SMBC, the Japanese bank, has invested heavily in its project, energy and infrastructure financing capabilities over the years, propelling it to the top of industry rankings – a place where it consistently dwells.
This past year was no exception, as the bank led numerous ground-breaking transactions across the region against an otherwise unforgiving global market backdrop, distinguishing itself yet again in two of Latin America’s most important markets: Chile and Mexico.
Beyond that, the bank has also redoubled its focus on developing its financial advisory services to serve clients in the energy and infrastructure market – picking up mandates for some of the region’s most important deals.
David González, managing director for Structured & Project Finance in Latin America at SMBC, which wins Financial Advisor of the Year, says the key to being a reliable financial advisor is to focus on providing innovative solutions to support clients’ needs, rather than just presenting a set of product offerings.
Alejandro Ramirez Brochero, David Gonzalez, Pablo Pulido, Leonardo Osorio, Miguel villa, Alfredo Santillán, Cristhyan Rey, Isabella Saval, Nicolás Garcia, Andrés Torres, Alfredo Ugarte
“We want to come up with a structure that benefits the client and maximizes the returns of the sponsor,” González says. “We want to make sure that, when we structure a transaction, we do it in the best possible way, and this entails not just looking at SMBC as a potential provider of products but also finding the best solution available in the market.”
A dedicated advisory team will evaluate the full spectrum of financing solutions in order to “give the client the best market offers,” whether it’s a short-term or long-term loan, a club deal, a private placement or a 144A bond in international capital markets.
González notes that the company is already advising on a number of new financings, including for a solar energy portfolio in Mexico, another 4G refinancing in Colombia, and a battery energy storage project in Chile, among others.
It’s that client-centric approach that helped the bank land financial advisory roles on a range of standout deals including a $345 million financing for TOCE CEPI transmission lines in Peru and the refinancing of the 4G toll road Conexion Norte projects in Colombia.
The bank also acted as financial advisor on one of Mexico’s most important project financings of the period, the $2.5 billion financing for the expansion of the Mayakan pipeline.
Beyond its advisory role, the bank has ample muscle to step in to lead major financings. For the Mayakan expansion in Mexico – where it wins Infrastructure Bank of the Year – SMBC also acted as joint lead arranger for the commercial bank tranche. Meanwhile, the bank was joint global coordinator on the commercial financing for the $6.2 billion acquisition by the Mexican government of a portfolio of Iberdrola energy assets – one of the region’s most notable transactions of the past year.
González says he’s confident Mexico is poised for an uptick in deal-flow over the coming year. “The new government will definitely provide a new perspective to the market,” he says. “I believe it will welcome foreign direct investment.”
One of the sectors that could benefit is energy – and in particular, the energy transition, given expectations the incoming administration will show more enthusiasm for renewable energy sources. Meanwhile, the trend towards nearshoring should also continue to generate demand for new and upgraded infrastructure.
González notes that investors are already preparing for a pick up in activity. “I already see private equity firms and financial institutions, both on the equity and debt sides, starting to position themselves for what is coming ahead,” he says.
Chile, in contrast, is one country in the region that has still continued to see robust infrastructure financing activity. There, SMBC played lead roles in at least two exemplary transaction: the $883 million project financing of a desalination plant and aqueduct developed by Aguas Pacifico; and a $1.2 billion package for Antofagasta to acquire and expand Minera Centinela.
González says that water projects should continue to pop up Chile, as well asimportant opportunities in renewable energy, and more specifically, in battery energy storage systems.
“It is what the Chilean market needs right now,” he says. “Renewables is one of the most important sectors for SMBC, and we will try to continue to be active in this sector in the region.”
González also points to the rapid growth of the data center sector across the region – and area he expects will continue over the coming years attract more attention from investors and financiers, including SMBC.