September 26, 2017 |
When the Pacífico 3 toll road concession in Colombia reached financial close in February 2016, it included two long-term bond issues, one in dollars and the other in pesos. That the first project to close in the 4G program featured project bonds was remarkable. That the bonds included construction risk was doubly so. Another bond-backed 4G deal closed four months later.
Yet those two deals, with Goldman Sachs as the bookrunner, remain outliers. Colombia is a relative newcomer to project finance, but more mature markets have shown little enthusiasm for greenfield project bonds. No Chilean project bonds were sold last year, for example, and only one has come to market this year — for a largely
A few bond issues have been used to finance greenfield infrastructure projects in Latin America, but institutional investors are still wary of construction risk