Mexico's first Fibra E securities raise over US$600mn

Monday, October 17, 2016

The first public offering of Fibra E investment securities in Mexico by local construction company Promotora y Operadora de Infraestructura (Pinfra), raised some 11.8bn pesos (US$627mn) in total, Pinfra announced in a statement sent to the Mexican stock exchange.

The securities, issued through Fibra Via, a financial vehicle created by Pinfra, sold at a price of 30 pesos each.

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Of the total amount raised in the offer that took place on October 13, Pinfra underwrote 6.35bn pesos, while the rest was provided by the investing public, the statement read.

Through the placement, Fibra Vía will now own 44.4% of Pacsa, the company operating the Mexico City-Toluca highway, while Pinfra will hold a 53.6% stake in Fibra Vía. The Mexican construction company will retain 79.4% of Pacsa's shares.

Pinfra said that around 80 investors participated in the offering, including retirement fund administrators (Afores), and pension and investment funds,

In a note sent to the Mexican stock exchange last week prior to the placement, Pinfra stated that it was seeking to raise up to 12bn pesos, considering overallocation, at an average expected price of 30.5 pesos.

Even though the securities sold at a slightly lower price than expected and thus the amount raised fell short of the intended goal, Pinfra said the offering was 'a success.'

Marco Medina, infrastructure and Fibras analyst at Grupo Financiero Ve por Más, told BNamericas that, given that it was the first time that this type of securities were offered on the Mexican market and there is no previous point of comparison, it is complicated to determine whether the offering was a success or not. However, considering the country's current economic scenario, a placement like the one Pinfra carried out could be seen as a positive for the company.

Medina said that the process of selecting an asset to monetize through a Fibra E vehicle is complex and takes a long time, and that is why no more sponsors have yet announced their intentions to issue this kind of securities. However, he said that the results of the offering of Pinfra's Fibra E securities must be seen as good sign and could lead other infrastructure companies to follow suit.

This was the first time in Mexico that a company issued Fibra E securities since the government introduced the tax-efficient instrument last year in order to promote energy and infrastructure projects amidst the country's budget cuts.