Goldman Infrastructure Bullish Mexico

Goldman Sachs Infrastructure Partners remains bullish in its long term view of Mexico, despite the effects of the current crisis, and that banks have yet to take out the MXP32bn 7-year financing for its MXP44bn Farac road concession it won in 2007 with builder ICA. “On a risk-adjusted basis, given the nature of the contract we have, we’re happy with the returns,” Jonathan Hunt, VP in Goldman Sachs’ Infrastructure investment group, says, noting especially the quality of local investors and of interaction with local policy makers, compared to other markets. “We took a view that that market [Afores and other institutional investors] would be there until refinancing, and we have enough term on our loan that we think that is going to happen,” Hunt says of the Farac takeout. Ideally it would be done locally, he says, but Goldman is prepared to look everywhere. “I think [the loan holders] appreciate that we’re incredibly focused on refinancing in a reasonable timeframe. This will be done over time, and we will be opportunistic,” he adds. Hunt says he believes Farac could be replicated in the future, if not necessarily under current market conditions, as the assets will remain attractive to the local markets. Hunt emphasizes that Goldman is in Mexico, which it prefers to some other EM, for the long term. “In order to be an investor in Mexico, one must have a long term view.