Chilean transmission line holding company Celeo Redes is set to tap local and international debt capital markets on Thursday (4 May) to raise up to USD 575m through two amortizing notes.
Sources briefed InfraLatinAmerica that the company finalized a roadshow on Wednesday (3 May) that included meetings in London, California, Boston and New York City for a 144A/Reg S note of up to USD 359.2m maturing in 2047.
Additionally, the borrowers met with investors in Santiago and other Latin American cities to promote a UF 5.4m (USD 215m) senior secured bond to be sold in the local capital market. Debt structure details such as coupon and price have yet to be determined pending further feedback from investors.
BBVA, Goldman Sachs and JP Morgan are the bookrunners and placement agent for the international note, InfraLatinAmerica previously reported.
BBVA and JP Morgan are the bookrunners and placement agents for the Chilean deal.
The banks declined to comment.
The local note will carry a 30-year tenor and a 3.35% coupon, with a duration of 12.6 years, according to the prospectus.
Moody’s gave a Baa2 rating to the USD denominated notes, while S&P Global Ratings assigned a BBB rating and Fitch a BBB- rating to the deal. The UF denominated bond was rated AA- by S&P and A+ by Fitch.
The Celeo Redes notes are backed by cash flow generated by two operating transmission lines, the Alto Jahuel-Ancoa Transmission Line circuit 1 and the Charrúa-Ancoa Transmission Line; and future revenue of the Nueva Diego de Almagro transmission line still under development.
The bonds are also backed by insurance for material damages in construction and exploitation periods, civil responsibility and business interruption. Additionally, a reserve account for debt service for up to six months and another reserve account to cover operation and maintenance for up to three months also ensure the continuity of operations and debt amortization, according to the prospectus.
The borrower will use about 67% of proceeds to refinance previous debt, 25% for corporate purposes and 8% to finance the completion of the Charrúa-Ancoa project and the partial development of the Nueva Diego de Almagro transmission line, according to the prospectus.
Moody’s said that a very high initial leverage of Celeo Redes and the uncertain part of the cash flow, which is subject to tariff reviews by the government, are preventing a higher rating; but the amortising debt structure limits credit risk.
“The project benefits from having an experienced operator, and a five-year fixed operations and maintenance (O&M) contract, which is renewable annually,” S&P said.
Celeo Redes Chile Limitada is a subsidiary of Spanish developer Elecnor (51%) and Dutch private pension manager APG (49%), according to InfraDeals.