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EPM Closes Mammoth $1 Billion USD Loan From Syndicate Of US & Japanese Banks
Posted On January 3, 2016
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Empresas Publicas de Medellín (EPM) the City of Medellín-owned multinational utility announced last week the signing of a $1 billion USD loan from a syndicate of banks in a club deal to fund growth plans in 2016, including the Ituango hydroelectric project.
Bank of America and HSBC Securities served as global coordinators, joint bookrunners and mandated lead arrangers. The rest of the syndicate was made up of Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking as mandated lead arrangers and joint bookrunners, and Citigroup Global Markets, JP Morgan Securities, and Mizuho Bank as lead arrangers.
The loan was authorized by the Ministerio de Hacienda y Credito (Finance Ministry) on December 22, by degree #4783, and the deal was signed on December 29 by the banks and Juan Esteban Calle Restrepo, general manager of EPM.
83% of the loan will go towards energy, such as the Ituango Hydroelectric Project, and 17% will go towards EPM’s waterworks businesses.
The loan is disbursable over a 12 month period and has a term of 5 years. The interest rate is LIBOR+1.40%. The loan will finance the investment plan and $12.4 billion 2016 budget for EPM, approved by the board of directors on November 24 of last year.
“This operation represents a diversification of the sources of financing for our enterprise, and the consolidation of a long-term commercial relationship with this important group of international banks that back the growth strategy and diversification of projects and businesses of Grupo EPM,” said Calle.
“The competitive conditions practiced in this operation ratify the trust and the solid reputation that EPM projects in the international financial environment, even amidst an economic landscape of high volatility in international markets.”
Over the next four years, EPM plans to make $2.4 billion USD in investments to develop expansion projects, modernization and growth in the energy, gas, and water sectors, along with social responsibility and environmental programs that will contribute to sustainable growth of the enterprise and the areas in which it operates.
Photos of loan closing courtesy of EPM
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