Winner: Goldman Sachs
Chile was where the action was in the Southern Cone’s infrastructure sector over the past year — and Goldman Sachs has been busy leading some of the most innovative deals in the country.
The winners of the Infrastructure Bank of the Year in the Southern Cone category led a number of landmark transactions in the region. One of them was Chile’s electricity tariff’s monetization deal, our Bond of the Year. Another was the cross-border bond debut by Empresa de los Ferrocarrilesdel Estado, EFE, the winner of Infrastructure Financing of the Year in the Southern Cone category.
“Much of the activity in infrastructure financing in the past 18 months has involved addressing government concerns around fiscal constraints and addressing important social issues,” says John Greenwood, the managing director of Project, Infrastructure and Principal Finance at Goldman Sachs.
Both deals should be seen in this context. The securitization of receivables by some of the Chile’s largest energy generation companies was designed to mitigate the financial impact of a law issued by the government to reduce electricity bills after violent protests in late 2019.
For its part, EFE went to market in search of funding for the upgrade of the battered railway system around Santiago, another source of social discontent.
“EFE obtained long term funding at historically low rates. It was a complement to local funding for a strategically important state-owned company that is developing a very critical and underdeveloped sector,” says Fernando Bravo, the head of the Andean region at Goldman Sachs.
In his opinion, despite the current difficulties, the infrastructure market will continue to generate opportunities for players like Goldman Sachs.
“Given recent volatility and uncertainty in local institutional demand in some markets, including Chile, the importance of international markets has increased. And investors like the asset class, which delivers predictable, long-term cash flows at attractive levels,” Bravo remarks.