Farac Takeout Bonds on Back Burner

Few, if any, lenders expect ICA and Goldman Sachs to take out a 7-year MXP32bn mini-perm used to acquire the Farac I concession, any time soon, given the poor state of cross border and local Mexican markets. Those anxious to get out will have to take a deep breath, as a bond sale to pay down the jumbo local currency loan is definitely a ways off. “We are working with Afores to see what their interest is,” Alonso Quintana, CFO of ICA, tells LatinFinance. “We have 7 years to do this,” he adds. In 2007, some lenders in the facility expressed frustration at the sponsors’ lack of transparency on timing of the takeouts, which they expected would take place within several months of the loan funding. The facility was led by Santander, Dexia and NordLB, with WestLB, ING, Inbursa and Banobras as MLAs. IDEAL’s July 2008 placement of MXP7bn in local bonds backed by tollroad assets sparked hope that a similar transaction could be executed for Farac takeouts. While the IDEAL deal seems to have confirmed the structure’s viability, a plan to actually to do so is still a ways off. The notes were placed with local pension and mutual funds.