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Latin Airports: Brazil lacks bond ambitions
27 June 2012
Brazil’s airport privatization process initially provided commercial banks with limited opportunities, though they may yet be needed to add capacity. Financing models that feature private debt sources are taking off elsewhere in the region. By John Rumsey.
The Brazilian airport privatisations may have been a damp squib for commercial banks, but did prove the country’s popularity with operators. It was a fiercely competitive bidding process, proving that investors are still enthusiastic about Brazil, despite a slowdown in GDP growth to just 2.7% last year and the global economic crisis. Infrastructure is one of the areas of the country most prized by foreign investors, believes Luiz Claudio, a partner in the project finance group at Ernst & Young Terco in Rio de Janeiro. In the airport sector, Brazil’s traffic base is growing quickly and has expanded more than 100% per year over the last decade, noted Fitch in a report published in February.
Big price tags
The four privatisations so far have been highly heterogeneous, local bankers say. The first small greenfield airport of São Gonçalo do Amarante, in the northern city of Natal, was a pilot, but three brownfield...
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