Deals of the year 2007: Mexico motors on local-currency deal
The funding of the purchase of Ps37.1 billion in toll road concessions demonstrates the growing maturity of the local-currency market in Mexico.
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|Sponsor and borrower: Red de Carreteras de Occidente
Total loan facility: Ps37.1 billion ($3.3bln)
Tenor: Seven years
Closing of financing: October 2007
Sole structurer and underwriter: Santander Mexico
"This sets a very strong precedent for future deals"
Despite Mexico’s investment-grade rating, the country’s crumbling infrastructure is one of the reasons why it is still viewed as an emerging market. Like almost every other country in Latin America, Mexico has massive infrastructure needs, and nothing is more pressing than road development. The government is committed to developing road infrastructure and is promoting public-private partnerships and toll road concessions to that end. The first test of the government’s policy came last year on a package of toll roads in the Occidente-Bajio-Centro region, one of the most dynamic parts of the country: luckily the auction and subsequent financing proved successful and all eyes are on the next round of sales.