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Arnold & Porter Advises Republic of Panama on Financing of Panama Canal's Fourth Bridge

April 23, 2024

Arnold & Porter advised the Republic of Panama and its Ministry of Economy and Finance on the financing of the construction of the fourth bridge over the Panama Canal, which is the most important infrastructure project currently under construction in Panama. The bridge is expected to relieve traffic congestion in Panama City and the surrounding area, facilitate the daily movement of over 70,000 vehicles, and benefit approximately 1.7 million people.

The financing consisted of both a short-term and a permanent financing transaction. The short-term financing involved the issuance of approximately US$120 million of short-term notes listed on the Official List of the International Stock Exchange Group Limited, and the permanent financing involved the issuance of approximately US$1.5 billion of Series 2024-2 senior secured notes due 2032 listed on the Singapore Stock Exchange. The short-term and permanent financing both involved a structured financing based on the sale and subsequent securitization of payment obligations issued by Panama to the bridge construction consortium, which sold the obligations to a UK trust which, in turn, issued zero coupon notes falling due annually from April 2027 to 2032.

The bridge will have a height of 75 meters over the Panama Canal's water level and 350-meter spacing between its supportive columns, allowing for the passage of current and post-Panamax vessels.

The Arnold & Porter team was led by the co-chairs of the firm's Sovereign Finance practice, Whitney Debevoise and Gregory Harrington. The team also included partners Simon Firth and Jeremy Willcocks, and associates Kardia Leung, Mateo Morris, and Trevor Schmitt.