DLA Piper and Bruchou counsel in Mendoza’s first Sustainable Bond issue
DLA Piper Argentina has counselled the Province of Mendoza, and Bruchou & Funes de Rioja the arrangers and underwriters, on its issuance of first Sustainable Bonds for an amount of AR$ 4,876,673,332, and New Bonds 2024 for an amount of AR$ 2,633,120,511 as part of its debt refinancing strategy.
The issuance took place on 21 June, where the Sustainable Bonds were issued on with a variable interest rate composed of the BADLAR rate plus a 5.90% annual rate, and mature on 21 June 2025. The new 2024 Bonds were issued with a variable interest rate composed of the BADLAR rate plus a rate of 5.75% per annum, and mature on 21 December 2024, both guaranteed with resources from the Federal Tax Co-participation.
The funds will be used by the province to finance the expansion of the Metrotranvía de Mendoza system, in accordance with the guidelines of ICMA’s “Guide to Sustainable Bonds”. The project aims to expand the existing tram network, enabling its extension into new neighbourhoods, significantly reducing travel times, reducing traffic accidents and promoting the use of renewable energy by increasing the use of public transport, while reducing carbon dioxide (CO2) emissions.
As part of its debt refinancing strategy, the Province offered to exchange all of its outstanding PMJ23 Bonds, which matured in June 2023, for New 2024 Bonds, maturing in December 2024. The Province successfully exchanged more than 50% of the total outstanding PMJ23 Bonds, issuing in exchange New 2024 Bonds for an amount of AR$ 2.633.120.511. The New 2024 Bonds are listed on MAE.
The Sustainable Bonds are listed on the Mercado Abierto Electrónico (MAE) and on the “Panel Social, Verde y Sustentable” of Bolsas y Mercados Argentinos (BYMA).
Banco de Galicia y Buenos Aires, Banco Santander Argentina and TPCG Valores acted as arrangers and underwriters.
DLA Piper’s team consisted of partner Justo Segura (pictured left) and associates Federico Vieyra and Marcelo Ra.
Bruchou’s team was led by partner Alejandro Perelsztein (pictured right), with support from associates Manuel Etchevehere and Branko Serventich.
