BEST FINANCING INNOVATION
Afores have in recent years been flush with cash to spend on long-term investments. Restrictions on where they can put it, however, have limited their options and often diverted funds from projects.
Yucatan-based grower Agropecuaria Santa Genoveva (AGSA)
developed a groundbreaking wood-revenue securitization
structure in order to raise 1.65 billion pesos from the Afores
in July, winning it the LatinFinance award for Best Financial
Innovation.AGSA, a subsidiary of Grupo Empresarial Guerra, had
been looking for more than four years to tap pension funds to
support its production of teak wood, a specialty material used
in products including outdoor furniture. The 18-year life cycle
of the teak tree makes it a great candidate for long-term
investment, explains Pablo Acedo, CFO at Cotemsa, a sister
company which handles the Guerra groups finances and
structured the AGSA transaction.The resulting deal was a 2028
bond that pays holders not a coupon or yield, but 40% of the
revenue from future teak wood sales. About 400 million pesos in
proceeds have been used...
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