FARAC Brings Jumbo Peso Loan

Mexico’s jumbo FARAC tollroad financing is coming to market today at a bank meeting in Mexico City. A $3bn equivalent peso 7-year bullet is on the block, and a meeting is also scheduled for Thursday in New York. Santander is the lead on the biggest Mexican peso denominated loan to date. Dexia and NordLB apparently signed up early, but bankers who have seen the invite say Santander is the only name on it, making some question their involvement. Reception to the transaction will be an interesting first indication of how global turmoil will affect the LatAm loans market, which has thus far barely reacted. “That’s going to test the market,” says a banker not on the deal. The loans market is also waiting for a $3bn issue from Mexico’s CFE, and seems largely open for business. For the right high grade names, the feeling is that deals will continue to get done. However, it is only a matter of time before the subprime meltdown in the US starts to bite. Goldman Sachs and ICA are developing the $4.1bn FARAC toll road package in Mexico.