PFR's Deal of the Year Awards are back, recognizing excellence in power project finance and M&A. Check out the shortlisted deals in the Latin America Mergers & Acquisitions category.

Congratulations to everyone who worked on the shortlisted deals:

·         YPF's sale of a stake in its Argentine power generation business to GE Energy Financial Services

·         InterGen's sale of its Mexican generation assets to Actis

·         Enel Green Power's sale of an 80% stake in its Mexican renewables portfolio to two institutional investors

·         AES Gener's sale of its Electrica Santiago (ESSA) flexible generation portfolio in Chile to EDF and Andes Mining & Energy

Deal profiles:

YPF Energia Electrica

Buyer(s)

GE Energy Financial Services

Assets

A 25% stake in YPF Energia Electrica, a power generation business in Argentina with an operational portfolio totaling 1,687 MW.

Seller(s)

Yacimientos Petrolíferos Fiscales

Deal Value

$275 million, plus $35 million contingent payment

Closing Date

March 30

Financial Adviser(s)

Lazard (seller)

Legal Advisers

Paul Hastings (seller, international)
Estudio O’Farrell (seller, local)
Shearman & Sterling (buyer, international)
Marval, O'Farrell y Mairal (buyer, local)

Other Involved Parties

Citigroup, Citi, Credit Suisse, Goldman Sachs (lenders)

Notes:

YPF has been working with Lazard to sell down large portions of its generation subsidiary to fund its expansion plans since 2017 and reached an agreement with GE EFS at the end of that year, which closed in early 2018. YPF said at the time that it was in advanced talks with another party about the potential sale of a further 24.5% stake, but a deal is yet to materialize. GE EFS financed the acquisition with a $155 million senior secured acquisition loan arranged by Citi, Credit Suisse and Goldman Sachs. The deal took place against the background of an approximately 3 GW power deficit in Argentina, for which the country’s government has declared a state of emergency.

Saavi Energia

Buyer(s)

Actis

Assets

A Mexican independent power producer with a total generation capacity of 2,235 MW.

Seller(s)

InterGen

Deal Value

$1.256 billion (enterprise value)

Closing Date

April 24

Financial Adviser(s)

Bank of America Merrill Lynch, Barclays (seller)
Scotia Capital (buyer)

Legal Advisers

Skadden (seller, international)
Creel (seller, local)
Milbank (buyer, international)
Galicia Abogados (buyer, local)
NautaDutilh (seller, Netherlands)
Loyens (buyer, Netherlands)

Other Involved Parties

Citi, JP Morgan, Scotia (active bookrunners on the acquisition financing)

Notes:

Actis acquired InterGen Mexico in a transaction that marks the first large-scale platform financing and sale since energy market deregulation in Mexico and the largest by Actis to date. The sale was agreed in December 2017. Citi provided a bridge loan to long-term financing, which comprised a $860 million senior secured bond, $316 million of sponsor equity, a $60 million revolving credit facility and $120 million in letters of credit. Citi, JP Morgan and Scotia were the active bookrunners on the Singapore Stock Exchange-listed bond, which has a tailored amortization profile based on varying debt service coverage ratios for contracted and uncontracted cashflows, achieving BBB/Baa3 ratings despite material merchant exposure in later years. Demand for the notes came from over 56 local and international investor accounts, allowing Actis to price the deal at par at 6.38%, in the middle of the initial price talk range. Milbank and Galicia advised the issuer and Shearman & Sterling and Gonzalez Calvillo the underwriters.

Enel Green Power Mexico

Buyer(s)

Caisse de depot et placement du Québec, CKD Infraestructura México

Assets

An 80% stake in a 1.8 GW renewables portfolio in Mexico

Seller(s)

Enel Mexico

Deal Value

$1.4 billion, implying an enterprise value of $2.6 billion

Closing Date

Sept. 28

Financial Adviser(s)

Goldman Sachs, BBVA (seller)

Legal Advisers

Norton Rose (seller)

Other Involved Parties

BBVA, Bancomer, CaixaBank, MUFG, Natixis (project finance bookrunners)
Bancomex, European Investment Bank, IDB Invest (lenders)

Notes:

Enel Green Power sold 80% of eight special purpose vehicles to Canadian institutional investor CDPQ and Mexican consortium CKD Infraestructura México while raising around $605 million of project debt. The deal involved the sale of operational assets and under-construction projects that were being project-financed at the same time. Goldman Sachs and BBVA initially ran the auction for the portfolio in 2017 as part of Enel’s shift to a build-sell-operate business model. The identities of the ultimate owners of the projects, CDPQ and CKD Infraestructura México, were an important factor in structuring the projects’ debt, so the financing was put on the back burner during the auction process.  In an interesting twist, CKD would hold its stake through a so-called Fibra-e listed vehicle, qualifying for beneficial tax treatment.

Electrica Santiago (ESSA)

Buyer(s)

Generadora Metropolitana (EDF, Andes Mining & Energy)

Assets

A 750 MW portfolio of flexible gas- and oil-fired generation assets in Chile.

Seller(s)

AES Gener, Norgener Foreign Investment

Deal Value

$300 million

Closing Date

May 10

Financial Adviser(s)

TBC (please let us know if your firm advised on this transaction)

Legal Advisers

Claro (seller)

Philipppi Prietocarrizosa Ferrero DU & Uría (buyers)

Other Involved Parties

BNP Paribas, Crédit Agricole, MUFGScotiabank, Sumitomo Mitsui Banking Corp. (acquisition finance bookrunners).

Notes:

EDF teamed up with frequent collaborator Andes Mining & Energy to buy 750 MW of flexible generation capacity from AES Gener in Chile, with 75% of the asking price financed with bank debt. BNP Paribas, Crédit Agricole, MUFG, Scotiabank, and Sumitomo Mitsui Banking Corp. arranged the $225 million debt package. EDF said the flexible fossil fuel-fired generation would allow it to develop more renewable energy projects by using their capacity to compensate for fluctuations in wind and solar generation.

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