Goldman-backed Mexican highways to reopen 2018 bond issuance 

22 May 2019 - 12:00 am UTC

Mexican highway concessionaire Red de Carreteras de Occidente (RCO) has published the prospectus for a reopening of its MXN RCO 18U bond issuance, according to a public filing. 

On 11 December 2018, RCO issued MXN 8.31bn (USD 409m) in the RCO 18U series, which had a cap of MXN 20bn. RCO used the issuance to buy back 15,946,799 RCO 12 bonds for MXN 1.59bn and 10,702,951 RCO 12U bonds for MXN 6.62bn. 

Multiple sources have said that majority-owners Goldman Sachs Infrastructure Partners I and II (GSIP I and GSIP II) intend to sell part of the highway group. This could include up to a 20% stake, said one of the sources. 

Goldman Sachs Infrastructure Partners won the original FARAC I highway concession in 2007 with Mexican developer Empresas ICA, who later sold its stake to GSIP II in August 2013, giving Goldman a 70% holding in RCO. The remaining 30% is held by Mexican pension funds (AFORES) through one of the country’s first ever CKD funds. 

In the 2019 prospectus, RCO said that the proceeds of the issuance would be used for “general corporate purposes.” 

The present issuance is due to launch on 12 June with two tranches, according to the prospectus that RCO published on the Mexican stock exchange. 

The first tranch – RCO 18U (re) – will issue 20.7-year certificates denominated in Investment Units (UDIs), which are index units priced by the Bank of Mexico, while the second tranch – RCO 19 – will issue 19.2-year certificates denominated in Mexican Pesos. 

The maximum combined amount of the two issuances is capped at MXN 10bn. 

BBVA Bancomer and Santander are the bookrunners on the issuances. 

RCO comprises the Farac I highway package, which includes the Maravatío–Zapotlanejo; Zapotlanejo–Guadalajara; Zapotlanejo–Lagos de Moreno and León–Aguascalientes highways; and the additional highways bought by RCO the Querétaro-Irapuato; Irapuato-La Piedad; Tepic-San Blas and Zamora-La Piedad highways. 

RCO did not respond to a request for comment in time for publication. 


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