Corporacion Andina de Fomento is preparing a collateralized debt vehicle to fund Colombian road construction, a first for Latin America and one that could be replicated in other countries and industries.
By contributing an equity portion and bringing in senior investors, CAF could leverage a small investment to fund a broad range of projects.
CAF expects to spend the next three months finalizing the structure of the transaction, Victor Traverso, representative director for the CAF in Colombia, told LatinFinance.
From there, it plans to look for other subordinated investors and mandate an asset manager to run the vehicle. Colombian road construction concessions will make up the bulk of the vehicle's investments, but it may buy other deals - potentially in other investment grade countries - to build a diversified asset pool.
"If it works right, we will be able to support a larger number of projects than through funding individual concessions," Traverso said on the sidelines of the LatinFinance Securitization and Structured Finance in Latin America conference in Miami.
For full details of the structure being planned as well as market reaction, read LatinFinance's Daily Brief. LF
CAF Plots Colombia Road Fund