J.P. Morgan and ING Barings are leading a $100 million syndicated loan for the Capital District of Santa Fe de Bogota in Colombia.
The deal, the first syndicated loan for a Latin American city, was launched last Friday in New York.
The loan will support any of a number of social and economic developments, including mass transit and education projects, as well as recreational projects and waste management.
Fifteen percent of Colombia's population lives in Bogota, which accounts for 20% of the country's gross domestic product.
"This is a great opportunity for bank investors to support Bogota's debut in the international capital markets through a syndicated loan facility," said Katherine Brengle, a vice president and co-head of Latin American loan syndications at J.P. Morgan.
Bank market observers said that municipalities typically access the bond markets for capital and suggested that the Bogota district was accessing the syndicated loan market because of its competitive price and liquidity.
The loan for the BBB-minus-rated municipality is priced at the London interbank offered rate plus 175 basis points.
The banks are seeking commitments of $10 million and $5 million by Dec.4.