Chile's Santander Investment Securities is preparing a $280 million project financing backed by a securitization of road toll payments for GTM Group. GTM, a French company involved in infrastructure concessions for road construction, recently signed a contract with the Chilean government to administer and modernize a 100-kilometer segment of a highway in southern Chile.

In return, GTM has the right to collect highway tolls. Those payments will back the bond issuance. Monoline XL Capital will insure the deal, which is expected to hit the local Chilean market in the third quarter.

Fitch and Feller & Rate (the local affiliate of Standard & Poor's ) will be giving the transaction a triple-A rating. The 20-year paper will be shopped to local institutional investors.

"The main advantage of this product as far as investors are concerned is its high rating," explained Mauricio Gutierrez, from Santander Investment in Chile. "For the issuer it is a great way to gain liquidity for their projects. We closed two similar transactions back in 1998 and I expect to see others coming to market in the future."

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