O’Melveny Advises the Puerto Rico P3 Authority in US$2.85 Billion Privatization of Four Puerto Rican Toll Roads
December 22, 2023
FOR IMMEDIATE RELEASE
NEW YORK—December 22, 2023—O’Melveny advised the Puerto Rico Public-Private Partnerships Authority (“P3A”) on a long-term concession granted by the Puerto Rico Highways and Transportation Authority (“PRHTA”) to Spanish infrastructure operator Abertis Infraestructuras, S.A (“Abertis”), pursuant to a US$2.85 billion concession agreement under which Abertis will have the responsibility for operating, maintaining, and improving four existing toll roads extending across the Commonwealth of Puerto Rico for the next 40 years.
The agreement was announced on October 17, 2023 and reached financial close on December 14, 2023. The roads, known as PR-20, PR-52, PR-53, and PR-66, cover an aggregate of 119 miles and were previously developed and operated by the PRHTA.
The O’Melveny team advising the Puerto Rico Public-Private Partnerships Authority was led by partners Denise Raytis and Eric Richards, and included partners Maria DiConza, Bob Fisher, John Laco, and John Rousakis, counsel Harout Dimijian, Sarah Hoffner, David Ribner, and Mohammad Yassin, and associates Maria Benites Gutierrez, Emma Byrd, Daniel Leal, Will Tamposi, and Jonathan Yang.
About O’Melveny
It’s more than what you do: it’s how you do it. Across sectors and borders, in board rooms and courtrooms, we measure our success by yours. And in our interactions, we commit to making your O’Melveny experience as satisfying as the outcomes we help you achieve. Our greatest accomplishment is ensuring that you never have to choose between premier lawyering and exceptional service. So, tell us. What do you want to achieve? Visit us at www.omm.com; read our Insights 2023 report; learn more in our firm at-a-glance; and find us on LinkedIn, X, Facebook, Instagram, and YouTube.
Contact:
Brandon Jacobsen
O’Melveny & Myers LLP
+1 213 430 8024
bjacobsen@omm.com
# # #
The Puerto Rico Public-Private Partnerships Authority issued the following announcement:
The Puerto Rico Public-Private Partnership Authority announces the financial closing of the P3 project for the PR-20, PR-52, PR-53 and PR-66 toll roads
San Juan, Puerto Rico. December 14, 2023. – Fermín Fontanés Esq., Executive Director of the Puerto Rico Public-Private Partnerships Authority (P3A), announced today that the Puerto Rico Highway and Transportation Authority (PRHTA) and PR Toll Roads LLC (Metropistas) successfully completed the financial closing of the public-private partnership (P3) for the PR-20, PR-52, PR-53 and PR-66 toll roads; in accordance with the timeline established in the concession contract. Said financial closing included the transfer of the upfront payment of $2,850 million to PRHTA, which will allow it to cover its debt payment.
The selection of Metropistas as the concessionaire in charge of the development and road safety of the aforementioned highways was announced last October, with the objective of providing Puerto Rico with a reliable highway system, in a state of good repair and safe for drivers, capable of supporting the economic growth and development of the island. This concession also contemplates a private capital investment of over $2,370 million and the creation of more than 1,000 direct and indirect jobs.
Fontanés expressed that “this project has two important aspects. On one hand, it pursues the objective of improving safety standards, service levels and the quality of infrastructure for toll roads in Puerto Rico. On the other hand, it supports the economic growth and development of the island because it improves the budgetary and fiscal situation of the PRHTA. Furthermore, it is a transaction that is ranked as #2 in the United States and #7 worldwide with respect to similar projects, and that continues to strengthen the island's leadership in P3 matters, particularly in the area of optimization of critical infrastructure”.
For his part, the Executive Director of the PRHTA, Edwin González, explained that “with the financial closing of this transaction we give way to a new chapter for the PRHTA. The transaction will allow PRHTA to pay off its debt in full, and will put PRHTA in a position to focus its efforts on improving the toll-free road infrastructure, which represents more than 10,000 lane-miles, to provide more safe and reliable roads for all drivers”.
This transaction featured the participation and support of a solid group of local and international banks. These are Banco Popular, FirstBank, Oriental, Banesco, ING Group, Société Générale, Crédit Agricole, Intesa Sanpaolo, Mizuho, MUFG Bank and Sumitomo Mitsui Banking Corporation (SMBC). Notably, this transaction brought Japanese banks Mizuho, MUFG Bank and SMBC into the local market, which is an indication that Puerto Rico continues to strengthen itself as a credible and trustworthy destination for investment opportunities.
Julián Fernández Rodes, Chief Executive Officer of Metropistas, indicated that “this transaction represents a before and after in the island's transportation infrastructure. Not only did we complete the financial closing of the largest public-private partnership to date, committing to a total investment of $5,220 million of private funds, but we also took a giant step towards modernization, improvements in infrastructure and technology on Puerto Rico’s highways. This demonstrates our long-term commitment to the development of the island and to all Puerto Ricans. Our 20 years of experience working hand in hand with Puerto Rico and our successful track record in the world are our best testimony”
After a rigorous and competitive study, bidding and analysis process, the Government of Puerto Rico selected the company Abertis to carry out the financing, repair, design, construction, operation and maintenance of the PR-52 Highway, Autopista Luis A. Ferré; PR-53, José Celso Barbosa Highway; PR-66, Roberto Sánchez Vilella Highway; and PR-20, Rafael Martínez Nadal Expressway. Abertis, parent company of Metropistas, is a world leader in the management of road transportation infrastructure, including the operation and maintenance of approximately 21,000 lane/miles of highways through 34 concessions in 15 countries, including countries such as Brazil, Chile, France, Mexico, Puerto Rico, India, Italy and Spain. For more than 20 years, the company has worked hand in hand with the Government of Puerto Rico to improve the conditions and safety of the island's road infrastructure.
###