Latin America: FINPRO prepares Mexico’s first infrastructure debt fund

09 March 2018 - 12:00 am UTC

FINPRO is preparing a 15-year, MXN 5bn (USD 267.35m) vehicle, positioned to be the first infrastructure debt fund to launch in Mexico.

Led by CKD IM CEO Eduardo Ramos, the FINPRO investment fund will target an initial MXN 1bn raise in 3Q18 through the first issue of Investment Projects-backed Certificates (CERPI) for infrastructure and energy.

The certificates would function similarly to CKD-style funds but are designed to invest in greenfield infrastructure and energy projects in Mexico and Latin America. 

CERPIs also differ from CKD funds in that they are allowed to invest internationally as long as they allocate a minimum of 10% of the fund to domestic projects. CKD funds may not invest outside Mexico. FINPRO will have the option to invest up to 50% of the fund in other countries, a spokesperson said. 

The FINPRO fund, which will trade as FINPRCK 18 on the Mexican Stock Exchange, will offer a co-investment series worth up to MXN 20bn.

The vehicle will focus on opportunities in Mexican and other international credit markets. Senior long-term or structured loans, mezzanine debt, bridge loans and secondary market acquisition debt would be considered for investments.

The fund will target midstream, energy generation, transmission assets, transportation infrastructure, social infrastructure, environmental infrastructure, water projects and telecommunications infrastructure. 

Mexican pension funds (AFORES) and international investors may invest in the fund’s certificates, the spokesperson said.

The fund will be staffed by six executives led by 25-year industry veteran Ramos, managing director of CKD IM since August 2015. His experience includes the financing of a USD 170m solar plant in Peru and the USD 200m listing of the Monterrey-Cadereyta toll road in Mexico. 

From 2009 to 2013 he was director of the Latin American project finance and utilities team of Assured Guaranty Corp in New York. During this period, he was involved in Terminal 4 of John F. Kennedy Airport in New York, Miami’s midtown tunnel, the desalination plant of Carlsbad in California, as well as the Plaza de Castilla transport interchange in Madrid. 

Ramos will be joined by Arturo Silva, José Cabrera, Emilio Yarto, Julio Herrera and Alberto Herrejón.

The fund spokesperson told Inframation that managers have identified investment opportunities up to twice the size of the fund in the coming two years.

Some of these are exclusive opportunities and some are ready to be executed, he added. 

The fund will have a five-year investment period. 

As part of its strategy, the fund will seek strategic relationships with the leading financiers of infrastructure and energy projects. 

Santander is acting as placement agent, while Creel, Garcia-Cuellar, Aiza and Enriquez is fiscal and legal advisor. 

SEG is the technical advisor to the fund, according to the prospectus. 

According to Inframation Deals, Latin America saw 209 projects close during 2017 with a total value of USD 57.74bn – of this, USD 24.67bn was financed with loans and USD 5.58bn through capital markets offerings. This was up from 187 deals worth USD 50.05bn in 2016 financed through USD 20.59bn in loans and USD 1.62bn in capital market offerings. 

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