Alcogal, as energy law firm in Panama, advised Banco General S.A. as arranger and administrative agent in connection with the structuring and registration of a USD180 million corporate bonds issuance by Hydro Caisán, S.A., as well as their public offering.
Furthermore, as part of a liability management operation, Alcogal also advised Banco General, S.A., as arranger and administrative agent, with the amendment of a USD90 million and a USD130 million corporate bonds issuances of Hydro Caisán, S.A.
The subsidiary company of Panamá Power, operator of the El Alto hydroelectric plant in Panama, originally sought financing through a six-year term bonds placement in the Panamanian stock market.
This is one of the first structured issuances of energy generating companies, that involve issuance of new securities and liability management transactions of existing issuances.
Partner Arturo Gerbaud, together with senior associate Rafael Marquínez and junior associate Rafael Amar, advised Banco General S.A. The transaction closed in October 2020.
Fitch Ratings
Fitch Ratings assigned a national long-term rating of ‘BBB + (pan)’ to the corporate bonds guaranteed for up to USD180 million (Bonds 2020) of Hydro Caisán, S.A. (Hydro Caisán).
The funds will be used primarily to refinance the current covered bond issues corresponding to the 2011 and 2012 Hydro Caisán bonds.
Fitch rates Hydro Caisán and its parent, Panama Power Holdings, Inc. and Subsidiaries (PPH) at ‘BBB + (pan)’, with a Stable Outlook. The ratings reflect PPH’s competitive position in energy dispatch in Panama, its contracted position and high level of leverage (total debt to EBITDA), which Fitch expects to be close to 7.0 times (x) by the end of 2020, for then drop below 6.0x after 2021. As an important factor, it also considers the company’s exposure to hydrological and regulatory risk, as well as macroeconomic conditions.
Banco General
Panama’s Banco General S.A. provides financial products and services for corporate, consumer and high-net-worth banking.
It offers investment management, mortgages, brokerage, mutual funds, checking and savings accounts, certificates of deposit, corporate and consumer credit cards, SME finance, online banking, loans, and pension, retirement, and unemployment funds, among others.
Banco General has a network of 71 branches nationwide and more than 500 ATMS. In addition, the bank has a subsidiary in Costa Rica and representative offices in Colombia, Mexico, Guatemala, El Salvador and Peru.
The bank also owns brokerage firms BG Investment and BG Valores, insurance and reinsurance company General de Seguros, pension and unemployment fund manager ProFuturo, and leasing company Finanzas Generales. The company was founded in 1954 and is based in Panama City.
Panama Power
Panama Power Holdings, Inc. (PPH) operates and develops, through its subsidiaries, renewable energy projects.
PPH’s main objective is to construct, develop and operate energy projects in Panama, without discarding opportunities in the region complementary to the group’s current strategy.
PPH was created in 2007 based on:
- Need for new generation capacity
- Availability of hydro resources
- Long term Power Purchase Agreement contracts for firm capacity
- Attractive economy for new projects
- Belief in the future of renewable energy
The Company currently has four hydroelectric plants in commercial operations:
- Generadora Pedregalito, S.A. – Pedregalito 1 located in Boquerón, Chiriquí, with an installed capacity of 20MW
- Generadora Río Chico, S.A. – Pedregalito 2 located in Alanje, Chiriquí, with an installed capacity of 12.5MW
- Generadora Alto Valle, S.A. – Cochea located in Dolega, Chiriquí, with an installed capacity of 15.7MW
- Hydro Caisán, S.A. – El Alto located in Renacimiento, Chiriquí, with an installed capacity of 72MW
Alcogal Energy Law Firm Panama
Alcogal is one of the most experienced energy law firms in Panama.
We focus on all types of transactions related to the energy and natural resources sectors, including mergers and acquisitions, regulatory compliance and optimization, project finance and project developments.
Our lawyers in Panama regularly advise domestic and foreign developers and/or operators regarding both renewable and non-renewable energy projects. Among other key players in the energy sector, we represent one of the largest distributors of electrical power in the country as their energy law firm in Panama.
