Innovative use of Cayman Islands STAR Trust in US$750m note offering

Our Cayman Islands office is pleased to have acted as legal counsel to Banco Industrial, S.A. (Banco Industrial) – the leading Guatemalan bank - in connection with an offering of US$750m of 6.550% Subordinated Notes due 2036 (the Notes). The Notes were issued by the trustee of Industrial Subordinated Trust 2.0, a Cayman Islands STAR trust. The proceeds of the Notes were used to purchase a participation interest in a subordinated term loan made by International Finance Corporation (IFC) to Banco Industrial. 

Banco Industrial is part of Bicapital Corporation, a leading financial conglomerate, with operations in Guatemala, with a growing presence in Honduras, El Salvador and Panama. It provides a comprehensive range of corporate and retail banking, insurance and other financial services to over 3.3 million clients in the region as of September 2025. Banco Industrial, in particular, is the main banking arm of the group and is one of the most important financial banking institutions in Central America and the largest in Guatemala with more than 29.0% market share in assets, 28.9% in net loans and 26.6% in deposits as of September 2025.

This transaction represents a novel and commercially innovative use of the Cayman Islands STAR trust regime, demonstrating its flexibility and effectiveness in sophisticated capital markets structures. Our Private Capital & Trusts team and Structured Finance team have acted on the majority of such structures, which provides access to more efficient capital sources for Guatemalan financial institutions and other corporates. The trust structure offers a flexibility which is not always achievable in corporate structures.

The transaction was led by a cross-disciplinary team from our Cayman Islands office, including partners Monique Bhullar (Private Capital & Trusts) and Olga Sologub (Finance), senior counsel Thea Maitland (Private Capital & Trusts) and associate Daniel Lee (Private Capital & Trusts).

We were pleased to work again alongside Simpson Thacher & Bartlett LLP, who acted as US legal counsel to Banco Industrial.