Infrastructure Financing of the Year-Caribbean: DP World Caucedo Port Terminal
SPONSOR: DP World Caucedo
LOCATION: Boca Chica, Dominican Republic
FINANCING TYPE & SIZE: $285 million senior secured credit facility
LENDERS: Citibank, Scotiabank
LAW FIRMS: Cleary Gottlieb, White & Case, Bobadilla
When DP World began operating the Caucedo Port Terminal in 2003, the Dubai-based company always anticipated a sizeable expansion for the Dominican Republic facility. After all, the master plan for the port, which is in a free trade zone, reflected the country’s ambition to become a strategic shipping hub for markets in the Caribbean, as well as Central and South America.
DP World took a major step towards that goal at the end of 2018 when it obtained a $285 million senior secured credit facility to restructure $150 million in existing debt, while embarking on a significant expansion.
“We always had the vision to expand our capacity,” says Eduardo Guerra, director of finance for the port.
Citibank and Scotiabank were the lead lenders for the 7-year credit, with a floating rate above Libor. Panama’s Banco Popular and Multibank also contributed $50 million in a wider syndication. Cleary Gottlieb advised the company.
The expansion, scheduled for completion in the first quarter of 2020, expands the port’s berth by 400 meters. Equipment purchases totaling $80 million, including additional cranes and other equipment to move shipping containers, will allow Caucedo to handle more than 2 million containers a year, compared with the current 1.4 million.
The Dominican Republic has a strong economy that promotes imports and exports. Its central location also makes it attractive for regional shipping, according to Guerra.
“Our strategy is to create a logistics hub within the Dominican Republic. Not only does it have the largest market in Central America and the Caribbean, but it has an attractive position in the center of the Caribbean basin for vessels going westbound and eastbound as well as north and south,” he says. “For us, it provides strategic advantages.”