A repackaged securitization of participation rights to purchase facilities involving Chilean electricity companies and the Inter-American Investment Corp. is coming to market to issue up to $1.6 billion in securities to investors.
The Chile Electricity LUX PMC 2023-1 will issue just one tranche of notes, according to ratings analysts from S&P Global Ratings, while Moody's Investors Service says it expects the deal to close on August 31. Goldman Sachs & Co. is the arranger, while Citibank will act as the indenture trustee, administrative agent, paying agent and offshore collateral agent.
The purchase facilities will be established between the Inter-American Investment Corp., or IDB Invest. The participation interests will acquire certain securities governed by Chilean law in the form of payment certificates known as Mecanismo de Protección al Cliente securities, or MPC, according to Moody's.
The MPCs are from as many as 14 Chilean electricity generating entities, and benefit from an irrevocable, unconditional and unsubordinated guarantee from the Chilean government, Moody's said.
The purchase facility will be established in accordance with the Chilean government's program to allow a number of electricity generating companies to receive contractual payments originally established under power purchase agreements. This will happen without the full cost of those payments to Chilean customers through a mechanism backed by the Chilean Treasury, Moody's explained.
IDB Invest will finance an amount equal to at least 10% of the total facility amount of its own funds, S&P said, adding that IDB will finance the remaining 90% of the total facility amount.
Interest rates are yet to be determined on the notes, which have an expected legal maturity date of January 2033, S&P said. It expects to assign 'A' ratings to the notes.
