The problem statement
What was the issue?
The Chilean energy industry was under intense pressure following the introduction of a new stabilization law by the government to limit the impact of mounting energy costs on consumers due to rising oil prices and other sharp cost increases being felt across the energy market. Law No. 21,472, known as the MPC Law, was introduced to limit the increase of electricity bills on consumers over the short-term, and instead allow such increases to be incurred gradually over 10 years.
| Industry | Energy |
| Specialties | Structured Financing |
| Location | Chile |
Our approach
How did we address it?
To reduce the impact on energy companies due to the deferral of payments established by the MPC Law, IDB Invest structured a financing facility, entailing a substantial “A/B” bond being set up to create liquidity in the energy market.
As part of this financing structure, these deferrals were backed by payment certificates issued by the MPC Fund, that was created as part of this law. IDB Invest agreed to purchase all eligible payment certificates from the fund – with USD 180 million for portion “A” being financed from its own resources, and portion “B” financed through the issuance of credit notes in the global debt market.
Amicorp worked alongside Goldman Sachs Co. LLC, who led the two bond issuances as the arranger and Global Sale Coordinator, J.P. Morgan Securities LLC and Itau BBA USA Securities Inc. as joint bookrunners, and Clifford Chance who acted as legal advisers.
According to Clifford Chance, this was the first multiple-tranche B-bond ever that’s structured to accommodate and mobilize a wide investor base under the (i) Rule 144A/Regulation S and (ii) Section 4(a)(2) private placement formats. In addition to being one of the largest private capital market issuances in Latin America, the transaction reflects an effective collaboration between the public and private sectors to design and execute bespoke, tailored, and scalable financial solutions that contribute to improving the quality of life of consumers.
The deal was recognized at the LatinFinance Deals of the Year Awards where it picked up the ‘Structured Financing of the Year' award.
Our solutions
Amicorp’s services in this award-winning deal.
Amicorp colleagues from Uruguay, Chile, Luxembourg and our Netherlands offices played a part in making this a success. Our roles spanned:
- Set up and administration of a Luxembourg Special Purpose Vehicle (“SPV”), on behalf of the issuer
- Set up and administration of a Stichting entity
- Onshore Administrative Agent
- Onshore Verification Agent
- Onshore Calculation Agent
If you would like to find more about how Amicorp can support your investment structure, contact the team here
