CRC Transmisión’s Financing of Electrical Transmission Projects

Morales & Besa and Mayer Brown advised CRC Transmisión SpA in the financing for the construction and operation of a portfolio of electric transmission projects awarded by the Ministry of Energy. Milbank and Garrigues advised the underwriters on the offering.

The investment includes more than 550 kilometers of transmission lines and eight substations, owned by Diego de Almagro Transmisora de Energía S.A., Casablanca Transmisora de Energía S.A., and Mataquito Transmisora de Energía S.A., located in Chile, in the regions of Atacama, Valparaíso and Biobío. It is expected to benefit 17.6% of the national population.

The financing was granted through a private placement under section 4(a)(2) of the Securities Act of the United States of America, fully subscribed by Allianz Global Investors, and through a VAT facility granted by Banco Santander- under Chilean law.

It is worth mentioning that it is the first of its kind in construction-risk, single asset manager private placement transaction for the transmission lines sector in Latam.

Other relevant aspects are delay-draws of the Notes for 3.5 years, a 30-year private placement, interest-only for more than 10 years, and equity funding back-ended (after debt has been injected) and backstopped by Equity LCs. Also, a significant structural flexibility to allow for the refinancing of one asset today while allowing the construction of the two larger assets on the next four years, in addition to allowing the Issuer to raise additional debt for mandatory capex that can be required by the regulator. Finally, an investment grade rating obtained on the Notes, despite the construction risk and the Notes maturing beyond the end of the fixed tariff regime period of 20 years.

Morales & Besa advised CRC Transmisión SpA with Myriam Barahona (Picture), Ignacio Menchaca, Bernardo Mora, Ignacio Chomalí and María Victoria Alonso.

Mayer Brown advised CRC Transmisión SpA with Christopher Erckert, Kaleb Sanchez, Frederick Ryan D. Castillo and María Gabriela Dávila.

Milbank, Tweed, Hadley & McCloy advised Allianz Global Investors GmbH with Jaime Ramírez.

Garrigues advised Allianz Global Investors GmbH with Pedro García Morales. Asociado principal Antonio Morales Mutis. Asociado sénior Francisco Irarrázaval A. Asociada María Francisca Correa.

Garrigues advised Banco Santander – Chile with Jaime de Larraechea Carvajal, Francisca Ferrer, María Fernanda Jara Verdugo and Esteban Orhanovic.

Involved fees earner: María Francisca Correa – Garrigues; Jaime de Larraechea Carvajal – Garrigues; Francisca Ferrer – Garrigues; Pedro García Morales – Garrigues; Francisco Irarrázaval Armendáriz – Garrigues; Antonio Morales Mutis – Garrigues; Christopher Erckert – Mayer Brown; Frederick Ryan Castillo – Mayer Brown; Kaleb Sanchez – Mayer Brown; Jaime Ramirez – Milbank; Myriam Barahona – Morales & Besa; Ignacio Chomalí V. – Morales & Besa; María Victoria Alonso – Morales & Besa; Ignacio Menchaca – Morales & Besa; Bernardo Mora – Morales & Besa;

Law Firms: Garrigues; Mayer Brown; Milbank; Morales & Besa;

Clients: Allianz Global Investors; Banco Santander Chile; CRC Transmisión SpA;

Author: Ambrogio Visconti.