Cover & spine - Trade Finance

DEALS OF THE YEARTapping the local bank marketPacific Rubiales – reserve based lendingMLAs: BNP Paribas; Bancolombia; Banco de Bogota; Banco de Occidente; Calyon; Davivienda; WestLB. Borrower:Pacific Rubiales Energy. Amount: $250 million. Tenor: 4 years and 2 months. Lawyers: Latham & Watkins; PosseHerrera Ruiz; Arias Fabrega & Fabrega (for lenders); Proskauer, Cardenas y Cardenas (for borrower). Financialadvisor: Endeavour Financial.The Pacific Rubiales Energy (PRE) reserve based lending (RBL) deal wins an awardfor being the largest RBL in Latin America, successfully syndicated for a considerableinitial borrowing base during very tough market conditions. It is also the first RBLsyndicated in Colombia with the participation of local banks, demonstrating how newsources of liquidity have had to be tapped to ensure the success of larger deals.The deal was led by BNP Paribas, Bancolombia, Banco de Bogota, Banco deOccidente, Calyon, Davivienda, and WestLB.At the beginning of 2009 PRE needed to secure financing to carry out its ambitiousgrowth programme, which included the construction of the Oleoductos de Los Llanospipeline and further drilling and the revamping of existing facilities. This transaction,coupled with the loan granted by Grupo Aval entities in Colombia, allowed PRE todevelop its capex programme and achieve, ahead of time, the target production set foryear end 2009, which was to have a production of 100,000 bpd from the Rubiales field.The transaction, which includes a mandatory hedging programme, was a success andsyndication brought more than the intended $250 million. Several challenges werefaced, tight market conditions being the prime concern coupled with a low WesternTexas Industrial benchmark oil price – a key part of an RBL deal.BNP Paribas acted as global coordinator structuring and syndicating the deal. DiegoMejia, structured finance oil and gas Latin America at the bank, recalls: “The RBL wassyndicated and closed in the midst of the crisis at a time when liquidity was scarce.However, the deal’s structure allowed other international banks to participate and despiteit being new to local banks, we managed to bring them into the transaction and thusraised the funds needed by the client at a crucial time for their development plans.” ■34 TRADE FINANCE The Guide to Global Trade Finance Markets 2011