Colegios Peruanos SA, which operates under the name Innova Schools, has completed a liability management process, which resulted in the redemption and cancellation of all the securitization bonds issued in 2014 issuance up to an amount of 70 million Peruvian sol (approximately $19.5 million), through the simultaneous delivery of the same number of securitization bonds (“exchange”) issued under the securitized bonds program of 2019 (“social bond”), for which, the second issuance of the social bond was made, for an amount of 61,891,500 sol ($17 million), maturing in 2035.
Innova Schools is a leader in the educational market, with operations in Lima and in several Pervian provinces. The company provides an innovative educational model at affordable prices for an emerging Peruvian middle-class frustrated by limited access to education of an international standard.
The liability management process involved the elaboration, negotiation and closing of many documents, prospectus and contracts, which had to take into account, among other things, the termination of the bond securitization trust act of 2014 and its respective trust agreement in guarantee, subject to the suspensive condition that the bonds of the second issuance of the social bond be placed and issued, establishing, likewise, that the cash flows and guarantees released from the bond of 2014 are incorporated into the securitized bonds program of 2019.
In this operation, both in liability management and the second issuance of the social bond, several actors participated, such as the originator (Colegios Peruanos S.A.), the structuring entities (Credicorp Capital Servicios Financieros and Interbank), the trustee of the securitization program (Intertitulos), the trustee of the guarantee trust (FiduPerú), and the guarantee agent (Interbank). The process, additionally, had the approval of the respective bondholders.
This second issuance, like the first, received the social bond rating, according to the certification carried out by the international firm Sustainalytics. This issuance constitutes a milestone in the local market, since it is the first time that an educational entity carries out an issuance with a social bond rating, in order to carry out a liability management operation (bond exchange).
Carlos Saco-Vertiz and Gerardo Guzmán, Partners of BBGS Abogados, who provided the majority of legal advice of Colegios Peruanos in all these transactions, stated, “with this operation, Colegios Peruanos consolidates and reaffirms its position in the capital market, demonstrating that educational businesses, in the measure that they are organized and structured in an efficient and responsible way, can access to the capital market and take advantage of the benefits of this source of financing,” adding “it is not common to see an educational center carry out a complex transaction such as liability management, which shows the trust and support that bondholders have had and still have in Colegios Peruanos.”
BBGS Perú advised Colegios Peruanos S.A., in its role of originator with a team led by partners Carlos Saco-Vértiz Tudela and Gerardo Guzmán Espino, while Miranda & Amado, through its partner José Miguel Puiggros and associates Álvaro del Valle and Pablo Casinelli, advised the structurers, Credicorp Capital and Interbank. Intertitulos and FiduPerú were advised by their in-house legal teams.