Allen & Overy advises IDB Invest’s USD115 million financing for Salaverry Terminal modernization in Peru
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News: 13 February 2024
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Allen & Overy (“A&O”) advised IDB Invest (“IDBI”) on a refinancing transaction to provide a USD115m loan to repay existing debt for the modernization of the Salaverry Multipurpose Port Terminal in Peru.
The deal is comprised of IDBI’s USD65m A loan and USD50m B Loan, where the B Loan is supported by a participation that is funded through the private placement of a 20-year B-Bond.
This hybrid A Loan/B-Bond financing structure—a first for the Peruvian project finance market—is tailored to Salaverry Terminal Internacional S.A (“STI”) debt capacity over the remaining lifespan of the 30-year PPP concession and combines the flexibility of an A loan and the long tenor of a project bond financing. The refinancing will provide long-term financing by mobilizing significant investments from the selected group of institutional investors and will allow STI to save considerable costs on its existing obligations for the expansion and modernization of the Salaverry Multipurpose Port Terminal.
The modernization of the terminal will allow it to meet increasing logistics demands for various sectors, including of agro-export, grains and mining production, among others. This will continue to strengthen Peruvian foreign trade in key markets, which includes the Ancash, La Libertad, Lambayeque and Cajamarca regions, boosting the economy and generating direct and indirect employment for the local and regional population.
“The A&O team is pleased to have advised on this novel financing structure to support an infrastructure asset of such critical importance to the local Salaverry economy and Peruvian economy overall,” said Sami Mir, Washington, D.C. partner in A&O’s global projects, energy, natural resources and infrastructure (PENRI) practice. “This deal is a testament to how countries globally are prioritizing critical infrastructure investments and we look forward to advising on similarly innovative project financings with significant impact in the future.”
Two Allen & Overy teams separately represented IDB Invest and institutional investors on the STI refinancing. The IDB Invest team was led by Washington D.C.–based partner Sami Mir with support from associates Sagarika Sridhar, and Sara Douki; and the institutional investor team was led by New York–based partner David Flechner with support from associates David Birch and Daniel Mortati.