Grupo Cobra corralled a variety of financing sources into a creative structure to execute the $254 million deal backing this combined 129.25MW wind facility in Peru. The bespoke and diverse nature of this transaction, as well as the tenacity of the sponsor and the lenders highlights this financing against other contenders.
The main components of the 18-year deal were a $206.5 million senior tranche and $33.9 million junior tranche. This included a $20 million fixed-rate tranche designed specifically to entice institutional investors and that received a full commitment from an undisclosed insurance company.
Development bank CAF provided a portion of the junior tranche which, because of its unique structuring as subordinated debt, was more similar to an equity position. This allowed the sponsor to favorably tweak the debt-to-equity ratio of the financing and also made the lenders more comfortable in the transaction.
“It helped us work a deal with the senior lenders where the levels of equity were a little lower than they would have been if hadn’t been for CAF,” says David Vuelta Mitchell, director of structured finance at Cobra affiliate ACS Group.
Export credit agency US Export-Import Bank and European development institutions Proparco from France, FMO from the Netherlands and DEG from Germany also made commitments to the deal that closed in April.
The deal took more than a year to execute and commercial lender interest in renewable energy in Peru evolved during that time, says Vuelta. “The pipeline for this project has been pretty long. The interest of commercial banks grew throughout the transaction… But we had walked a long way with these multilateral banks and we wanted to have them in our transaction.”
Natixis, which was mandated lead arranger on the deal along with CAF, underwrote $76 million of debt and also provided a hedge. LF
Project: Parque Eólico Marcona/Tres Hermanas
Location: Ica, Peru
Financing type & size: $254m loan
Banks: CAF, DEG, FMO, Natixis, Proparco, US Ex-Im
Law firms: Chadbourne & Parke; Clifford Chance; Garrigues; Rodrigo Elías & Medrano
WINNER: Parque Eólico Marcona/Tres Hermanas