LatinFinance - January/February 2017 - 42

STRUCTURED FINANCING OF THE YEAR
SYNDICATED LOAN OF THE YEAR

NEW INTERNATIONAL AIRPORT OF
MEXICO CITY
This large project has set new benchmarks for creativity
and innovation in infrastructure financing
President Enrique Peña Nieto's
ambitious plan to build a new airport
in Mexico City is one of Latin America's
biggest infrastructure projects, and it has
used creative financing to help the project
get off the ground.
The $13 billion airport, which is
scheduled to start operating in late 2020,
is moving forward thanks to an innovative
financing plan of bonds and loans that
has established a series of firsts for an
infrastructure project in the region.
"It really is a unique financing structure,"
says Ricardo Dueñas, chief financial officer
of Grupo Aeroportuario de Ciudad de
México (GACM), the government entity in
charge of the airport project. "And it's a
message we've been sending to investors."
Around 60% of the airport will be funded
directly by the Mexican government, with
private debt making up the rest. To help
finance the airport, the operating trust in
September sold $2 billion in green bonds,
the largest ever issuance of its type in Latin

America. Investors piled into the issue,
which was around six-and-a-half times
oversubscribed. The issuance was the initial
transaction of what could be a total green
bond program of up to $6 billion.
It also drew an impressive array of
investors. North American buyers made up
nearly 46% of the investor base, around 14%
were from Asia and 33% from Europe. Latin
American investors represented just over
7% of investors.
"We wanted to ensure we had a diverse
investor base and we worked hard to tell the
project's story," says Dueñas. "The bond
sale marked the first emerging-market bond
to receive a Green Bond Assessment grade
from Moody's. It also was the first green
bond issued by a non-financial institution
in Mexico.
The airport's broader financing plan
includes a $3 billion five-year loan, the
winner of the Syndicated Loan of the Year
award.
The revolving credit facility, which closed

LOAN HOUSE OF THE YEAR

CITI
Corporate lending fell across Latin
America last year. In the year to the end
of September 2016, the top 10 lenders in
Latin America granted $15.9 billion in loans,
down from $28 billion in the previous
12-month period, according to data from
Dealogic.
Citi also lent less in Latin America in
that period, signing $3.37 billion, down
from $4.75 billion a year earlier. The US
lender's market share, however, jumped to
15.1% - almost twice as much as the closest
contender, BBVA.
"It was a challenging year for syndicated
loans from a volume perspective," says
Adrian Guzzoni, head of Latin America

42 LATINFINANCE.COM - January/February 2017

Citi
Winning Loan Deals: New
International Airport of Mexico City

syndicated loan origination at Citi. "But
that's when Citi benefits from the footprint
that it has."
Citi's dominant placing in the league
tables and its leading position in some of
the more prominent syndicated loans in
2016 have earned it Loan House of the Year.
In Mexico, Citi was one of the three
global coordinators on a $3 billion revolving
credit facility to the capital city's new
international airport - LatinFinance's
Syndicated Loan of the Year. It was also a
bookrunner on a $1.5 billion revolver for

in October 2015, is the largest of its type
in Latin America. The bonds and loan are
backed by passenger charges at the existing
airport and the new facility once it opens,
helping to mitigate construction risk. The
loan can be extended for an extra two years.
"The revolving credit gives us real
flexibility," Dueñas says. "It means we can
wait for the best conditions when we want
to go back and issue more debt." LF

Green bond
Size: $2bn
Date: September 2016
Supporting Banks: BBVA, Citi,
HSBC, JPMorgan, Santander (joint
bookrunners), Crédit Agricole, Inbursa,
MUFG, Scotiabank (co-managers)
Supporting Law Firms: Cleary Gottlieb,
Galícia Abogados, Jones Day, Paul
Hastings, Muñoz Manzo y Ocampo
Syndicated loan
Size: $3bn
Date: October 2015
Supporting Banks: Banco Sabadell,
BBVA Bancomer, Citi, Crédit Agricole,
HSBC, Inbursa, ING, JPMorgan, Mizuho,
MUFG, Santander, Scotiabank, SMBC
Supporting Law Firms: Cleary Gottlieb,
Galicia Abogados, Jones Day, Paul
Hastings, Muñoz Manzo y Ocampo

Pemex and a global coordinator on a $2
billion revolver for Grupo Bimbo. Citi is also
recruiting three or four banks to participate
in a $500 million loan to fund Liverpool's
acquisition of the local Walmart subsidiary
Suburbia.
"We expect to see more acquisition
financing," Guzzoni said, adding that
the loans market could pick up in Brazil,
Colombia and Peru this year.
Citi advised Pampa Energía on its
acquisition of Petrobras' assets in Argentina
and helped arrange a $675 million loan to
finance part of the deal. "It was the first asset
that Petrobras showed to the market, so it
was important," Guzzoni says.
There are still a limited number of crossborder financing deals in Argentina, but given
the size and the significance of the PampaPetrobras deal, Guzzoni anticipates increased
lending activity in the country next year. LF
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Table of Contents for the Digital Edition of LatinFinance - January/February 2017
