Hogan Lovells Advises Republic of Ecuador in US$260 Million Project Finance Loan

MIAMI, 6 December 2012 – Hogan Lovells has advised the Republic of Ecuador in the execution of an approximately US$260 million loan facility that closed on 28 November 2012. We also represented the state-owned Empresa Pública Municipal Metro de Quito in the negotiation and execution of an agreement on the project.

Granted by the European Investment Bank (EIB), the loan will be used to finance the first metro system for the country’s capital city of Quito. As part of a local and national plan to promote sustainable development and improve quality of life for residents, the loan facility will finance the construction of a new 22.5 km-long line, 15 stations, a maintenance depot, and the acquisition and assembly of the electromechanical rolling stock. The new metro line is scheduled for completion in the third quarter of 2016 and scheduled to start operating in early 2017.

"This loan represents EIB’s first operation with the Republic of Ecuador and we were honored to be able to utilize our global project finance experience to close what is viewed as a very strategic venture for both parties,” said Miguel Zaldivar, Global Co-Head of Hogan Lovells’ Infrastructure and Project Finance practice and a partner in the Miami office, who led the deal team. “The metro line will help ease traffic congestion in the city, while improving the efficiency of public transport and reducing fuel consumption.” 
The EIB is granting this loan under the current lending mandate for Latin America and Asia, which enables it to support investment in development of the local private sector, the creation of social and economic facilities, and climate change mitigation.  The project will be co-financed by other international financial institutions, including the Inter-American Development Bank and the Corporación Andina de Fomento. Hogan Lovells is also advising on this multi-lateral co-financing arrangement, as well as in connection with drafting Engineering, Procurement, and Construction contracts and equipment supply agreements for the project.

In addition to Zaldivar, the Hogan Lovells team included Gaston Fernandez, associate in the firm’s Miami office.

The closing of this transaction follows a number of recent significant deals in Latin American in which Hogan Lovells lawyers have been involved.

  • In a transaction that represents the largest bond to date by a private sector issuer from Central America, Hogan Lovells advised Banco Industrial, S.A., Guatemala’s largest bank, in a US$500 million bond issuance that closed on 1 November 2012.
  • In a securitization that closed on 3 October 2012, Hogan Lovells represented underwriters HSBC Securities (USA) and Global Bank (with a separate team advising the issuer trustee HSBC Panama) in a $600 million notes issuance to enable the government of Panama to reacquire the Corredor Norte toll road concession.
  • In a deal that was finalized on 1 October 2012, Hogan Lovells helped Millicom International Cellular S.A. acquire Cablevisión Paraguay for US$172 million, representing the largest telecommunications deal ever in Paraguay. 
  • Hogan Lovells has also advised Petróleos de Venezuela S.A. (PDVSA), the Venezuelan state oil company, on a number of transactions, including the negotiation and execution of a series of Engineering, Procurement and Construction contracts with a total value of US$3 billion and in obtaining US$1 billion in financing, announced on 31 August 2012, to expand the Puerto la Cruz refinery; and a US$3 billion bond issuance announced by the company on 11 May 2012.

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