Morgan & Morgan makes contributions to compilation of articles on the Securities Market of Panama sponsored by the Superintendency of the Securities Market of Panama
Associates Ricardo Arias and Pablo Epifanio, lawyers of the Corporate Law Department of Morgan & Morgan authored articles “Real Estate Investment Trusts (REITs”) and “A glance to compliance measures applicable to the securities market”, both included in Volume IV of the Compilation of Articles on Regulation and Operation sponsored by the Superintendency of the Securities Market of Panama.
The publication was presented by the Superintendency of the Securities Market of Panama during the celebration of the XI Version of the Investor’s Day.
Mr. Arias and Mr. Epifanio are part of the Securities Regulation practice team of Morgan & Morgan specializing in public and private offerings, representing in such transactions, issuers as well as subscribers and providing advice to regulated entities such as securities firms and investment advisors. Throughout their careers, they have acquired extensive expertise on securities offerings and have participated in multiple transactions of that kind, some involving cross-border components and usually involving dollar amounts in the millions.
Morgan & Morgan acted as local counsel to Grupo CAABSA, in connection with the asset purchase acquisition of Soho Mall, by a consortium group comprised of Mexican companies, i.e. by Grupo CAABSA and Grupo Citelis. Grupo CAABSA is a Mexican business group, which is the operator of one of the main shopping centers in Mexico. Grupo Citelis, on the other hand, is an international theatre operator and owner of the reputable brand “Cinepolis”.
Soho Mall was included in May 2016, on the Clinton List by the Office of Foreign Assets Control of the US Treasury Department. Thereafter, the government of Panama intervened in the negotiations with the US Treasury Department to arrange a possible sale of such asset.
Our team dealt with important challenges in a transaction resulting from negotiations with the Panamanian government represented by Banco Nacional de Panama to complete the acquisition of Soho Mall, and with the US Treasury Department to complete the paperwork required to remove Soho Mall from the Clinton List.
Partner Ramon Varela and associates Kharla Aizpurua O., Adolfo Campos, Pablo Epifanio, Ana Cristina Castrellon and Cristina De Roux participated in this transaction.
Morgan & Morgan advises Banco Inbursa in the purchase and assignment of Credits Master Agreement for a value of US$415 millions
Morgan & Morgan advised Banco Inbursa, S.A., Institucion de Banca Multiple, as buyer in the master agreement for the purchase and assignment of non-recourse credits through an evolving discount purchase facility for a value of US$ 415,000,000.00 of certain specific credit rights of Consorcio Linea 2 de Metro de Panama, comprised of FCC Construccion, S.A. as seller and assignor, and Constructora Norberto Odebrecht, S.A. as assignor. In addition, Metrotrust, S.A. acted as trustee, assignee and local agent for collection of assigned credits.
Consorcio Linea 2 de Metro de Panama assigned certain credits within the framework of an Assignment Agreement and master and ancillary documents for its collection of rights arising from the agreement to provide “services of engineering design, construction of civil works, installation of auxiliary lines and stations, provision and installation of an integral railroad system including rolling material, putting into work Line 2 de Metro de Panama” subscribed by Consorcio Linea 2 de Metro de Panama and Metro de Panama, S.A.
Partner Francisco Arias, and associates Kharla Aizpurua Olmos and Pablo Epifanio participated in this transaction.
Morgan & Morgan acted as counsel to DMPTY, INC., a Castillo Hermanos company, with respect to an agreement for the acquisition, from Empresa Panameña de Alimentos, S.A., of 100% of the issued and outstanding shares of Sociedad de Alimentos de Primera, S.A. (SAPRISA); owner of the Bonlac brand and line of dairy products.
With this acquisition, the Castillo Hermanos group, based in Guatemala, would add a new line of business, and an important brand, to their various investments throughout Central America, including those in the beer industry, refreshments, carbonated and non-carbonated drinks, juices, among others.
Partner Francisco Arias and associates Aristides Anguizola, Pablo Epifanio, Milagros Caballero and Allen Candanedo, participated in this transaction.
Morgan & Morgan advises Banco La Hipotecaria, S.A. in a cross-border securitization of mortgage backed securities for an amount of up to US$45,000,000
Banco La Hipotecaria, S.A., acting as trustee of the Thirteenth Mortgage-Backed Notes Trust, registered Mortgage Loans Notes in three tranches for an amount of up to US$45,000,000 with the Superintendency of Capital Markets of Panama, which notes were successfully placed through the Panama Stock Exchange. Payments due to holders under the Mortgage Loan Notes are guaranteed by a collateral trust constituted under the laws of Panama. The assets of the collateral trust are composed by mortgage loans granted to residents of El Salvador by La Hipotecaria, S.A. de C.V., which is Banco La Hipotecaria’s affiliate in El Salvador and dedicated to the origination of mortgage loans in said country. BG Trust, Inc., an affiliate of Banco General, is the trustee of the collateral trust.
This transaction was a cross-border securitization because the mortgage loans originated in El Salvador were sold to a collateral trust constituted under the laws of Panama in order to guarantee the Mortgage Loan Notes, the Series A of which were acquired by a grantor trust in the United States of America. Said grantor trust intends to sell trust certificates in a Rule 144A/Reg S offering. Payments due to investors under the trust certificates benefit from a guarantee granted by The Overseas Private Investment Company (OPIC), an agency of the U.S. government. The Series B and Series C Mortgage Loan Notes were acquired by local investors in Panama.
Partner Francisco Arias, and associates Ricardo Arias, Roberto Vidal and Pablo Epifanio, participated in the transaction.
Morgan & Morgan advised MMG Bank Corporation in the registration with the SMV of MMG Global Allocation Fund, Inc. as an investment fund authorized to publicly offer up to 20,000,000 of its Ordinary Class B Shares
Morgan & Morgan provided legal counsel to MMG Global Allocation Fund, Inc. (“MMG GAF”) in its constitution as a close-ended fund of funds. For said purpose, Morgan & Morgan provided advice to MMG GAF in registering with the Superintendence of the Securities Market of Panama (the Superintendencia del Mercado de Valores or “SMV”). The investment objective of MMG GAF is capital appreciation by acquiring a diversified portfolio of assets comprised of fixed-income, variable-income and alternative instruments derived from operations in Panama and abroad. MMG GAF was authorized by the SMV to publicly offer up to 20,000,000 of its Ordinary Class B Shares at an initial offering price of US$10.00.
MMG Bank Corporation acted as Arranger, Payment and Transfer Agent, Custodian and Placement Agent of MMG GAF and MMG Asset Management Corp. was appointed as Investment Manager of MMG GAF. Morgan & Morgan worked closely with MMG Bank Corporation and MMG Asset Management in the process of registering MMG GAF with the SMV and in the definition of the final terms and conditions of its Ordinary Class B Shares.
Partner Francisco Arias, and associates Ricardo Arias A., Pablo Epifanio and Cristina de Roux, participated in this transaction.
Growth of the real estate industry in Panama in recent years is noticeable, not just locally but at a regional level as well. Iconic architectural works such as the Trump Tower, F&F Tower (popularly called the “Screw”) among others, attracts positive criticism from different actors in the business and associations in the construction, development and promotion of the real estate business.
In part, real estate growth in Panama is due to the ease in the execution of real estate transactions. Regular practice by local promoters excluded any kind of prior inquiry or investigation of these transactions, placing their trust, in the best of cases, on local financial institutions for those requiring financing.
In recent years, we’ve seen international pressure mostly from the Financial Action Task Force (better known as FATF), who has pushed for strict measures worldwide to prevent the use of financial and service platforms for money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction.
Panama has joined this international effort and sanctioned Law 23 of April 27, 2015 (“Law 23”). Said law regulates due diligence measures on a risk based approach for all participants in the financial sector (Financial Institutions) and creates also the Superintendence for the Supervision and Regulation of Obligated Non-financial Persons (the “Superintendence”). Within such Obligated Non-financial Persons supervised by the Superintendence and regulated by Law 23, we find promoting companies, real estate agents, real estate brokers and construction companies, whether general or specialized contractors.
By Resolution No. JD-001-2015 of August 14, 2015, the Superintendence separated and regulated specifically agents of the real estate sector listed in Law 23. Said resolution restricts its application to promoting companies, real estate agents and brokers engaging the in purchase transactions on behalf of their customers.
Under Resolution No. JD-001-2015, each agent mentioned above must apply different due diligence measures in accordance with their duties and activities, to verify customer identity, nature of the transaction and source of funds to be used in the transaction. Pursuant to the risk based approach defined for each obligated non-financial person, a minimum basic due diligence applies to customers on whose behalf the purchase is made in the case of promoters, real estate agents and brokers; and in the case of contracting companies, at least a basic due diligence shall be applied to the promoting company with whom it has a business relation.
Due diligence measures in Law 23, from basic which include obtaining detailed and reasonably verified customer information, to strengthened for clients who according to the risk based approach may be high risk (for instance, a politically exposed person [PEP], citizens from high risk countries as per FAFT report, etc.), establish an obligation for each actor in the real estate and construction fields to comply with before entering into a business relation with the customer. Based on the foregoing, many warn of a slow-down in regulated services more particularly, those offered by obligated non-financial persons, which would substantially hold back Panamanian economy, and even foreign investment given the amount of red tape necessary to comply with the due diligence measures in Law 23 and regulations for the sector.
Notwithstanding the above, I feel optimistic and believe this is a great step for the economy; the due diligence filters established in Law 23 will correct or at least reduce the contamination margins from money laundering funds and assets of the financial and services systems in Panama. In other words, despite the initial trauma for the different sectors regulated by Law 23 in implementing the measures and reports for due diligence compliance established therein, we will adapt and continue doing business in a more transparent way to benefit us not just locally, with systems less contaminated with money laundering related transactions, but also internationally, by projecting a more serious image with better supervised systems.
Morgan & Morgan advised majority shareholders of Banco Universal, S.A. in the sale of their shareholding stake in favor of Canal Bank, S.A. (BMF)
Morgan & Morgan represented the majority shareholders of Banco Universal, S.A. in connection with the sale of their shareholding stake to Canal Bank, S.A. (BMF).
The Superintendency of Banks of Panama approved the transaction after taking administrative and operating control of Banco Universal, S.A. and then ordering the reorganization of said banking institution.
Our team of lawyers dealt with important challenges in a transaction resulting from a government process that involved many other actors interested in obtaining control of Banco Universal, S.A. without greater regulation.
Partner Francisco Arias and associates Roberto Vidal and Pablo Epifanio, participated in this transaction.
Morgan & Morgan advised Balboa Bank & Trust Corp. as arranger in the public offering by Latin American Kraft Investment Inc. of 25,000 Preferred Stocks, for an amount up to US$25 Million
Morgan & Morgan advised Balboa Bank & Trust, Corp., as arranger in the public offering of 25,000 Preferred Stocks by Latin American Kraft Investment Inc. (“LAKI”), a multinational company with important presence in Central and North America, and a leader in the packaging industry. In such public offering Morgan & Morgan also advised Balboa Securities Corp., an affiliate of Balboa Bank & Trust Corp., which acted as placement agent in the primary market. LAKI registered the US$25,000,000 issuance with the Superintendency of Capital Markets of Panama and listed the securities with the Panama Stock Exchange. This is the first public offering of securities by LAKI in the Republic of Panama.
Partner Francisco Arias and associates Ricardo Arias and Pablo Epifanio, participated in this transaction.
As part of our Pro Bono program, on May 23 a group of lawyers and volunteers from Morgan & Morgan took part in a free legal assistance fair organized by allied organizations such as Movimiento Nueva Generación Curundú, APROJUSAN and Fundación Amaneceres. During the activity, a group of 50 people received free legal advice and participated in a workshop covering topics related to domestic violence and healthy relationships.
The team from Morgan & Morgan was represented by attorneys Eduardo Castroverde, Ricardo Arias, Allen Candanedo, Dorcas Osorio, Alexis Medina, Mayté Sánchez and Pablo Epifanio; as well as volunteers Versellis Figueroa, Johanne Carrión, Beatriz Espino, Angélica Ortíz and Paola Pérez.
Through initiatives such as this, Morgan & Morgan confirm its commitment to the Pro Bono Declaration of the Americas and equal access to justice.
Como parte de nuestro programa Pro Bono, el pasado sábado 23 de mayo un equipo de abogados y voluntarios de Morgan & Morgan participaron en varias jornadas legales, organizadas por el Movimiento Nueva Generación Curundú, APROJUSAN y la Fundación Amaneceres. Durante estas jornadas se ofreció orientación legal gratuita a más de 50 personas, quienes además recibieron capacitación en temas de violencia doméstica y relaciones sanas.
El equipo de Morgan & Morgan estuvo conformado por los abogados Eduardo Castroverde, Ricardo Arias, Allen Candanedo, Dorcas Osorio, Alexis Medina, Mayté Sánchez y Pablo Epifanio; y los voluntarios Versellis Figueroa, Johanne Carrión, Beatriz Espino, Angélica Ortíz y Paola Pérez.
Con iniciativas como ésta, Morgan & Morgan reafirma su compromiso con la Declaración Pro Bono de las Américas y con el acceso igualitario a la justicia.