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Panama, November 13, 2023. Morgan & Morgan advised the UFM in the registration of a revolving program of corporate bonds (the “Bonds”) for an amount of up to US$100,000,000 with the Superintendency of Capital Markets of Panama (the “SCM”) and their listing with the Latin American Stock Exchange (“Latinex”). The Bonds may be issued in series of secured or unsecured bonds, each series with its own terms and conditions. The first series of unsecured Bonds were successfully offered and placed through Latinex for US$10,000,000. The proceeds from the sale of the Bonds allowed the UFM to redeem outstanding debt and perform capital expenditures, including investments in expanding and improving university facilities.
The scope of our work included representing the UFM in drafting all offering documentation, file such documents with the SCM and Latinex and lead the client through the administrative process before the SCM to obtain final approval for the public offering of the Bonds and advising the UFM in the process of listing and placing the first series of Bonds through Latinex, among other matters.
The matter was complicated because UFM is a foreign issuer (an issuer constituted under the laws of a country other than Panama) and the SCM imposes additional documentation and disclosure requirements for foreign issuers. We had to liaise with counsel of the UFM in Guatemala in order to draft a disclosure legend regarding any challenges that prospective investors could face in case they wanted to enforce their rights under the Bonds before the courts of Guatemala. Another complexity of the transaction was that the series of secured bonds will be guaranteed by a collateral trust, constituted by the UFM with Banco Industrial as trustee (the “Collateral Trust”), governed by the laws of Guatemala and the assets given in trust are located there as well. We had to work with the general counsel of Banco Industrial to negotiate and establish the terms of the trust in such a manner that it would comply with Panama’s securities regulation.
While the administrative process of registering the Bonds was ongoing, executives of the UFM presented the structure of the issuance before an audience in the «Investor Forum 2022», the most relevant annual event of the capital markets industry in Panama, which brings together important issuers, stock exchanges, brokerage firms, regulators and other participants from the capital markets of Latin America and the Caribbean. Banco Industrial, the largest bank in Guatemala, acts as trustee of the Collateral Trust. MMG Bank Corporation acted as Payment, Registration and Transfer Agent of the Bonds, as well as Broker-Dealer and Placement Agent of the Bonds.
Francisco Marroquin University is a private, non-profit university founded in 1971 in Guatemala City.
Partner Ricardo Arias and senior associate Alejandro Vasquez Vallarino, participated in this transaction.