Chihuahua adds to Mexican toll ABS
Issuers are taking advantage of a brighter outlook for Mexican infrastructure
The attention now being paid to Mexico and its likely growth
story has lifted several asset classes and provided opportunities to issuers.
Mexico’s state of Chihuahua raised
12 billion pesos ($915 million) this week through a 25-year ABS, the
first part of what could be a 15 billion peso transaction.
Toll road securitizations were already an important part of
the local bond market, and more are set to arrive. Concesionario de la Autopista
Monterrey-Saltillo (CAMS) is in
the September pipeline.
Chihuahua follows deals in June including a transaction from
state of Nuevo León and Red de
Carreteras de Occidente’s (RCO) domestic
retap of a successful
Infrastructure-focused plays have also
been taking advantage of new interest in equity issuance this year. Mexico
Infrastructure Partners is preparing a certificado de capital de desarrollo
(CCD) fund for Mexican pension investors, and Cemex is sponsoring a clean
energy CCD fund.
Investors are betting on long-awaited growth, boosted by a
shift in competitiveness and a US recovery. It is still expected to pick up,
through many have been tapering expectations, especially after a revision this
week of the government’s own forecasts.
Bank of America Merrill Lynch cut this week its GDP growth
forecast for Mexico to 1.5% from 2.5% for
2013 and to 3.5% from 4.0% for 2014. It cites larger than anticipated effects
of the external and fiscal shocks that affected the economy in the first half
of the year as one of the main factors.
“If GDP grows at a 3.5% annualized pace during the
second half of 2013 (our current expectation), growth would reach only 1.2% for
full-year 2013,” Itaú says. “This evidently makes our current 2.3% growth
forecast for this year (and the 2.7% market expectation) seem very optimistic.”LF