Latin America: SPV Ruta al Mar readies COP 505bn bond

08 December 2017 - 12:00 am UTC

The SPV behind the Antioquia-Bolívar road in Colombia is launching a road show to sell a COP 505bn (USD 167m) bond.

Colombian builder Construcciones El Cóndor, sole member of the SPV Ruta al Mar, will be meeting prospective investors during the week of 11 December for the bond issuance, expected before year end to fund construction of the road.

The senior secured notes due 2044 will be issued by a trust created by the SPV called Fideicomiso P.A. Concesión Ruta al Mar.

The notes are adjustable by Unidades de Valor Real (UVR), the Colombian currency linked to inflation. S&P Global Ratings on 6 December assigned a preliminary BBB- rating to the bond, with a stable outlook.

According to S&P report, the notes are part of a financing package that includes COP 960bn in senior loans already agreed upon with lenders.

Inframation previously reported that the sponsor was negotiating a multi-tranche deal with longer and shorter tenor portions, targeting infrastructure debt funds and local banks.

It is understood that the agreements stand with lenders for the credit facilities, but details and disbursement will be finalized after the bond issuance.   

S&P added that the financing of construction will be completed with COP 620bn of equity investment by the sponsor and COP 200bn in revenues generated along the construction period, as most of the road is already operational and toll roads are generating cash flow.

“The project is predominantly brownfield, as less than 25% of the road length is comprised of purely new construction,” S&P said.

The senior secured notes and the credit facilities are backed by toll road revenue. As an unsolicited proposal, the 4G road Antioquia-Bolívar does not receive availability payments from the government.

Goldman Sachs will be the bookrunner and structurer of the global-peso bond.

BTG Pactual serves as financial advisor to the sponsor.

In 2016, Goldman Sachs signed a letter of commitment for the financing of the road. Construcciones El Cóndor provided a full corporate guarantee to the bank’s commitment.

In August, national development bank (FDN) approved a COP 160bn short-term loan for the project.

In September, the SPV signed a COP 80bn bridge loan with local lender Davivienda, while it was working to close its long-term financing.

Construcciones El Cóndor holds the EPC contract to build the road.

Ruta al Mar signed a 34-year DBFOM PPP contract with national infrastructure agency (ANI) in October 2015 for the Antioquia-Bolívar toll road, as part of an unsolicited proposal.

The Antioquia-Bolívar highway will interconnect the northwestern region of the country, stretching over 493km between the Caucasia municipality in the Antioquia department and the Cruz del Viso municipality in the Bolívar department.

The project, with an estimated cost of COP 939bn, includes the construction of 112km of new road, revamping 226km of existing road and maintaining and operating a 154km of highway. The total investment required throughout the life of the concession is anticipated at COP 2.7trn.