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Mexico's capital markets leading infra recovery

27 November 2009

Read more: [pacifico norte] [project finance]

Vanishing bank appetite stifled sponsor interest in Mexico's road concessions. But domestic capital markets look set to do more for the recovery than government initiatives.

The sale of the Pacifico Norte roads concession package could mark the moment that Mexico fixed its roads programme. The country's transport and communications ministry, the SCT, had failed to attract any compliant bids when the roads were part of a larger package, a follow-up to the richly-valued Farac I portfolio. The smaller package is meant to be easier to digest, and came with the offer of stapled financing from Banobras, Mexico's development bank.

But the winner of the package, Carlos Slim's Impulsora del Desarrollo y el Empleo en América Latina, or IDEAL, is unlikely to use the staple. Shortly after it won the package, it closed a bond financing for an earlier collection of roads, without monoline or government support. IDEAL's chief rival, ICA,...


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