Building a new airport for Mexico City has been a top public works project for President Enrique Peña Nieto. A landmark international loan last year helped it move forward.
Grupo Aeroportuario de Ciudad de México (GACM) closed a $3 billion five-year loan in October 2015. The revolving credit facility was the largest of its type in Latin America over the year and featured some special elements to mitigate risks to lenders. These factors made the transaction stand out in the Best Airport Financing, Best Infrastructure Financing Mexico and Best Loan categories.
With some $13 billion needed to build a new airport in Mexico City, GACM used a levy on passengers going through the existing airport to help finance the construction of the new one. The revenues are separated into a special purpose vehicle which issues the debt, GACM’s chief financial officer Ricardo Dueñas says. Under this structure, state-backed GACM has not pledged any guarantee to the financing, which does not constitute public indebtedness, thus minimizing government recourse.
“This SPV issued a $1 billion mini-perm two years ago and secured the $3 billion revolving credit facility,” he says. “This same facility will issue bonds in the near future.”
By opting for a five-year revolver, which can be extended two extra years, GACM saved on the cost of borrowing compared to a bond financing. Dueñas adds that the tariff structure also mitigated construction risk because the existing airport helps pay for the new facility.
“The structure gives us the most efficient cost because it is flexible, allowing us to move forward with debt plans as construction goes forward,” Dueñas says.
GACM hopes to refinance the revolver with long-term debt and build a 10-year or 30-year curve, Dueñas says.
Citi-Banamex, HSBC and JPMorgan were global coordinators on the revolver, chosen thanks to their syndication abilities, he says. The three banks later spread the risk with 10 other lenders.
Scheduled to open in 2020, the new airport will have a capacity for nearly 125 million passengers a year, setting it up to become Latin America’s busiest airport. LF
WINNER: New International Airport of Mexico City
PROJECT: New International Airport of Mexico City
LOCATION: Mexico City, Mexico
FINANCING TYPE & SIZE: $3 billion revolving credit facility
BANKS: Citi-Banamex, HSBC, JPMorgan, Santander, BBVA Bancomer, Scotiabank, Inbursa, MUFG, Crédit Agricole, Mizuho Bank, SMBC, ING, Banco Sabadell
LAW FIRMS: Cleary Gottlieb, Galicia Abogados, Jones Day, Paul Hastings