LatinFinance - September/October 2015 - 105

pockets. However, Rutas de Lima's
soles revenues made local currency
financing attractive, especially in light of a
strengthening dollar, by eliminating some
of the foreign exchange risk. The deal was
registered as a 144A/RegS offering, which
gave international buyers interested in
soles-denominated instruments a chance to
come in.
In roadshows in Chile, the US and Peru,
Pereira met with local and foreign investors
to explain the structure, especially the
delayed draw feature: one tranche was
fully funded at closing, while the other was
paid over time, cutting carry costs for the
sponsor during construction.
The public-private partnership issued
an oversubscribed 1.46 billion soles ($520
million) senior secured bond in June 2014.
The issuance was split into an 8.375% 1.038
billion soles 22-year fixed-rate tranche and
a 5.25% 421 million soles 25-year inflationlinked tranche. Joint bookrunners BBVA,
Credicorp Capital and Goldman Sachs
sold the bond, which was the largest local
currency deal in the Peruvian market at the
time. Interbank was a co-manager on the
issuance. LF

BEST OIL & GAS FINANCING
BEST LOAN
BEST INFRASTRUCTURE FINANCING:
MEXICO

LOS RAMONES II SUR
The transaction backing the 181.4-mile
Los Ramones II Sur gas pipeline was the
first since Mexico put the final touches on
a landmark energy reform that is set to
open the country's oil, gas and electricity
industries to foreign and private investors.
While the deal paved the way for billions of
dollars of financings that are set to support

Project: Los Ramones II Sur 182mile natural gas pipeline
Location: San Luis Potosí to
Guanajuato, Mexico
Financing type & size: $1.2bn loan
Banks: Banobras, BNP Paribas,
Crédit Agricole, Mizuho, Nafin,
Natixis, Santander, SMBC
Law firms: Cleary Gottlieb, Galicia
Abogados, González Calvillo,
Ritch Mueller, Shearman &
Sterling, Rodríguez Dávalos

Mexico's expanding pipeline network, the
road to being first in class wasn't easy.
Lenders on the $1 billion financing
package had to deal with a high degree
of uncertainty surrounding the reform,
including the new and unprecedented
reality that the project's state-backed offtaker Pemex would eventually be replaced
by an unknown government entity in the
early stages of the pipeline's lifecycle. In
addition, Pemex and GDF Suez, parents to
the sponsors, were faced with acquiring
local land rights, an onerous process in
Mexico that requires municipal approval
in addition to landowner permission.
"It was a great achievement getting the
financing. It was clean and came on time.
The lenders, the engineers, everyone
worked perfectly, and our team is very
proud of this project," says Jaime Calpe,
chief executive officer of Pemex subsidiary
Tag Pipelines.
The 20-year financing comes close to
matching the project's 25-year offtake
contract and consists of an $864 million
senior facility, a $29 million standby
facility and a $90 million VAT facility.
BNP Paribas and Banco Santander were
financial advisors to the sponsors. Crédit
Agricole, Mizuho, Natixis, SMBC, Banobras
and Nafin also took commitments in the
financing that closed in December. LF

Project: Companhia Siderúrgica do
Pecém Steel Mill
Location: Ceará, Brazil
Financing type & size: $3.1bn loan
Banks: BNDES, BNP Paribas,
Deutsche Bank, HSBC, Kexim,
K-Sure, Mizuho, Nonghyup Bank,
Santander
Law firms: Allen & Overy, Milbank,
Mattos Filho, Trench Rossi e
Watanabe (with Baker & McKenzie),
Vieira Rezende, White & Case

says Bruno Soares, a partner at Allen &
Overy, which advised the sponsors on
the financing. "Now it will be easier. They
have a precedent." The transaction closed
in April and marks South Korea's largest
investment in Brazil.
CSP is a joint venture between Brazilian
miner Vale and South Korean steel
companies Dongkuk and Posco, which
own 50%, 30% and 20% of the mill,
respectively. Vale will supply the mill with
iron ore as well as purchase 600,000 tons
of steel per year. Dongkuk will purchase
1.6 million tons and Posco will purchase
800,000 tons. LF

BEST MINING FINANCING
BEST INFRASTRUCTURE FINANCING:
BRAZIL

BEST BOND

COMPANHIA SIDERÚRGICA
DO PECÉM STEEL Mill

The innovative and creative nature of
the $273.7 million variable funding note
backing the Red Dorsal fiber optic cable in
Peru makes this deal truly exceptional in
project bonds and in the project finance
market overall.
Sponsors TV Azteca and Tendai issued
the first-ever US dollar denominated
delayed draw RPI securitization in Peru
in March, netting a 5.875% coupon for the
16.5-year paper. Under the delayed draw
feature, bondholders committed to the
full size of the bond on the pricing date,
advancing the funds in seven installments
over 18 months.
They are paid commitment fees on
the undrawn portion of the principal
amount.
The bond is backed by revenues from
tariffs on six sections of the network.
Under the 20-year concession agreement,
the Peruvian government would also
cover payments if revenues from those

This $3.1 billion term loan package
attracted a variety of funding sources and
closed amid a tough market. Moreover,
it has further opened the door for
Korean funding for infrastructure - in a
country that is scaling back its domestic
development bank as it rolls out billions of
dollars in concessions.
The transaction, backing what is to be
one of the largest steel mills in Brazil, is
comprised of a $2.1 billion syndicated loan
and a $1 billion bilateral loan. The Korean
Export Import Bank (Kexim), the Korea
Trade Insurance Corporation (K-Sure),
and BNP Paribas, HSBC and Mizuho and
Santander participated on the $2.1 billion
loan, while BNDES provided the $1 billion
credit.
"Now we really expect more deals
to happen with BNDES and Kexim,"

RED DORSAL

September/October 2015 - L ATINFINA NCE.COM 105
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