Valued at roughly $13 billion, the new international airport in Mexico City will likely be a hallmark of President Enrique Peña Nieto’s time in office. It is also slated to be one of the largest infrastrucutre projects in Latin America.

To help fund construction, Grupo Aeroportuario de la Ciudad de México (GACM), the government entity in charge of the project, obtained $2 billion from a rare green bond transaction in September last year, split evenly between 10-year and 30-year tranches.

The transaction, which brought in investors from North America, Asia and Europe, was the largest green bond deal and the largest project bond in Latin America ever, making it the winner of the awards for Best Airport Financing and Best Transport Financing.

With size, investor diversity and short- and long-dated maturities, GACM’s deal edges out strong competition such as Santiago Metro’s $500 million 2047 note and Colombian concessionaire Costera’s $264 million dual-currency effort.

The transaction was the first issue from an emerging market to receive a Green Bond Assessment grade from Moody’s and the first green bond from a non-financial institution in Mexico.

GACM structured the bonds to be backed by passenger charges at Mexico City’s existing airport, effectively negating any construction risk. The government did not have to provide any guarantees through the bond structure and avoided increasing the fiscal deficit to pay for the new airport.

Now, with 10- and 30-year bonds building a curve in the secondary market, GACM CFO Ricardo Dueñas says the state-run trust is not finished with the capital markets. GACM intends to raise $6 billion from bond sales.

“Our financing needs are covered this year, but eventually we will issue,” he says. “We are looking at long-term financings and seeing a lot of appetite from investors.”

GACM could reopen bonds or issue new notes for emerging market investors, including pension funds, insurance companies and infrastructure funds, which are asking for longer-dated debt from Latin American issuers. And with a 50-year contract in place, the new airport is well situated to capitalize on long-term investors that have a lot of money to put to work.

“You rarely see projects of this size, so it’s a good opportunity,” Dueñas says, pointing to “a great supply of capital out there with a lot of liquidity.”

BBVA, Citibanamex, HSBC, JPMorgan and Santander were the joint bookrunners on the $2 billion green bond issue, while Crédit Agricole, Inbursa, MUFG and Scotiabank were the co-managers. Cleary Gottlieb, Jones Day and Paul Hastings were the international legal advisors, while Galicia Abogados and Muñoz Manzo y Ocampo were the local legal advisors. LF

SPONSOR: Grupo Aeroportuario de la Ciudad de México (GACM)

LOCATION: Mexico City, Mexico

FINANCING TYPE & SIZE: $2 billion green bond

BANKS: BBVA, Citibanamex, Crédit Agricole, HSBC, Inbursa, JPMorgan, MUFG, Santander, Scotiabank

LAW FIRMS: Cleary Gottlieb, Galicia Abogados, Jones Day, Muñoz Manzo y Ocampo, Paul Hastings