Latin America: BlackRock places third Mexican infrastructure fund

18 September 2018 - 12:00 am UTC

US-private equity investor BlackRock has placed up to USD 500m in 15-year Project Investment Certificates (CERPIs) on the Mexican Stock Exchange (BMV), according to public filings. 

While BlackRock’s previous two Mexican funds were Capital Development Certificates (CKDs) and thus restricted to investing exclusively inside Mexico, the CERPI vehicle will use its resources to invest in Latin American infrastructure projects. 

BlackRock’s two CKDs, BlackRock México Infraestructura and BlackRock México Infraestructura II, hold more than MXN 13bn in AUM, according to the [asset1] for the CERPI fund.

The fund will have a limit of up to 30% of the final total to be invested in Bolivia, Chile, Colombia, Costa Rica, Ecuador, Panama, Paraguay, Perú, the Dominican Republic or Uruguay and up to 50% to be invested in Chile, Colombia or Peru. 

A minimum of 10% of the final total must be invested in Mexico according to the terms of CERPI vehicles.

BlackRock will be a co-investor to the CERPI fund, contributing up to 3% to each investment project. 

Fund III will consider investments of between USD 25m-150m in each project and will seek a gross return of between 13-17%.  

The company identified 35 projects that require an investment of up to USD 2.81bn in total, according its prospectus.

Most of these projects (17) are in the transport sector, with the rest in the social (nine), water (three) and others (six).  

Some examples of prospective investments include the following projects: 
MXN 11.1bn in two Pemex cargo ports, MXN 35.7bn mobility projects in Mexico City, MXN 20.45bn in seven federal highway PPPs, MXN 12.38bn in 11 water projects, MXN 8.38bn in six new hospital projects. 

The second concession of Ruta 5 highway worth USD 541m, Autopista Metropolitana Puerto Montt highway worth USD 358m, hydroelectric and irrigation projects worth USD 500m+ and Codelco’s USD 1bn Radomiro Tomic desalination plant.

The USD 1bn Corredor Perimetral del Sur highway, the USD 1bn airport in Cartagena, the Santa Marta aqueduct, the Canoas water treatment plant, six hospital PPPs, seven school PPPs and eight museum PPPs. 

The USD 1.7bn Lima Ringroad project, the USD 304m Lake Titicaca water treatment plants, water concessions along the route of the Amazon river and three hospital PPPs. 

Subsidiary company BlackRock México Infraestructura III began placing the MXN 1,887.90 CERPI certificates on 12 September, seeking to raise an initial USD 100m and up to USD 500m through seven consecutive Series A issuances up to 17 December 2018. 

Investors that participate in multiple Series A issuances of the certificates are entitled to discounts on the commission that the administrator will charge.

Investors that acquire Series A certificates can also participate in subsequent Series B issuances, which allow the fund manager to leverage funds for investments that surpass the maximum amount that the Series A is able to commit to any one project.  

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