Best Practices in PPP Financing Latin America - e-Institute - World ...

Day 1 - SIXTH SESSION
corresponds to long-term bonds (86% are administered by
pension funds and insurance companies). In this context, 20%
is related to infrastructure bonds financed by PPPs since 1998.
The Concession of Costanera Norte Highway was financed
with the issuance of infrastructure bonds. Financial close
occurred in December 2003, and was associated with a value
of US $ 294 million, with periods of 13 and 21 years for each
series.
Net resources associated with the bonds were deposited into
trust accounts and addressed to construction. The transaction
has an unconditional and irrevocable guarantee granted by the
Inter-American Development Bank (IADB) and the Insurance
Company Ambac Assurance Corporation, with a participation
of 15% and 85%, respectively. Both entities were classified by
Moody’s at AAA rating. These guarantees are regulated by the
Laws of the State of New York.
On the other hand, financial structuring established that the
concession holder would be authorized to use the benefits or
reduce the capital, if a minimum liquidity was guaranteed for
the next payment of the coupon.
In a basic plan of infrastructure financing with bonds, the
operator had to contribute between 15% and 20% of the
required investment. During the construction stage, a loan
bridge was arranged. The bond was placed in the market
of Pension Funds and Insurance Companies, with a longterm
time modality. Then, to issue the bond, the following
requirements were established: project having an “investment
grade” and financial guarantee issued by a multilateral
organization or insurance companies (monoliner). According
to Gatica, most infrastructure bonds were issued with
monoliner guarantees, the sole exceptions being the Inter-port
and Melipina Highways (See Table N.9).
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