Two of the most significant projects in Latin America in the past year were in a surprise part of the hemisphere for large investments – Central America.
A new bridge over the Panama Canal was the most high-profile public works project bond in Latin America in recent memory, and an energy transaction created a new regional power player in the renewables sector.
Besides being landmark projects for the region, they had another thing in common, relying on Mizuho Americas to close the deals. The bank is the winner of the Infrastructure Bank of the Year for Central America.
Mizuho was the sole bookrunner for the $1.43 billion financing for the fourth bridge over the Panama Canal. The project, which was first announced in 2018, went through a series of changes, with each modification making it more complex.
It involved negotiations with the Panamanian government and CPCP, the Chinese consortium selected to build the bridge. CPCP includes China Harbor Engineering Company and China Communications Construction Company.
The bond financing was built around government-issued work progress certificates, a process through which the government issues coupons based on agreed-upon milestones that are later monetized. While there have been other examples in the region, this was the largest to date.
“This was the largest structured capital markets financing in Panama, the largest government certificate bond transaction of this nature, and largest ever zero-coupon structured bond in Latin America, which defines the magnitude of the project and the achievement of its participants,” says Olivier Baratier, managing director and co-head of the Structured Credit Group at Mizuho.
Rodrigo García de León, managing director of Latin America Debt Capital Markets for Mizuho Americas, says the bridge financing could be a model for the region.
“We think that the Panama transaction was remarkable for the region and it opens a way of financing for projects not only for Panama but for the rest of Latin America,” he says.
Mizuho also played a key role in EnfraGen’s $1.05 billion acquisition of renewable assets in Panama and Costa Rica. It was joint bookrunner on the financing. The acquisition of six assets from Celsia included hydro, solar and wind facilities in the two countries. It was an expansion for EnfraGen in Costa Rica and initial entrance into Panama.
Mizuho is not new to Central America and Panama in particular. It was the lead arranger for financing Panama’s Metro Line 3 in 2022. The original plan for Line 3 was for it to run parallel the fourth bridge, but the two projects were divided, with Metro Line 3 moved from the bridge structure to under the canal.