Citibank Will Not Finance Line 2 of Panama Metro


News from Panama / Monday, May 30th, 2016

metro-panama-station

The consortium formed by Odebrecht and the Spanish company FCC will have to find a new bank to grant the funds that Citibank was supposed to provide under the original financing structure.

The exit of Citigroup from the $1,857 million financing structure for the design and construction of Line 2 of the Panama Metro could be due to the recent deterioration in the risk perception of the Brazilian company Odebrecht, whose rating Fitch cut on May 3, citing the “… the increased risk and uncertainty associated with lack of publication of the financial statements of the company at the end of April.”

See also: “S&P Downgrades Odebrecht

Prensa.com reports that “…The Ministry of Economy and Finance said that Citi was one of the participants in financing the contractor with a low percentage, which will be assumed by other banking entities. The Central American Bank for Economic Integration (BCIE) could provide the project with up to $200 million, which would be a greater share than agreed originally by Citi.”

“… The Line 2 Consortium said Citigroup’s exit from the financing structure will not impact the execution of the project, which is currently 15% complete. Meanwhile, the MEF said that “so far the contractor is fulfilling its contract and the Metro will ensure that the pace of project implementation is kept to schedule’.”