Latin America Sovereign Finance

Selected Sullivan & Cromwell Latin America sovereign finance matters include:

• Republic of Argentina, where S&C represented the international dealer managers in Argentina’s 2005 exchange offer resulting in SEC-registered bonds totaling $82 billion.
• Republic of Argentina, in litigation brought by numerous funds in the Southern District of New York relating to GDP-linked securities issued in 2005 and 2010. The Court dismissed the first-filed of the cases in January 2020.
• Republic of Argentina, in litigation against hedge funds pending in the High Court of Justice in London arising out of the 2005 and 2010 GDP-linked securities.

• Republic of Argentina, in a breach of contract action pending in the Southern District of New York related to Argentina’s 2012 expropriation of shares in a publicly-traded oil company.
• Province of Buenos Aires’ dealer managers, in its debt restructuring.
• Federative Republic of Brazil, where S&C represented the underwriters in bonds totaling more than $85 billion.
• Republic of Colombia, where S&C represented the underwriters in bonds totaling more than $64 billion.

The transactions include Colombia’s 2010 offering of TES Bonds due 2021, which was awarded “Best Local Currency Financing” by LatinFinance.

• Republic of Ecuador, where S&C represented the underwriters in $650 million in unregistered debt.
• United Mexican States, where S&C represented the underwriters in bonds totaling more than $163 billion.

The transactions include several of Mexico’s landmark bonds and liability management transactions, including: its century bond in 2010, recognized as one of the largest century bond offers on record and the first 100-year government bond offer from a Latin American issuer, and its 2013 €1.6 billion concurrent new issue and accelerated tender offer, awarded “Sovereign Liability Management of the Year” by LatinFinance, as well as LatinFinance’s 2019 “Sovereign Liability Management of the Year” and its 2018 “Sovereign Bond of the Year,” among others. In 2020, S&C advised the underwriters as the United Mexican States raised €750 million under its Sustainable Development Goals (SDG) Sovereign Bond Framework, the first offering of its kind.

• Republic of Panama, where S&C represented the underwriters in bonds totaling more than $39 billion.

The transactions include Panama’s largest-ever global bond offering with the lowest coupon rate in its history.

• Republic of Paraguay, where S&C represented the issuer in bonds totaling more than $3 billion, including its debut Rule 144A offering of $500 million.
• Republic of Peru, where S&C represented the underwriters in bonds totaling more than $4 billion.
• Government of Belize, Ministry of Finance of Belize and Central Bank of Belize, in connection with various restructurings of Belize’s financial indebtedness:
  • Government of Belize, in a “debt-for-nature” swap restructuring of all of its approximately $550 million of external commercial debt—an amount that represents 30 percent of the country’s GDP—becoming the first country in the Americas to complete a debt conversion that will fund ocean and marine life conservation;
  • Ministry of Finance of Belize, in a consent solicitation to the holders of Belize’s “superbond” held by foreign investors, seeking to allow the capitalization of the next three interest payments to focus resources in addressing health and economic issues resulting from the outbreak of COVID-19; and
  • Central Bank of Belize, in connection with the liquidation of Atlantic International Bank. 
• Banco Central de la República Argentina (BCRA), in repurchase transactions involving three series of BONAR sovereign bonds with a group of seven international banks, increasing BCRA’s USD cash reserves by $5 billion; and subsequently in the early repurchase of such transactions, and in entering into new repurchase transactions for $1 billion.
• Banco Central de la República Argentina (BCRA), in three arguments before the U.S. Court of Appeals for the Second Circuit in litigation concerning the Foreign Sovereign Immunities Act. BCRA prevailed in all three appeals, and the court rejected an attempt to attach BCRA’s assets in New York to enforce judgments against the Republic of Argentina.
• The Interim Government and the National Assembly of the Bolivarian Republic of Venezuela, in connection with the future restructuring of Venezuela’s external debt and the debt of certain of its state-owned instrumentalities.

Selected S&C Latin America quasi-sovereign and multilateral matters include representations of:

• Central American Bank for Economic Integration (CABEI), in which S&C represented the underwriters, in several Rule 144A MTN offerings totaling more than $1 billion.
• Corporación Andina de Fomento (CAF), in which S&C represented the issuer, in SEC-registered and unregistered offerings totaling more than $25 billion.

These transactions include CAF’s establishment and update of its A/B loan program, its SEC-registered shelf in the United States, its medium-term note program in Europe, its €750 million Reg S offering of green bonds, and its largest-ever offering.

• Fondo Financiero Para El Desarrollo De La Cuenca Del Plata (FONPLATA), in which S&C represented the issuer, in unregistered offerings totaling CHF150 million.
• Fondo Latinoamericano de Reservas (FLAR), in unregistered bonds totaling $2.4 billion, in which S&C advised the underwriters.
• Inter-American Development Bank (IADB), in which S&C represented the underwriters, in unregistered debt offerings totaling more than $128 billion.
• International Bank for Reconstruction and Development, in issuing $1.36 billion in “catastrophe bonds” designed to provide Mexico, Chile, Colombia and Peru with protection against financial losses from earthquakes. This matter is the largest sovereign risk insurance transaction to date, the second-largest issuance in the history of the catastrophe bond market and the first time that Chile, Colombia, and Peru have accessed the capital markets to obtain insurance for natural disasters. The transaction brought the total amount of catastrophe bond transactions facilitated by IBRD, and advised by S&C, to nearly $4 billion.
• International Bank for Reconstruction and Development, in issuing $360 million in “catastrophe bonds” to provide Mexico with protection against financial losses from earthquakes, Atlantic- and Pacific-named storms.
• International Bank for Reconstruction and Development, in issuing $320 million “catastrophe bonds” to provide funding to the Pandemic Emergency Financing Facility (PEF), a facility designed to channel surge funding for response efforts to help prevent rare, high-severity disease outbreaks from becoming more deadly and costly pandemics. The issuance of the Pandemic Notes marks the first time that catastrophe bonds have been used to finance response efforts to infectious diseases, and the first time that pandemic risk has been transferred to the financial markets. The issuance was oversubscribed by 200%, reflecting an overwhelmingly positive reception from investors and a high level of confidence in the unique World Bank-sponsored instrument, enabling the World Bank to price the Pandemic Notes well below the original guidance from the market. Recognized as IFLR Americas’ 2018 Securitisation and Structured Finance Deal of the Year.
• International Bank for Reconstruction and Development, in issuing $185 million in “catastrophe bonds” to provide Jamaica with protection against financial losses from tropical storms. The government of Jamaica is the first government in the Caribbean region, and the first of any small island state, to independently sponsor a catastrophe bond.
• International Finance Corporation (IFC), in which S&C represented the underwriters, in unregistered debt offerings totaling more than $46 billion.
• Petróleos Mexicanos (Pemex), in which S&C represented the underwriters, in Rule 144A/Reg. S bond offerings totaling more than $33 billion.