Concesion
Costera, which is building the 110km Cartagena-Barranquilla toll road concession in Colombia, could issue both local and cross-border bonds by the end of May or early June, sources told LatinFinance.

Goldman
Sachs and the concessionaire completed a series of investor meetings in the US and Europe last week
and are wrapping up meetings in Latin America this week, sources said.

A
financing package is likely to include a Rule 144A/Reg S dollar-denominated bond, a UVR-denominated bond and up to three separate
loan agreements, two sources said.

Colombian
development bank FDN will also provide a subordinated line of credit valued at
15% of the $460m financing, a source said.

FDN
President Clemente del Valle told LatinFinance that the development bank could increase its financing
commitments for Colombia’s 4G toll road concessions program.

“We
are expecting to double our participation in the projects to up to
approximately $140m,” he said at the Colombia InsideOut conference in New York on May 13. “The goal is to gain traction and draw
participation from a wide pool of investors.”

Incorporating
a “global-local” bond into a potential trade allows foreign investors to participate in the peso-denominated tranche, one source said. International
long-only investors, such as infrastructure funds, have expressed
interest in the deal, a second source said.

The Cartagena-Barranquilla deal follows a similar structure to the Autopista Conexion Pacifico 3, the first 4G project to reach financial close. Goldman Sachs in February closed a financing package comprised of bank loans and bond issues. Local builder Mario Huertas Cotes and Costa Rican builder Meco each own 30% of Costera, while the construction subsidiary of financial services group Colpatria holds 30% and local builder Castro Tcherasi has 10%. Mario Huertas and Meco also own stakes in the Pacifico 3 concessionaire.

Colombia’s
4G program has not been without delays. Del Valle said projects
were taking a while to finance because the pool of investors were negotiating
terms under a revised regulatory framework. He said he was confident that the next round of projects would reach financial close more quickly. 

“We
are all in a learning process,” he said. “Because of the different nature of
investors, needs are different, and this needs to be accommodated.”

FDN will receive between COP2tn ($669m) and COP3tn in
government funds, Ana Milena Lopez, Colombia’s public credit director, told LatinFinance at the Colombia InsideOut event.

The government will disburse a portion of the proceeds from the January sale of its 57% stake in power generator Isagen to the Fondo Nacional para el Desarollo de la Infraestructura (Fondes).
The money will then be drawn down by FDN.

“You will see these [proceeds] coming in the next month or so,” Lopez said. “The FDN will then use this to increase the credit it applies to these projects.”

FDN
will sell a subordinate, hybrid bond to the government after it receives funds from the government’s Isagen sale, del Valle said.