Category: Project & Infrastructure Finance

Mexico’s Autopista Tenango Ixtapan de la Sal is expected to sell a MXN810m ($61m) 2043 toll road securitization today, LatinFinance understands. The deal, which is backed by future toll revenues, was postponed from December sale due to market conditions. The note may be sold in Mexican pesos or UDIs. BBVA Bancomer leads the deal. Infrastructure operator Pinfra owns the concession to run the 40km highway until 2026. Meanwhile, equipment leasing company CSI Leasing Mexico is on the road via Santander with bond of up to MXP200m ($15m) bond. The sale of the 3.5-year floating-rate ABS, expected on February 12, will be the firm’s first debt issue.

Project bonds are increasingly stealing market share from bank lenders when it comes to financing LatAm infrastructure. Debt sales are becoming more popular with issuers: Spanish engineering, construction and infrastructure conglomerate Acciona focuses first on capital markets financing when it looks at funding for any new project, Roberto Ventura, the firm’s finance director, told LatinFinance. “We are trying to reduce our reliance on bank financing as a result of the increasing reluctance of banks to provide long-term financing, and our aversion to refinancing risk as well as our goal of reducing exposure to Spanish and European banks,” Ventura said. Pension funds and other institutional investors in Latin America are emerging as a fast-growing source of financing for infrastructure bond sales. “For issuances in local currencies in countries such as Peru or Mexico, local pension funds and insurance companies have been the dominant players,” said Jean-Valery Patin, head of Latin American project finance at BNP Paribas. Nonetheless, the size of many project bonds can keep big institutional investors away: “LatAm project finance bonds tend to be quite small,” said Bianca Taylor, an emerging market credit analyst at US asset manager Loomis, Sayles & Company. “We normally look at bonds that are at least $500 million in size, where we stand to get a decent allocation.” Bank loans also have other advantages, says Acciona’s Ventura: “Many investors are still relatively unsophisticated and need some support to mitigate some risks they do not understand or are unwilling to take. There is where the role of banks may be crucial.” See the full article in the latest edition of LatinFinance: www.latinfinance.com/Article/3296638/Infrastructure-Report-Financing-innovation-The-way-back

Interchile, a transmission line project in central Chile, will likely fund at least 60% of its $1.1bn cost through a bond or a loan, LatinFinance understands. It is considering options including a mini-perm loan or a bond sale. Colombian infrastructure company Isa sponsors the transmission line project, and will discuss financing options at a January 17 board meeting, LatinFinance understands. BBVA is advising on the transaction.