US$20 million financing in connection with the Madden-Colon toll road

ARIAS, FABREGA & FABREGA advised Citibank, N.A. (Panama Branch) in the structuring of a US$20 million factoring-type revolving financing under which Concesionaria Madden-Panamá, S.A., as concessionaire of the Madden-Colon toll road, is entitled to assign receivables arising, from time to time, against BNP Paribas Panama Branch, as trustee, of the special purpose Madden-Colon Trust to Citibank, N.A., Panama Branch, as assignee.

Unlike ordinary factoring transactions, the purchase of the receivables by the lenders in this financing was made under a legal framework especially developed in one of the annexes of the Madden-Colón Concession Contract. This special framework granted the lenders certainty that the credits they purchased from the borrower would not be subject to deductions applied, or defenses, or counterclaims invoked by the Madden-Colon Trust as ultimate payor, particularly due to the non-performance of the borrower/assignor. In ordinary factoring transactions, the purchaser of the receivables could be potentially subject to said deductions or defenses.

The strategic 80 kilometers Madden-Colon Toll Road, built alongside the Panama Canal, links Panama City in the Pacific with the town of Madden, located very close to the city of Colon, the main city located at the Atlantic entrance of the Panama Canal.

Concesionaria Madden-Colón, S.A. is an affiliate of the Brazilian based Construtora Norberto Odebrecht, S.A.

María Carolina Arroyo, partner and head of the firm's Commercial and Real Estate practice group, Estif Aparicio, senior sssociate and Mario L. Fábrega, counselor, participated in this transaction.