The Inter-American Development Bank has agreed to lend $150 million to the Macquarie Mexican Infrastructure Fund, which raised Ps.$5.2 billion ($420 million; €318 million) last year.
The loan is not tied to a particular project, according to Daniela Carrera, chief of the financial markets division at the Inter-American Development Bank (IADB), but will instead be used to support any project that is eligible for the fund.
We know that when we put our name into it, it brings some additional interest of entities that might not have been there before
“We know that when we put our name into it, it brings some additional interest of entities that might not have been there before,” Carrera said, adding: “By putting IDB there, we hope to foster even more participation.”
The fund has already helped foster more investor participation in Mexican infrastructure by tapping into a new source of capital. Mexican pension funds, previously barred from investing in private funds, are able to participate in the fund using a new type of security called certificados bursátiles de capital de desarrollo. The securities are listed on the Mexican stock exchange and can be purchased by the pensions, who can then participate in the fund while still having some opportunity to exit, Carrera said.
The Macquarie Mexican Infrastructure Fund has a listed trust which raised $268 million from seven Mexican pension funds in 2009 via these certificados. A separate, unlisted trust raised money from private investors bringing the fund’s size to over $400 million.
Macquarie’s target for the Mexican fund is $1.1 billion. It has not issued any updates on fundraising since last year’s close, according to a spokesperson.
Carrera said that it takes time for investors “to feel comfortable with a new type of vehicle and instrument” and that IADB hoped to encourage further investment in Macquarie from pension funds. The IADB's overall mission is to provide development financing across Latin America and the Caribbean, where it has 26 member countries, according to its website.
In related news, the Macquarie Mexican Infrastructure Fund also released details of its first acquisition, a Ps.$1.54 billion (€94 million ; $124 million) purchase of a company that has 20 year contracts to reconstruct and maintain 320 kilometres of existing toll-free highways in the Mexican state of Durango.
In a statement, Macquarie said the transaction has an enterprise value of around $125 million and Decarred has secured approximately Ps.$1.1 billion in long term debt financing from HSBC and Banamex, a Citigroup subsidiary. The acquisition of Desarrollos Carreteros del Estado de Durango (Decarred), was made public in regulatory filings earlier this month.
Decarred was previously owned by Cemex and Rostec, a Durango-based road infrastructure and construction company. Cemex recently completed reconstruction of the roads and had a fixed-term contract to continue to perform maintenance until 2029.
Decarred receives monthly availability payments from state of Durango, which are adjusted for inflation, according to a Macquarie spokesperson.
Earlier this year, the fund successfully bid on a toll road concession together with Portuguese transport firm Ascendi and Brazilian toll road operator CCR. But in March Mexican authorities rejected all the bids for the project because “none of the contestants reached the Technical Reference Value (related to the initial payment to the State)” required for the project, Ascendi said in a statement at the time.
Mexico’s National Infrastructure Plan estimates the country’s investment needs will total $206 billion by 2012. Of that $206 billion, $45 billion is expected to come from the private sector, the IADB said in a statement.