Year: 2022

Winner: Mante Tula Highway

Raising almost $500 million to finance a 27-year concession for a greenfield highway in
Mexico is no small feat at the best of times. But particularly so during a pandemic and when
the federal government’s infrastructure program is focused on a handful of emblematic,
treasury-funded projects.
That’s what Grupo Hycsa pulled off with the Mante-Ocampo-Tula highway project, which
won Infrastructure Financing of the Year – Mexico.
The Mexican construction firm is a small player in the infrastructure concessions business and
it took it three years to structure a deal and persuade local and international banks to finance
the new toll road.
Persuading the Tamaulipas state government to put money into a trust that would compensate
Hycsa if the traffic on the road falls short of expectations was a milestone in the financing, says
the company’s chief financial officer Ramon Casanova. As a sweetener, the government gains
from a higher-than-projected road usage.
“We showed different options to the state and found a way to guarantee the project would
generate appetite from the financial system and ensure it was bankable,” he said. “There was a
very good reaction from the system.”
The process culminated with a $435 million, 20-year loan from Mexican commercial lender
Banorte, the federal government’s development bank Banobras and Sumitomo Mitsui Banking
Corp.
While the backstop the trust provided was critical to mitigate risk, Hycsa is upbeat about
prospects for the road, which will connect the Bajio region of central Mexico with ports on the
Gulf coast, and provide a boost to trade with the U.S., and tourism. Construction is underway
and will be completed in two and a half years.
Casanova says that apart from the patient work with banks crafting the financing, the
company took other measures that contributed to the deal’s success. They included issuing
bonds for the first time in the local market, and steps to strengthen corporate governance.
“We’re a small player in concessions but we are a very serious construction firm with a very
good reputation,” Casanova says.
He says he’s sure Hycsa will not have any difficulties when it comes to refinancing the project
via the capital markets

“As a former banker for 17 years, I can say that if I was on the other side of the desk, this is
one of those projects that would gives you goosebumps if you’re able to take part in it, because
there has been a lot of attention to detail to make sure it is a successful project,” Casanova
says. “It will be candy for the capital markets.”

SPONSOR:
Grupo HYCSA


SUPPORTING INSTITUTIONS:
Banks: Banco Mercantil del Norte – Agent, Banobras, SMBC
Financial Advisor: MTH Capital
Law firms: IPP, Ritch Mueller


All supporting financial institutions and law firms were transmitted to LatinFinance by the
award category winners. For updates please email awards@latinfinance.com