BBVA Continental finances a mine project in PeruMarch 19, 2013
BBVA, through its Peruvian subsidiary, has signed a $75m loan with Minera Suyamarca to fund the construction of Inmaculada gold-silver mine in Ayacucho. Suyamarca is a joint venture in which Hochschild holds a 60% stake.
On March 18th, Minera Suyamarca signed a 140 million dollar loan to develop Inmaculada Project, in which BBVA will participate with $75m on the total amount, whereas the remaining will be provided by Banco de Crédito del Perú (BCP).
BBVA has structured a tailor-made financing in line with the needs of the client. The loan facility has a term of seven years with no principal payable for the first two years and includes a mechanism to reschedule repayments according to the mine's lifetime, which is expected to be more than six years given current reserves.
The total capital expenditure is $370m, which will be amounted by the loan and Suyamarca's proceeds in operating Pallancata, another gold-silver mine in Ayacucho. The quality of the investment lies on the expectation that Inmaculada Project will exceed Pallancata scale of production and duplicate Suyamarca annual EBITDA by 2015.
In addition to structuring the loan, BBVA Continental has also acted as Collateral Agent. Lenders will benefit from a perfected security interest over an account in BBVA NY in which the borrower receives its sales proceeds.
The deal has been successfully closed thanks to the cooperation among BBVA Corporate & Investment Banking units specialised in loans, risks and legal advisory, as well as bankers engaged with clients' service.