Banobras Backs Hefty Tollroad Loan

Mexican development bank Banobras is willing to write a check for up to MXP18bn in the form of a 20-25 year loan to help the winning bidder of the Paquete del Pacifico tollroad concession, known in the market as Farac II, finance construction and maintenance. Bids for the 30-year concession are due February 27 – though a delay looks likely – and a number of local and international consortia, including groups led by ICA, IDEAL and OHL are participating. In addition to the Banobras senior loan, Fonadin, the national infrastructure fund holding the assets, will provide the winner with a subordinated tranche of debt worth up to 30% of the project’s total debt. Similar tenors are expected. Officials with knowledge of the sale suggest its value is in the MXP40bn ($2.9bn) area. “This is the biggest tollroad auction in our country’s history,” Federico Patino, head of Fonadin, which is managed by Banobras, tells LatinFinance. Patino adds that once Banobras provides the new facility to the concessionaire, it would look to syndicate out to other banks. He says bidders may also choose to raise funds with commercial banks backing them, if terms are more attractive. Sponsors decline to state who backs their bids, citing fluctuating commitments. Santander, which supported ICA and Goldman in the first auction, is heard backing the same group again. Local institutions like Banorte, Banamex and Inbursa will find funding in MXP less challenging than international banks, some of which still hold sizable pieces of the first Farac loan, despite a desire to get out early. Volatile MXP may also add to reluctance about re-entering the domestic market. The package will be awarded to the bidder who offers the highest price. The sequel is for 850km in brown and greenfield routes, versus Farac I’s 558km. At the time, Farac I was the biggest concession of its type and yielded LatAm’s largest ever local currency loan – a MXP32bn 7-year facility that left sponsors with a lot of cash and, in the ca