Milbank, Tweed, Hadley & McCloy LLP in Beijing represented China Development Bank Corporation (CDB), a joint lead arranger and senior lender, in connection with its participation in a loan of US$390 million to Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. – Opain S.A. of Colombia (Opain). The total financing consisted of US$1.1 billion and was used for the expansion and redevelopment of the El Dorado international airport in Bogotá, Colombia, one of Latin America’s largest airports. Milbank in Washington, DC also represented CDB and the other participating banks, Inter-American Development Bank (IDB) and Corporacion Andina De Fomento (CAF).

“This transaction demonstrates the growing role CDB is playing in the financing of complex infrastructure projects in Latin America and around the world,” said Gary Wigmore, head of Milbank’s Asia project finance practice, who led the Beijing team, with support from lead senior associate Shepard Liu and other associates in Beijing. Mr. Wigmore added: “Like other Chinese financial institutions, CDB is increasingly teaming up with international banks, export credit agencies and multilateral lending institutions on cross-border project and acquisition financings. This trend is driving global investment in natural resources, energy and infrastructure projects from Canada to Colombia and from Mozambique to Mongolia.”

This financing marks a major step for CDB and other Chinese financial institutions in their appetite for large-scale lending into Latin American countries. Mr. Liu noted: “The most important part of the transaction was the innovative security arrangements built around a restrictive trust structure required by the Government of Columbia. The creative security solution developed by the deal team could become a model for future lending from Chinese financial institutions into Colombia or other Latin America countries.”

Glenn S. Gerstell, the Milbank partner who led the firm’s deal team in Washington, DC, noted: “Concession-based financings present their own set of challenges. The long-term concession issued by a Colombian government agency pursuant to public bidding procedures reflected the balance of the interests of the government, the airport users, and the successful bidder and its possible subsequent financiers.”

Given the increasing amount of trade and investment between China and Latin America, the lenders expect to see many other financing opportunities in the energy, power and national resource sectors in the region.