this kind of risk." LF

BEST OIL & GAS FINANCING

FERMACA
Increasing the use and competitiveness
of gas-generated power is key to Mexico's
lauded energy reforms. With the expansion
of the midstream network crucial to the
plan, Mexico has auctioned 22 natural
gas pipeline contracts formerly owned by
state energy company Pemex in recent

years, attracting a projected $12.2 billion in
investment.
As the owner of existing pipeline
infrastructure linking Durango all the way to
Texas, Fermaca generated buoyant interest
from financiers after it won two of the most
important pipelines being mapped out.
The new pipelines will supply natural
gas to power plants in four states owned by
the state-owned utility company Comisión
Federal de Electricidad (CFE). The
444-kilometer La Laguna-Aguascalientes
pipeline and the 379-kilometer Villa de
Reyes-Aguascalientes-Guadalajara pipeline
require more than $1 billion in combined
investments.
Fermaca's flexible financing of the two
pipelines has earned the developer the
award for Best Oil & Gas Financing.
Intent on having the pipelines in
operation by 2018, Fermaca wasted no
time after winning the contract in March
2016. The developer hired ING as the
coordinating lead arranger, Mizuho as the
administration agent and BNP Paribas and
NordLB as the syndication banks.
It planned to finance both pipelines
through a single loan, but ultimately
decided investors would respond more
favorably to two smaller loans. And respond
they did.
The banks structured loans for $622
million and $435 million, both with an eightyear tenor. The transaction for the Villa de
Reyes-Aguascalientes-Guadalajara pipeline
also received a $50 million VAT facility
from Mexico's national development bank
Banobras.
The structure of the facilities indicate
Fermaca has a capital markets takeout on
its mind, attracting many investors who saw

PROJECTS: La LagunaAguascalientes, Villa de ReyesAguascalientes-Guadalajara
SPONSOR: Fermaca
LOCATION: Mexico
FINANCING TYPE & SIZE: $1.06
billion mini-perm financing
BANKS: BNP Paribas, ING, Intesa
Sanpaolo, KDB, KfW, Mizuho,
Natixis, NordLB, Sabadell,
Santander
LAW FIRMS: Galicia Abogados,
Latham & Watkins, Milbank,
Ritch Mueller

September/October 2017 - L ATINFINA NCE.COM 81
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