The ADRs began trading on the NYSE on July 25, 2024, under the ticker symbol “LTM.” This marks LATAM Airlines Group’s return to the NYSE after its departure in June 2020, which occurred due to a restructuring process under Chapter 11.

As part of the subscription offer, the selling shareholders have granted underwriters a 30-day option to purchase up to an additional 2.85 million ADRs at the initial public offering price. LATAM will not receive any proceeds from the sale of ADRs by the selling shareholders. The offering is expected to close on July 26, 2024, subject to customary closing conditions.

Goldman Sachs & Co. LLC, Barclays Capital Inc., and J.P. Morgan Securities LLC are acting as global coordinators and lead bookrunners for the offering. Citigroup Global Markets Inc., Santander US Capital Markets LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., MUFG Securities Americas Inc., Natixis Securities Americas LLC, and Larraín Vial S.A. are serving as additional bookrunners, with Morgan Stanley & Co. LLC participating as co-manager in the transaction.

This year there are 35 winners across five awards categories: Bonds & Loans Lifetime Achievement, Deal of the Year, Bank, Borrower & Legal.

Since 2015, the Bonds & Loans Awards have been recognizing the year’s most innovative and ground-breaking deals from Sovereign, Corporate and Financial Institution issuers and borrowers.

The 2023 Bonds & Loans event will take place November 27^th & 28^th at The Ritz-Carlton Key Biscayne, Miami

Bringing together the industry’s highest profile figures, the Bonds & Loans Latin America & Caribbean awards are an opportunity to raise the profile of the financial markets with the international investment community, and to inspire future issuance by companies.

The exhaustive selection process involves close examination of deal size, tenor, structure, and distribution; analysis and background of the borrower and their accessibility to financing; with extra credit for those deals demonstrating high quality execution, accessing new pools of liquidity, innovative structuring, and opening-up new markets.

GFC Media says that this year’s winners are a testament to the leadership demonstrated by Latin America and The Caribbean’s finance and investment community, which has successfully navigated through a ground-breaking year.

Presentation of the awards took place after the second day of the Bonds & Loans Latin America & Caribbean event, on November 2022 at The Ritz-Carlton Coconut Grove, Miami.

2022 AWARD WINNERS:

Bonds & Loans Lifetime Achievement Award:

• Carlos Garcia Moreno, Chief Financial Officer, America Movil

Sovereign Bond Deal of the Year:

• The Republic of Chile
• USD 2bn SEC Registered Sustainability-Linked Bond at 4.340%
• Issued: March 2022; Matures: March 2042
• JLMs/Bookrunners: BNP Paribas, Credit Agricole CIB, Societe Generale
• Legal Advisers to Issuer: Linklaters, Morales & Besa
• Legal Adviser to the JLMs: Cleary Gottlieb, Garrigues

Agency Bond Deal of the Year:

• CABEI
• MXN 5bn Floating Rate Notes at 3.98%
• Issued: June 2021; Matures: June 2024
• JLMs/Bookrunners: BBVA, HSBC
• Legal Advisers to Issuer: Shearman & Sterling, Ritch Mueller

Investment Grade Corporate Bond Deal of the Year:

• Sitios (America Movil)
• USD 1bn 144a/RegS Senior Unsecured Bond at 5.375%
• Issued: March 2022; Matures: April 2032
• Global Coordinators: Citi, JPMorgan
• JLMs/Bookrunners: Citi, Barclays, BBVA, BofA Securities, JP Morgan, Scotiabank
• Legal Advisers to Issuer: Cleary Gottlieb, Bufete Robles Miaja
• Legal Adviser to the JLMs: Ritch Mueller, Simpson Thacher & Bartlett

High Yield Corporate Bond Deal of the Year:

• Comunicaciones Celulares S.A. (Millicom, Comcel)
• USD 900m 144a/RegS 10NC5 Senior Secured Guaranteed Notes at 5.125% to finance Millicom’s acquisition of the remaining 45% equity stake in Comcel
• Issued: January 2022; Matures: January 2032
• Global Coordinators: Goldman Sachs, JP Morgan
• JLMs/Bookrunners: Goldman Sachs, JP Morgan, Scotiabank
• Legal Advisers to Issuer: Davis Polk & Wardwell, Consortium Legal
• Legal Adviser to the JLMs: Milbank, Cuestas PPQ

Hybrid Bond Deal of the Year:

• CEMEX
• USD 1bn 144a/RegS Hybrid Perpetual NC5.25 Notes at 5.125%
• Issued: June 2021; Matures: PerpNC5.25
• JLMs/Bookrunners: Citi, BofA Securities, HSBC
• Legal Advisers to Issuer: Skadden
• Legal Adviser to the JLMs: Cleary Gottlieb

Sovereign Liability Management Deal of the Year:

• The Dominican Republic
• DOP 110bn 144a/RegS (with permanent restrictions and concurrently offered via local auction) Senior Unsecured Dual-tranche Bonds at 8.0% and 8.625%
• Issued: June 2021; Matures: June 2028 and 2031
• JLMs/Bookrunners: Citi, JP Morgan
• Legal Advisers to Issuer: Cleary Gottlieb
• Legal Adviser to the JLMs: Simpson Thacher & Bartlett

Corporate Liability Management Deal of the Year:

• PEMEX
• USD 1bn 144a/RegS Bonds and USD 5.814bn Exchange/Tender Offer at 6.70%
• Issued: December 2021; Matures: February 2023
• Bookrunners: BofA Securities, Citi, Goldman Sachs, HSBC
• Legal Advisers to the Issuer: Cleary Gottlieb
• Legal Advisers to the Bookrunners: Shearman & Sterling, Ritch Mueller

Sovereign Restructuring Deal of the Year:

• The Republic of Belize
• USD 553m Blue Loan (USD364m Blue Loan used to retire USD553m Superbond with coupon of 3.0% at 55c to USD)
• Settled: September 2021
• Financial Adviser: Citi
• Legal Advisers to Issuer/Borrower: Sullivan & Cromwell
• Legal Adviser to the JLMs: David Polk

Corporate Restructuring Deal of the Year:

• Cinepolis
• USD 1.6bn MXN, USD, EUR, BRL and PEN Multi-Currency Debt Restructuring (Covenant Holiday and 2-Year Tenor Extension) and USD 200m New Term Loan Facility
• Settled: July 2021; Matures: July 2028
• Obligor’s Adviser: Lazard
• Lenders’ Advisor: FTI Consulting
• Legal Adviser to the Obligor: Skadden, Galicia
• Legal Advisers to the Lenders: Milbank, Creel García Cuellar

Syndicated Loan Deal of the Year:

• KKR (Project Alameda)
• USD 460m 4-tranche syndicated loan (USD 230m Term Loan, USD 140m Capex, USD 11m Revolving Credit, and USD 55m VAT Facilities) for the acquisition of 60% of Telefonica Chile’s Fiber Optic Network
• Issued: July 2021; Matures: July 2027
• Global Coordinators: Scotiabank, KKR Capital Markets
• Bookrunners: Scotiabank, KKR Capital Markets
• Legal Advisers to the Borrowers: Simpson Thacher & Barlett, CM Carey & Allende
• Legal Advisers to the Bookrunners: Allen & Overy, PPU

Mid-Cap Loan Deal of the Year:

• Lifemiles
• USD 400m Term Loan B
• Issued: August 2020; Matures: March 2026
• Bookrunners: Citi, Morgan Stanley

Leveraged Finance Deal of the Year:

• Mubadala Capital
• USD 1.8bn 144a/RegS Senior Secured Bonds at 7.25%
• Issued: July 2021; Matures: June 2031
• Global Coordinators and Bookrunners: Bradesco BBI, JPMorgan, HSBC, Societe Generale, Standard Chartered, UBS
• Bookrunners: Deutsche Bank
• Legal Advisers to Issuer: Skadden
• Legal Adviser to the JLMs: Milbank, Machado Meyer

Acquisition Finance Deal of the Year:

• Ecopetrol
• USD 3.8bn Bridge Loan for the Acquisition of ISA
• Issued: November 2021; Matures: November 2023
• Bookrunners: Citi, JPMorgan, Santander, Scotiabank
• Legal Advisers to the Borrower: Shearman & Sterling, Baker McKenzie
• Legal Advisers to the JLMs/Bookrunners: Milbank, Gomez Pinzon & Asociados

Project Finance Deal of the Year:

• Tocumen
• USD 1.855bn 144a/RegS Senior Secured Dual-Tranche Project Bond at 4.0% and 5.125%
• Issued: August 2021; Matures August 2041 and August 2061
• Bookrunners/JLMs: Citi, BofA Securities
• Legal Advisers to the Issuer: Shearman & Sterling, Icaza, González Ruiz & Alemán
• Legal Advisers to the JLMs: Milbank, Aleman Cordero Galindo & Lee

ESG Bond Deal of the Year:

• The Central America Bottling Corporation
• USD 1.1bn 144a/RegS Sustainability-Linked Bond at 5.25%
• Issued January 2022; Matures: April 2029
• Global Coordinators: Citi, JP Morgan
• JLMs/Bookrunners: Citi, JP Morgan
• Legal Advisers to Issuer: Hogan Lovells, Walkers, Palacios y Asociados
• Legal Adviser to the JLMs: Shearman & Sterling, Harney Westwood & Riegels, Atla Qil, Uria Menendez

ESG Loan Deal of the Year:

• CEMEX
• USD 3.25bn Sustainability-Linked Dual-tranche Credit Facility
• Issued: October 2021; Matures: October 2026
• Bookrunners: BNP Paribas, Banamex, Citi, BofA Securities, JP Morgan
• Legal Advisers to the Borrower: Skadden, GHR Rechtsanwalte
• Legal Adviser to the Bookrunners: Cleary Gottlieb, Galicia

BRL Deal of the Year:

• BNDES + VALE
• BRL 11.5bn 144a/RegS and ICVM 476 Senior Unsecured Dual-tranche Debenture
• Issued: April 2021
• Bookrunners: Bradesco, Citi, Itau BBA, JP Morgan
• Legal Advisers to the Issuer: Cleary Gottlieb Steen & Hamilton, Pinheiro Guimaraer Advogados
• Legal Adviser to the Bookrunners: Mattos Filho Veiga Filho Marrey Jr e Quiroga

MXN Deal of the Year:

• Grupo Aeroportuario del Centro Norte (OMA)
• MXN 5bn Dual Tranche 5-year Sustainability-Linked Floating Rate Note and 7-year Sustainability-Linked Fixed Rate Note at 6.87% and 9.35%
• Issued: March 2022; Matures: March 2027 and March 2029
• JLMs/Bookrunners: Citi, HSBC, Santander
• Legal Advisers to Issuer: Mijares, Angoitia, Cortés y Fuentes

COP Deal of the Year:

• Sacyr Concesiones
• USD798m 144s/RegS Project Bonds at 6.60% and Secured Loans
• Issued: February 2022; Matures: February 2041, May 2030, May 2037, April 2030
• Global Coordinators and Bookrunners: Goldman Sachs, JP Morgan
• Legal Advisers to Borrower/Sponsors: Clifford Chance, Posse Herrera
• Legal Adviser to the JLMs: Latham & Watkins, Philippi Prietocarrizosa, Perez Bustamante & Ponce, Uria Menendez

PEN Deal of the Year:

• Multimercados Zonales (Minka)
• PEN 135m Private Placement Securitisation Bonds at 7.969%
• Issued: November 2021; Matures: November 2041
• Bookrunner: Scotiabank
• Legal Adviser to the JLMs: Rodrigo Elias & Medrano

CLP Deal of the Year:

• Digital Bridge (Project Ocean)
• CLP 205bn Term Loan Facility for Digital Bridge’s acquisition of 100% stake of Pacífico Cable
• Issued: March 2022; Matures: March 2027
• Bookrunners: Scotiabank
• Legal Advisers to the Borrower: Vinson & Elkins, Carey
• Legal Advisers to the JLMs/Bookrunners: Allen & Overy, PPU

Bond House of the Year:

• JP Morgan

Loan House of the Year:

• Citi

Structured Finance Bank of the Year:

• Citi

Project Finance Bank of the Year:

• SMBC

ESG/Sustainable Finance Adviser of the Year:

• BNP Paribas

Brazilian Investment Bank of the Year:

• Itau BBA

Mexican Investment Bank of the Year:

• Santander

Andean Investment Bank of the Year:

• Scotiabank

Sovereign Funding Team of the Year:

• Ministry of Finance, Republic of Mexico

Corporate Funding Team of the Year:

• America Movil

Bank Funding Team of the Year:

• Corporación Andina de Fomento (CAF)

Banking & Finance Legal Adviser of the Year:

• Skadden

Debt Capital Markets Legal Adviser of the Year:

• Milbank

Since 2015 the Bonds & Loans Awards has been recognizing the most innovative and ground-breaking deals from Sovereign, Corporate and Financial Institution issuers and borrowers. This year, GFC Media Group is delighted to announce that for the first time they will be recognizing the outstanding achievements of Investment Banks’ Deal Teams, Funding Teams, Investment Managers, and Legal Advisers.

This year’s awards ceremony is a testament to the leadership demonstrated by the Latin American & Caribbean finance and investment community, which has successfully navigated through this most turbulent and ground-breaking year.

Following a rigorous selection process, GFC Media Group has announced the Bonds & Loans Latin America & Caribbean Awards 2021 winners.

Deals of the Year WINNERS:

• Sovereign, Supra & Agency Bond Deal of the Year: Republic of Peru
• Investment Grade Corporate Bond Deal of the Year: Coca-Cola FEMSA
• High Yield Corporate Bond Deal of the Year: Mercado Libre
• Hybrid Bond Deal of the Year: CEMEX
• Private Placement Deal of the Year: ATP Tower Holdings
• Liability Management Deal of the Year: United Mexican States
• Structured Finance Deal of the Year: Grupo Elektra
• Syndicated Loan Deal of the Year: Tecnoglass
• Local Currency Deal of the Year: Azul
• Leveraged & Acquisition Finance Deal of the Year: Northland Power
• Project Finance Deal of the Year: EnfraGen
• ESG & Sustainable Finance Deal of the Year: Klabin
• Ground-Breaking Deal of the Year: Suzano

Bank Awards WINNERS:

• Bond House of the Year: J.P. Morgan
• Loan House of the Year: Mizuho
• Structured Finance House of the Year: Goldman Sachs
• Project Finance House of the Year: Sumitomo Mitsui Banking Corporation (SMBC)
• ESG/Sustainable Finance Adviser of the Year: Morgan Stanley

Borrower Awards WINNERS:

• Sovereign Funding Team of the Year: Republic of Chile
• Corporate Funding Team of the Year: Suzano
• Bank Funding Team of the Year: CABEI

Legal Awards WINNERS:

• Banking & Finance Legal Adviser of the Year: Milbank
• Capital Markets Legal Adviser of the Year: Cleary Gottlieb Steen and Hamilton

To join the LatAm & Caribbean industry’s most high-profile figures at the Bonds & Loans Latin America & Caribbean AWARDS ceremony, book your table here today: https://na.eventscloud.com/ereg/index.php?eventid=619953& or contact Andrew Stark on Andrew.Stark@GFCMediaGroup.com

This approval comes after Avianca had to scramble to raise additional DIP funding when a widely criticized $370 million USD loan by the Colombian government intended to be part of the DIP financing package was blocked by a Colombian court.

Avianca CFO Adrian Neuhauser said, “The approval of the DIP financing package is a significant milestone and an important step forward for Avianca. We would like to again thank our lenders for their support and confidence in Avianca’s future success. We continue to work on our go-forward operating plan in order to emerge from this process as a stronger and more efficient airline, and look forward to presenting our plan to the U.S Court as we move forward in the Chapter 11 process.”

DIP Financing Package Including US$1.217 billion of New Funds to Support Avianca’s Ongoing Operations and Execution of Reorganization Process

Anko van der Werff, President and Chief Executive Officer of Avianca, added, “With U.S. Court approval to fully access this DIP financing, Avianca has ample liquidity to support our operations as we continue flying and serving customers. As COVID restrictions begin to ease, we are pleased to have safely resumed passenger flights to 21 cities in Colombia and 14 international destinations and look forward to adding more destinations to meet our customers’ travel needs over the coming months. We thank our customers for their loyalty, and we remain steadfast in our commitment to connecting people, families and businesses across Latin America through the Chapter 11 process and beyond.”

As previously announced on September 21, 2020, the Company’s DIP financing totals approximately $2.0 billion, consisting of a $1.27 billion Tranche A senior secured financing and a $722 million Tranche B secured subordinated loan. The DIP financing includes approximately $1.2 billion of new funds ($881 million in Tranche A and $336 million in Tranche B). Funding remains subject to entry of the order by the judge in the U.S. Court and certain conditions precedent, all of which are expected to be satisfied in the coming week.

Seabury Securities LLC is serving as Avianca’s investment bank and financial advisor. Goldman Sachs Lending Partners LLC and JPMorgan Chase Bank, N.A. are serving as co-lead arrangers and joint bookrunners of the Tranche A DIP Loans. Milbank LLP is serving as Avianca’s legal advisor.

All figures in this article USD.

The debt includes $220 million of existing notes, with secured note holders adding $290 million in new loans. Total financing including existing debt is expected to be approximately US$ 2.0 billion, consisting of a US$ 1.27 billion Tranche A senior loan and a US$722 million Tranche B subordinated loan. The DIP financing includes approximately US$ 1.217 billion of new funds consisting of US$881 million in Tranche A and US$336 million in Tranche B.

The $722 million Tranche B DIP (Debtor in Possession) loan includes $336 million of new money, and a $386 million refinancing of existing debt. While Kingsland Holdings participated in the new financing, Avianca says that United Airlines only participated in the refinancing of its existing debt.

United Airlines took control of the majority of Avianca stock after former controlling shareholder & chairman Germán Efromovich defaulted on a $456 million USD loan last year. United’s Latin American strategy depends largely on Avianca’s route network, so the airline’s recovery is critically important for the US carrier. Beyond taking control of the stock, United, along with Kingsland Holdings made an additional $250 million convertible loan to Avianca in November of last year.

Kingsland Holdings is the 2^nd largest shareholder behind BRW Aviation, the investment vehicle controlled by United Airlines (UAL). Kingsland Holdings is the investment entity controlled by Roberto Kriete, arch-nemesis of former chairman Efromovich. Kriete was the former chairman of El Salvador-based TACA Airlines which Avianca acquired in a stock-swap, completing the merger in 2013. That merger made Kriete the second largest shareholder in Avianca. Three years later, Kriete sued Efromovich for mismanagement and “plundering” the airline. Kriete also sought to block Avianca’s strategic alliance with United.

Last year, Kriete’s relationship with United took a turn for the better, with United Airlines, after taking control of Avianca, ousted Efromovich and installed Kriete as Avianca’s new chairman of the board. The two parties collaborated on additional financing for Avianca, by then struggling under crippling debt, dismal labor relations and increased competition,, They installed Anko Van Der Werff as CEO, but their fragile plans for recovery were laid waste by the Coronavirus COVID-19 Pandemic. The company filed for bankruptcy in May of this year after the Colombian government grounded all passenger flights to prevent the viral contagion.

“We are extremely pleased with the support received from a large number of third-party institutional investors and our existing lenders. We believe this demonstrates the market’s confidence in Avianca’s future as a strong, competitive, and profitable airline. Securing these financing commitments is another concrete step forward in our Chapter 11 reorganization process and we look forward to the U.S. Court approval of our proposed DIP financing package. We have resumed operations in most domestic markets and plan to add more domestic and international destinations in the coming weeks, while we remain focused on refining our reorganization plan to fully address the current industry landscape and the effects of COVID-19, enabling our team to continue driving efficiency and margin expansion and positioning Avianca to successfully serve Latin America’s air travel needs for many years to come,” said CEO Anko van der Werff.

The DIP loans are secured by Avianca’s key assets (including the airline’s ownership stakes in its LifeMiles and cargo subsidiaries, as well as by its key brands and cash accounts). Both tranches are secured by a lien on all available collateral, with Tranche B subordinated in right of repayment to Tranche A. The collateral pool for these DIP financings was recently substantially increased via a series of agreements previously announced by Avianca.

The financing is subject to U.S. Court approval, with a hearing scheduled for October 5, 2020, and other customary conditions.

Seabury Securities LLC is serving as Avianca’s investment bank and financial advisor. Goldman Sachs Lending Partners LLC and JPMorgan Chase Bank, N.A. are serving as co-lead arrangers and joint bookrunners of the Tranche A DIP Loans. Milbank LLP is serving as Avianca’s legal advisor.

Debtor in Possession financing under US law allows a firm in Chapter 11 bankruptcy to borrow money under strict conditions that subordinate existing debt and claims, with the goal of allowing the firm to emerge from bankruptcy as an operating business, and existing creditors to receive more than they otherwise would should the firm be liquidated.

Avianca’s proposed DIP financing structure consists of a Tranche A senior loan and a Tranche B subordinated loan, under which the airline seeks to obtain a total of approximately $1.2 billion USD of new funds ($900 million USD of Tranche A and $316 million of Tranche B) excluding any rollups of existing debt and purchase consideration. Total DIP facilities inclusive of rollup consideration will be $2.0 billion, consisting of a $1.3 billion Tranche A and a $700 million Tranche B. Both tranches will be secured ratably by a lien on all available collateral, with the Tranche B subordinated in right of repayment to the Tranche A.

Avianca says that it has now reached key agreements, subject to definitive documentation, the requisite consents and approvals from the relevant entities, U.S. Bankruptcy Court approval and other customary conditions, with various parties that are providing substantial funding towards such DIP loans. These agreements will allow the airline to offer prospective lenders a significantly enhanced collateral pool of assets to secure all of the DIP loans.

Breaking News: Former Avianca Chairman Germán Efromovich Arrested On Corruption & Bribery Charges (click here)

Goldman Sachs Lending Partners LLC and JPMorgan Chase Bank, N.A. have been engaged by Avianca subject to U.S. Bankruptcy Court approval, to serve as co-lead arrangers and joint physical bookrunners of the Tranche A DIP Loans. The providers of this financing may include certain of Avianca’s existing lenders, other prospective third-party lenders, and possibly the government of Colombia. Additional information about the potential financing will be posted on Avianca’s website.

Key DIP Agreements to Date

The three key agreements that have been reached, as integral elements of the securing the $1.2 billion of new DIP financing, are as follows:

1. Avianca’s Tranche B DIP financing will include funding from its existing stakeholder lenders as well as new investors consisting of $316 million of new money financing and a rollup of approximately $384 million of secured convertible debt issued in December 2019 and January 2020. The property that currently secures the existing Stakeholder Facility – Avianca’s 70% equity interest in LifeMiles, as well as certain Colombian Peso-denominated credit card receivables – will now be available to secure the DIP financing.
2. Avianca also has reached an agreement in principle with an ad hoc group of holders of Avianca’s 2023 senior secured notes; this agreement will be memorialized in a restructuring support agreement (RSA) between Avianca and holders of a majority of the notes. Pursuant to the RSA, all holders of the notes will have an opportunity to provide up to $250 million of new money commitments to the Tranche A DIP, with certain holders of notes agreeing to backstop $200 million. The RSA provides that holders of notes who become a party to the RSA will have the opportunity to roll up a portion of their notes into the Tranche A DIP, with the aggregate amount of rollup equal to $220 million of the Tranche A DIP. The RSA also provides for the collateral presently pledged to secure the notes, including Avianca’s trademarks, certain freighter aircraft and Avianca’s residual equity interest in certain pools of aircraft, to be pledged on a senior secured priming basis as additional collateral to secure the DIP loans.
3. In addition, Avianca has reached an agreement in principle with AI Loyalty (Cayman) Limited, holder of a 30% ownership stake in Avianca’s loyalty company, LifeMiles Ltd., to acquire 19.9% of LifeMiles equity, currently held by AI Loyalty for a combination of cash and Tranche A DIP loans and also to receive a call option to acquire AI Loyalty’s remaining equity stake in LifeMiles for cash. As a result of this agreement, Avianca will own 89.9% of LifeMiles upon the closing of the transaction, with a path toward ultimately buying back 100% of LifeMiles. These incremental stakes in LifeMiles will also be available as collateral to secure the DIP facility.

All monetary figures are US Dollars in this article.

The new bonds offering is being made by means of a preliminary prospectus supplement and an accompanying base prospectus that may be obtained by contacting: BBVA Securities Inc., by calling +1-800-422-8692 (U.S. toll free), Goldman Sachs & Co. LLC, by calling +1-866-471-2526 (U.S. toll free) or Scotia Capital (USA) Inc., by calling +1-800-372-3930 (U.S. toll free).

Application will be made to have the New Bonds listed on the Luxembourg Stock Exchange and admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange.

The bond offering includes $1,542,968,000 USD aggregate principal amount of global bonds due 2030 and $300,000,000 USD aggregate principal amount of additional global bonds due 2049.  The aggregate principal amount of 2030 Bonds includes approximately U.S. $192,968,000 intended to fund the purchase of tender orders made by holders of Colombia’s 2021 Bonds who submitted an equivalent-sized Indication of Interest for the 2030 Bonds prior to the pricing of the new bonds offering. The closing of the new bonds offering is expected to occur on Thursday, January 30, 2020.

Terms and conditions of the debt issuance and management operation

Investor Contact information:                       

D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Toll Free:  1-877-896-3199
Email:  colombia@dfking.com
Website: www.dfking.com/colombia

Above photo: Colombia’s finance minister, Dr. Alberto Carrasquilla, courtesy of Colombia’s Ministro de Hacienda y Credito Público

But the embroiled Salvador-based company is now tangled in a domestic corruption scandal, which on top of other problems has stalled progress and increased concerns in Colombia that it will be difficult to find funding to carry out the necessary dredging. Work that was planned to begin in June this year has still not been carried out, according to Reuters.

Two companies that are part of Carlos Slim’s Grupo Carso have expressed interest in taking over Odebrecht’s role in the massive Magdalena River project. (Credit: ITU Photos)

Now that it is starting to look like everyone would be better off if Odebrecht stepped aside, Mexico’s richest man wants in. “We have received a letter of interest from an alternative majority group — two companies from the Carlos Slim group in Mexico,” said Luis Fernando Andrade, interim director of Cormagdalena, the government agency that is overseeing Navelena’s work on the Magdalena.

According to Colombian magazine La Semana, there is still some red tape to clear for the two companies, IDEAL and FCC Americas, both of which are part of Carlos Slim’s Grupo Carso. FCC Americas has already been involved in several notable projects in Colombia in recent years, including dredging the Bogotá River, several road projects, and the construction of a tower at the capital’s El Dorado International Airport.

To approve a transfer in the stake-holding, Cormagdalena will require technical and financial documents — along with a letter of commitment from funding partner Goldman Sachs — that include a contingency plan to mitigate the possibility of a draught hitting in the first three months of 2017. These items are expected to submitted by October 28, according to the newspaper El Heraldo.

The mighty Magdalena River was once the industrial heart of Colombia. (Credit: Cormagdalena)

The river project is a long-term effort to make the mighty Magdalena, Colombia’s largest river and historic industrial artery, more navigable. By 2030, the government hopes that improvements will lead to five times more cargo being transported on the river — reaching 10 million tonnes per year — while cutting transport time in half and saving vast sums for everyone in the supply chain.

Commercial barges can currently can only travel from the Caribbean port of Barranquilla as far as Barrancabermeja, which sits some 250 miles from the capital. By the time the project is completed — the original schedule had a projection of 2021 — much larger vessels will be able to get much closer to Bogotá (and Colombia’s second city, Medellín). Days will be saved, and shippers will not have to rely as heavily on the trucking industry to get goods to their destination.

“It’s much cheaper because of the large quantities,” Carlos Nuñez, former head of Cormagdalena, told Reuters in 2015. “A convoy of barges can shift 7,200 tonnes in one trip. To move 7,200 tonnes by road requires 240 tractor trailers. Logistics savings could be between 30% and 50%, which will make national products more competitive for export.”

They see a country that is doing everything right in terms of making fiscal adjustments and maintaining sound monetary policy. So as the price of oil creeps back up from its recent staggering lows — as Brent crude did in August, rising 11% — Colombian assets are set to rise along with the tide.

Photo: Goldman Sachs Tower in Jersey City, New Jersey (Credit: Paulm27)

Goldman now ranks Colombia first in the world in terms of nations poised for a surge if oil prices continue their rally. BlackRock has it in the top three. Franklin Templeton “plowed $1.6 billion USD into Colombian debt through the second quarter,” reported Bloomberg, making the company the largest foreign holder of the bonds. Citigroup told investors recently that it is expecting more inflows into the market for Colombian bonds.

Those betting on Colombia may soon have plenty of followers looking for emerging market returns. Colombia’s local-currency bonds brought 5.8% returns in August, the highest of 31 emerging markets tracked by Bloomberg. In line with these results, the local peso strengthened by 3.3%, making it “the best-performing major currency in the developing world,” per Bloomberg.

“If oil prices stay in the $45-$50 range that our commodity team expects, Colombia could be the next place that outperforms,” Kamakshya Trivedi, chief emerging-market macro strategist at Goldman Sachs, told Bloomberg. “That’s one place where I see much more appreciation relative to forward markets.”

If the predictions hold and others jump back into Colombian bonds, this will be a throwback to a recent past that now feels like distant history.

Colombia had been the rising star of the region just a few years ago, showing major GDP growth at a time when Argentina and Venezuela were falling off a cliff, Brazil was beginning to show signs of weakness, and Mexico was having trouble expanding its economy. But since nearly two-thirds of the Andean nation’s exports come from fossil fuels, the plummet in commodities prices in late 2014 put Colombia into an age of austerity.

It has stayed afloat. Expectations for 2016 growth range from around 2%–3% in a time when only Peru, among the region’s larger economies, has been able to beat that rate. Budget cuts have been necessary to curb public spending. But the fiscal squeeze and deficit ratio has led Fitch Ratings to put the nation’s ratings on negative watch. That fallout soon spread with negative actions against state-controlled oil giant Ecopetrol, the nation’s largest bank in Bancolombia, several other big financial services companies, and the cities of Bogotá and Medellín.

Inflation has also raced out of control, hitting a 16-year high of 8.97% in July. This has widely been attributed to a food price spike cause by an El Niño-induced drought and a 45-day truckers strike that shut down major transportation routes. And it has eased, dropping to 8.1% last month. But the past six months have featured little in the way of good news.

Finance Minster Mauricio Cárdenas and President Juan Manuel Santos have been confident throughout the year, continually saying that the current challenges are short term hurdles. They believe that the headwinds will ease, and Colombia, especially now that peace has been reached with the Revolutionary Armed Forces of Colombia (FARC), will be back on its prior upward trajectory once oil prices cooperate.

Others are starting to agree, it seems. A few Wall Street big shots, as well as one of the world’s biggest reinsurers, are now seeing things the same way.

Rizk Ventures’ Co-Founder, CEO & Chairman Thomas Rizk

Rizk Ventures is a privately-held investment firm based in New York, founded by Thomas A. Rizk and Linda Rizk. Rizk Ventures Colombia is a wholly owned affiliate of Rizk Ventures, LLC led by Rizk Ventures Managing Partners, Geoff Rizk and Klaus Lederer.

Rizk Ventures’ Klaus Lederer

“We are very excited to announce this joint venture with Goldman Sachs and look forward to building a substantial hospital focused real estate portfolio in Colombia,” said Rizk Ventures’ Co-Founder & Chairman Thomas Rizk. “Colombia has a significant shortage of hospital beds, with many leading hospitals seeking expansion capital. This has created an opportunity to develop a robust pipeline of sale-leaseback opportunities.”

Established in 1986, Fundación Cardiovascular de Colombia has grown to become one of the largest private sector health providers in the country. The foundation offers tertiary level services at hospitals as well as telemedicine, training, manufacturing of hospital products, assembly of bioengineering equipment, and hospital management software among other services. As late as 2013, the company employed 1,400 people.

Rizk Ventures’ Geoff Rizk

Completed in 1997, Instituto del Corazon Floridablanca is a 197 bed hospital located in Floridablanca, Santander, outside of Bucaramanga. Instituto del Corazon Floridablanca was the first hospital in Colombia to receive international accreditation for meeting various quality and safety standards by the Joint Commission International. In 2014, Latin American business magazine, América Economia, ranked Instituto del Corazon Floridablanca as the #1 hospital in Colombia and the #4 hospital in Latin America.

Photos provided by Edelman Position