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Structured finance deal of the quarter century: AA2000

Sep 1, 2013

$300m securitized amortizing bond, 2010

Future flow receivable securitizations have been useful - in some cases crucial - for Latin companies to overcome tricky operating environments to raise cash for the past quarter century. Aeropuertos Argentina is awarded the best structured finance deal for not just showing the funding format is still relevant, but for advancing it through innovation, giving investors comfort in a difficult jurisdiction. It was also smoothly executed under challenging conditions as one of the few corporate issuers out of Argentina since the government's default.

When investors looked at the national airport operator, they were cautious not just about the macroeconomic backdrop in the country but also the government's history of industry intervention. So in 2010 when AA2000 needed to fund airport upgrades around the country, securitizing receivables was one way forward. However, putting the B2/B rated secured amortizing note together was complex. The bond is backed by a split of revenues: close to half of the airport operator's passenger use fees, dollar receivables collected offshore through the IATA system, as well as the bulk of its duty free revenues.

The borrower must also keep 125% of the two next principal and interest payments in dollars in an offshore account.

The careful structuring paid off. Despite a December sale, leads Banco Macro, Credit Suisse and Morgan Stanley raised nearly $2 billion of orders for AA2000's first cross-border bond, and squeezed the yield down by 25 basis points to 10.75%. The bond has continued to perform.

"During the first year, the market value frequently exceeded its nominal value, winning investor recognition," says Raúl Francos, CFO of AA2000. LF



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