Banorte Lends To Oaxaca and Naucalpan

The Municipality of Naucalpan will receive an enhanced loan for MXN486m from Banorte. The loan has a maturity of 20 years and will pay a spread of TIIE plus 175bp. The loan will be used to refinance an existing loan at a lower cost. Moody’s has assigned a debt rating of Aa1 on a national scale. Banorte will also give the State of Oaxaca a MXP250m 10 year enhanced loan, to which Moody’s has assigned a Aa2 rating on a national scale. The loan will pay a spread over TIIE. The loans are payable through trusts, to which the municipalities have pledged the flows of a portion of their federal participation revenues. The ratings actions are based on the underlying creditworthiness of the states and the strong trust structures, as well as estimated cashflows.