Lazo Abogados played a pivotal role as legal counsel to the Metropolitan Municipality of Lima (MML) as the originator in connection with the inaugural issuance within the securitization bond program for Alcabala Tax and Vehicle Tax, totaling PEN 1.2 billion. This issuance was facilitated by Credicorp Capital Sociedad Titulizadora S.A., acting as trustee and issuer on behalf of the special purpose vehicle created for the securitization program of up to PEN 4.0 billion Alcabala Tax and Motor Vehicle Tax.
The primary purpose of this first issuance is to finance a portfolio of 42 prioritized investment projects, contributing to the improvement of infrastructure and public services and the repayment of existing indebtedness. This momentous achievement marks a groundbreaking development in Peru, signifying the first instance where a public entity has embarked on a local securitization bond issuance with international placement under Rule 144A and Regulation S of the U.S. Securities Act of 1933.
Lazo Abogado's role extended to formulating the legal framework that enabled MML to issue these securitization bonds, classifying them as internal debt to comply with public budget regulations while facilitating their introduction to the international market. The firm also took charge of drafting various documents related to the private offer, all in adherence to Peruvian law. This encompassed proposing the initial draft of the bond issuance framework agreement, incorporating an unprecedented structure in Peru.
The securitization bond offering exceeded the issuance amount in demand, attracting a significant number of international investors, with approximately 95% being European and American investors. This success underscores the attractiveness and confidence in Peru and the MML, a testament to their robust financial standing achieved in 2023 through strategic public spending measures and enhanced process efficiency.
This securitization bond issuance not only marks a milestone in the history of the MML, being the first time a bond issuance denominated in soles (PEN) has achieved such an extended term, but it also positions the MML as the first local government in history to undertake this type of transaction in the capital markets.