S&C Advises Fiduciaria Bancolombia S.A. Sociedad Fiduciaria on Colombia 4G Projects

December 2017

S&C represented Fiduciaria Bancolombia S.A. Sociedad Fiduciaria, as trustee of Fideicomiso P.A. Pacífico Tres, Fideicomiso P.A. Costera and Fideicomiso P.A. Concesión Ruta Al Mar, in separate project bond issuances to finance the construction and improvement of toll roads in Colombia. The project financings also included Colombian peso-denominated credit facilities. The trusts were created in 2014 and 2015 after the Colombian government awarded Colombian corporations concessions as part of the country's “Fourth Generation” (4G) Project, an infrastructure program aimed at modernizing road infrastructure throughout Colombia.

On February 22, 2016, Fideicomiso P.A. Pacífico Tres, a Colombian trust acting through S&C client Fiduciaria Bancolombia S.A. in its capacity as trustee, issued two tranches of 19-year project bonds with an aggregate principal amount equivalent to $380 million to finance the construction and improvement of toll roads in the Valle del Cauca region in Colombia. The project financing also included Colombian peso-denominated credit facilities of approximately $270 million, as well as a subordinated liquidity facility from the Colombian Government's Financiera de Desarrollo Nacional (FDN). Concesión Pacífico Tres became the first group to raise financing for a 4G project in the cross-border markets.

On July 8, 2016, Fideicomiso P.A. Costera, a Colombian trust acting through S&C client Fiduciaria Bancolombia S.A. Sociedad Fiduciaria in its capacity as trustee, issued an 18-year project bond worth $262 million in order to finance the construction and improvement of 159 km of roadways, including the design, construction, improvement, maintenance, operation and exploitation of a toll road that will connect the northern cities of Cartagena and Barranquilla in Colombia. The project financing also included Colombian peso credit facilities.

On December 21, 2017, Fideicomiso P.A. Concesión Ruta Al Mar, a Colombian trust acting through S&C client Fiduciaria Bancolombia S.A. Sociedad Fiduciaria in its capacity as trustee, issued a 27-year project bond worth $178 million in order to finance the construction and improvement of 490 km of roadways, including the design, construction, improvement, maintenance, operation and exploitation of a toll road that will connect the two major economic centers of Colombia (Antioquía and Bolívar). The project financing also included Colombian peso credit facilities, a long-term loan from Colombia's FDN, and other funding sources bringing the total financing to approximately $490 million.

These are three of the 31 concession projects awarded to date by the Colombian government as part of the 4G Project. Trust revenues derive mainly from future toll collections, commercial exploitation (gasoline stations, billboard advertising, etc.) and contributions from a Colombian infrastructure agency.

The Pacífico Tres matter was the first 4G project to reach financial close and has been recognized with five awards, including: LatinFinance's 2016 Best Road Financing and 2016 Best Infrastructure Financing – Andes, Project Finance International's 2016 Latin America P3 Deal of the Year, IJGlobal's 2016 Latin America Roads Deal of the Year and Latin Lawyer's 2016 Project Finance Deal of the Year. The Ruta al Mar matter was recognized as IJGlobal's 2017 Latin American Transport Deal of the Year.

Mr. Risoleo represented Fiduciaria Bancolombia S.A. on behalf of S&C, and Mr. Wang advised on tax matters, for these transactions.