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Latham Advises on US$1.4 Billion Second Tranche of the Milestone-Based Receivables Financing for the Construction of the Fourth Bridge Over the Panama Canal

April 11, 2024
The 144A/Reg S zero coupon notes are part of the second series of notes issued under a multi-tranche structure to finance the critical infrastructure project. The firm had also advised the structuring agents and note purchasers under the first tranche.

A multi-disciplinary team led by members of the firm’s Latin America Practice advised Mizuho, as initial purchaser, and Banistmo, as local placement agent, on Panama Infrastructure Receivable Purchaser PLC’s offering of its US$1,424,258,000 Series 2024-2 Senior Secured Notes due 2032. The Series 2024-2 Notes are the second series of notes issued under a multi-tranche structure pursuant to which Panama Infrastructure Receivable Purchaser PLC, an orphan special purpose vehicle incorporated under the laws of England and Wales, will purchase certain work progress receivables (informes de progreso de trabajo) from Consorcio Panamá Cuarto Puente and China Harbour Engineering Company Ltd. from time to time.

The firm had advised the structuring agents and note purchasers in connection with the Series 2024-1 Notes that were issued as the initial tranche under the transaction. As part of the issuance of the Series 2024-2 Notes, the Series 2024-1 Notes were exchanged for cash. 

The Series 2024-2 Notes will be listed on the Singapore Exchange Securities Trading Limited, and are expected to be rated Baa3 by Moody’s and BBB- by S&P.

The project is one of Panama’s critical new infrastructure projects and is expected to considerably enhance ground transportation connections between Panama City and the rest of the country, streamlining the daily movement of approximately 70,000 vehicles and benefitting approximately 1.7 million residents.

In addition to the financing, Latham advised on the bankability of certain amendments to the project contract and the regulatory framework for the issuance of the work progress receivables, the creation of the multi-tranche financing structure, tax structuring in connection with the use of an English special purpose vehicle, and various regulatory matters relating to the financing.

The transaction involved the combined work of numerous parties and law firms across multiple jurisdictions.

The Latham team was led by New York corporate partners Gianluca Bacchiocchi and Guido Liniado, with associates Giancarlo Reanda, Francisco Lascurain and Andres Chester.* London partner Tom Cochran advised on English law matters. New York partner Elena Romanova, with associate Jacob Nagelberg advised on US tax matters, and London partner Aaron Bradley, with associate Nicole Lim advised on UK tax matters. Counsel Joel Cavanaugh advised on Investment Company Act matters. Counsel Laura Szarmach advised on compensation, employment and benefits matters. Counsel Andrew Galdes, with associate Jessie Michelin advised on sanctions and export control matters.

*Not admitted to practice in New York. Admitted in Argentina.