- The settlement occurred on April 22, 2021.
- The bonds obtained an excess demand of 3,5.
- This is the first issuance of this type by a Colombian financial institution in the international markets.
Bogotá, April 26, 2021 – Gómez-Pinzón Abogados acted as local advisor of Banco Davivienda S.A. in the first issuance in Colombia of a Perpetual Non-Cumulative Additional Tier 1 Junior Subordinated Notes issued by a Colombian financial institution in the international markets under Rule 144A/Regulation S of the Securities Act (USA), compliant with Basel III standards (subject to approval from the Financial Superintendency of Colombia (Superintendencia Financiera de Colombia) for the Notes to be classified as Additional Tier 1 Capital (Patrimonio Básico Adicional) of Banco Davivienda.
Settlement of the issuance took place on April 22, 2021. The Notes were listed on the Singapore Stock Exchange (SGX-ST). The maturity of the Notes will be subject to the issuer’s liquidation. The aggregate principal amount of the Notes is USD 500,000,000 and they will bear interest at 6.650% per annum.
The Notes garnered a total demand of USD 1.77 billion representing a 3.5x oversubscription level. The Notes are not callable by the issuer until 10 years after the issue date (subject to prior regulatory approval), are intended to constitute Additional Tier 1 Capital of the Bank and proceeds obtained therefrom will be used to strengthen the Regulatory Capital of the issuer, considering the progressive implementation of Basel III Regulatory Capital standards in Colombia (i.e., Tier 1 Capital Ratio and capital buffers) as of 2021, pursuant to Decree 1477 of 2018 and Decree 1421 of 2019.
Góméz-Pinzón advised Banco Davivienda S.A. in all matters concerning Colombian law that involved the issuance of bonds, and in particular, the matters related to the financial regulation necessary to obtain classification as Additional Tier 1 Capital (Patrimonio Básico Adicional). The team from GP was led by partner Daniel Londoño, as well as associates Jaime Hernández and Ricardo Díaz, members of the Banking, Finance & Capital Markets Practice Group.
The firm has assisted more than 5 transactions advising financial institutions and/or lenders or bond underwriters in granting a subordinated debt under Colombian financial regulation. Considering the effect of the applicable rules to this type of debt, this experience is unmatched.