Pérez Alati, Grondona, Benites & Arntsen advised the Municipality of San Isidro, acting as issuer, on the legal structuring and issuance of its Municipal Public Debt Securities denominated “San Isidro Infrastructure Bonds”, for a total nominal value of $30,000,000,000 (Argentine Pesos thirty billion) (the “Debt Securities”).
Banco de la Provincia de Buenos Aires, Puente Hnos. S.A. and Adcap Securities Argentina S.A. acted as arrangers and placement agents, and Banco de la Ciudad de Buenos Aires, Banco de Galicia y Buenos Aires S.A., Banco Santander Argentina S.A., Macro Securities S.A.U., Cocos Capital S.A., Allaria S.A., Banco de la Nación Argentina, Banco Comafi S.A. and Banco Patagonia S.A. acted as placement agents (the “Placement Agents”).
The Debt Securities will bear interest at a floating rate composed of the TAMAR Privada rate plus a cut-off spread of 7.00%, payable quarterly. The principal amount will be repaid in 8 quarterly installments, each equal to 12.5% of the principal amount of the Debt Securities, commencing 15 (fifteen) months after the Issue and Settlement Date.
The Debt Securities will be secured by the assignment of the Municipality’s collection rights over funds arising from the Provincial Tax Revenue-Sharing Regime, or any regime that may replace it in the future, in favor of Banco de la Provincia de Buenos Aires as the Guarantee Agent, for the benefit of the holders of the Debt Securities.
The transaction represents a milestone in sub-sovereign financing in Argentina, making San Isidro the first municipality in Greater Buenos Aires to access the capital markets to obtain long-term private financing for public infrastructure projects.
The proceeds from the issuance will be used exclusively to finance socio-urban integration, environmental regeneration and infrastructure projects in vulnerable neighborhoods within the Municipality of San Isidro.
The transaction required a complex legal structuring process involving public law and capital markets matters, in order to comply with the framework established by the Constitution of the Province of Buenos Aires, the Organic Law of Municipalities and the Municipal Fiscal Responsibility Regime, as well as to obtain the relevant approvals and interventions from the Ministry of Economy of the Province of Buenos Aires, the Provincial Court of Accounts, the Ministry of Economy of Argentina and the Central Bank of Argentina.
The Municipality of San Isidro was advised by the Pérez Alati, Grondona, Benites & Arntsen team, led by partner Diego Serrano Redonnet, with the participation of counsel Nicolás Aberastury, and associates Tamara Friedenberger, Catalina Hermida Pini and Juan Hernán Bertoni.
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