$2 Billion Green Bond Offering to Finance Construction of New Mexico City International Airport

September 22, 2016

Cleary Gottlieb is representing the Mexican Ministry of Communications and Transportation and Aeropuertos y Servicios Auxiliares, the Mexican Government agencies overseeing Mexico’s airports, in a $2 billion bond offering to finance the construction and development of the new Mexico City International Airport.

The bond offering, which was assigned a green bond assessment based on the issuer’s commitment to allocate the proceeds to finance eligible beneficial environmental projects, is part of the third stage of the financing for the development of the airport. The new airport is expected to become the largest in Latin America and serve as a regional hub.

The transaction consists of an offering of $1 billion 4.250 percent senior secured notes due 2026 and $1 billion 5.500 percent senior secured notes due 2046. The bond offerings were conducted as private placements under Rule 144A of the Securities Act and outside of the Unites States in reliance on Regulation S. The transaction priced on September 22, 2016, and is expected to close on September 29, 2016. Citigroup, HSBC and J.P. Morgan participated in the transaction as global coordinators and joint bookrunners; BBVA and Santander participated as joint bookrunners; and Credit Agricole, Inbursa, MUFG and Scotiabank participated as co-managers.

Cleary also represented the Mexican Government in the first and second stages of the financing for the construction of the new Mexico City international airport, consisting of a $1 billion term loan that closed in 2014 and a refinancing of the loan with a $3 billion revolving credit facility that closed in 2015, which has been reported as the largest syndicated revolving facility ever in Latin America.

The credit facility and the new bonds due in 2026 and 2046 are backed by a collateral structure based on a securitization of passenger charges collected and to be collected by the Mexican Government from airlines operating at the existing airport and the new airport.