Milbank Tweed, Guerrero Olivos, Simpson Thacher and Alcaíno Rodríguez advised in EEG transaction

Chilean electricity generator Empresa Eléctrica Guacolda SA (EEG) has successfully refinanced debt through a US$150 million loan from Credit Suisse First Boston. The transaction closed on April 30.

Funds were raised through the issuance by Credit Suisse of senior secured loan participation certificates, due 2013. These were sold to institutional investors in the US in a private placement under Rule 144A (a securities regulation issued by the US Securities and Exchange Commission).

The refinanced loans were: a US$52 million facility granted by Merrill Lynch Bank and Trust Company (Cayman) Limited in 1996; US$48.8 million outstanding under an engineering, procurement, construction and financing agreement granted by Mitsubishi Corporation in 1994; and US$32.3 million outstanding under a local syndicated loan dated 2001. The balance of US$13.9 million will be used to fund a portion of a reserve amount, pay related expenses and for general corporate purposes.

EEG also contributed collateral to the transaction in the form of mortgages on real estate and pledges over fixed assets of the company. It is to be used to secure the repayment and performance of the financing agreements by the debtor.

EEG issued senior secured loan participation certificates due 2013, which were placed under Rule 144A, as part of the move.

Milbank, Tweed, Hadley & McCloy gave US counsel to Credit Suisse First Boston, through a team led by partners Jonathan Green and James Ball, and including associates Loren Ambinder, Alec Borisoff and Guillermo Mackenna.

Partner Roberto Guerrero V, and associates Sebastián Yunge, Nicolás Robeson, José Miguel Hernández and José Joaquín Laso, of Guerrero, Olivos, Novoa y Errazuriz, provided Credit Suisse First Boston with Chilean counsel.

EEG took US counsel from Simpson Thacher & Bartlett LLP, through a team led by partners David Williams and Alan Brenner, and including associates Shawn White and Federico Grebe.

Partner Eduardo Rodríguez del Río, and associates José Felipe Aguilera N and Hugo Rosende Hernández, of Alcaíno, Rodríguez, Sahli, gave EEG Chilean counsel.