Several firms have helped Peruvian mining company Volcan Compañía Minera refinance an existing US$400 million loan and launch a subsequent exchange offer worth US$365 million,
Two A&O Shearman offices, Claro & Cía in Santiago and Lima’s Payet, Rey, Cauvi, Pérez Abogados guided Volcan in the loan deal, whilst Cleary Gottlieb Steen & Hamilton LLP in New York and Garrigues offices in Peru and Chile advised the syndicate of lenders.
Three A&O Shearman offices assisted Volcan in the exchange offer, whilst Davis Polk & Wardwell LLP in New York and Philippi Prietocarrizosa Ferrero DU & Uría (Peru) guided an unnamed ad-hoc group of bondholders.
It is understood that Paul Hastings LLP guided the dealer managers, but these details could not be confirmed before publishing.
The loan deal closed on 5 August and the exchange offer was launched on the same day.
In the refinancing deal, Volcan amended the terms of a US$400 million credit facility which was issued in December 2021 – extending the maturity to July 2029.
The mining company also pledged to pay the outstanding balance of the loan – US$369 million – in five quarterly instalments. It will make incremental payments each year until the maturity date.
In the exchange offer, Volcan swapped its existing notes – which carry a 4.375% interest and are set to mature in 2026 – for new US$365 million notes, which have an 8.75% interest and are due in 2030.
The refinanced loan and newly exchanged notes will be guaranteed by six of Volcan’s subsidiaries – Compañía Minera Chungar, Empresa Administradora Cerro, Empresa Minera Paragsha, Compañía Industrial Limitada de Huacho, Roquel Global and Compañía Hidroeléctrica Tingo – and secured by the company’s assets.
Established in 1943 and headquartered in Lima, Volcan specialises in mining and extracting silver, zinc, copper and lead. It has five mining facilities located across Peru: Yauli, Chungar, Alpamarca, Cerro de Pasco and Óxidos de Pasco. The company also operates 12 hydroelectric power plants which power its mining operations.
Counsel to the ad hoc group of bondholders
Partner Rafael Puiggros, director Alfonso Perez Bonany and associates Sergio Rodriguez and Daniella Ginocchio in Lima
