Colombia's FDN drafts securitization plans for 4G loans
The Colombian development bank plans to buy loans for Colombia's 4G toll road program and sell them as bonds in the capital markets
Colombia's development bank, Financiera de
Desarrollo Nacional, plans to start securitizing toll road
loans next year, giving banks more room to provide credit to
the next round of projects, CEO Clemente del Valle told
The bank, known by its initials FDN, will buy
long-term loans, especially from local banks, and sell them as
bonds in the capital markets, he said.
FDN also expects projects sponsors to rely more on
mini-perms to finance projects in the 4G toll road concessions
program. "Mini-perms are a solution to attracting banks and
retaining them, which is why they are starting to be attractive
to sponsors," del Valle said.
Not faced with the same restraints as
international banks from Basel III requirements, local lenders
have granted mostly long-terms loans for 4G roads, but del
Valle said one or two banks could move to mini-perms.
FDN will also supply hedging mechanisms to draw
more international banks to the 4G program. The bank expects to
provide currency hedges for two of the nine projects that could
reach financial before the end of the year, del Valle said.
"The advantage [of mini-perms] is that they bring
in more banks," he said, adding that a Spanish and a Canadian
lender have come to finance toll road concessions in
FDN is also in discussions with five commercial
banks and two multilateral lenders to provide between $500m and
$800m in peso-denominated loans for foreign banks to fund 4G
projects. International banks will likely increase their slice
of 4G financing to 25% to 30% from 20%, del Valle said. Eight
of 32 4G roads have reached financial close so far, he