Mota Engil becomes first developer to launch a CERPI

16 November 2018 - 12:00 am UTC

Portuguese developer Mota Engil has become the first developer to launch its own MXN 3bn (USD 150m) 50-year CERPI investment fund in Mexico, according to sources familiar. 

The European company, which has extensive Latin American operations, disbursed MXN 600m from AFOREs (Mexican pension funds) and institutional investors in the initial issuance of the investment certificates, according to a 13 November filing. 

The funds can be invested in projects in three sectors; Infrastructure, tourism and energy. 

The CERPI is unique because this is the first time the structure has been implemented by an infrastructure contractor, one source close to the process told Inframation

“Developers have direct access to the investment projects and know them better, so this instrument allows the financial institutions to develop a trustful and arm’s-length relationship with Mota-Engil as the contractor, developer and fund manager,” the source said. 

According to the 13 November prospectus, Mota Engil will allow the CERPI to make investments in its projects across Latin America through equity, debt or mezzanine commitments and the developer will be obliged to match each investment dollar for dollar, meaning total investments will reach USD 300m. 

The source said that the CERPI will extend Mota Engil’s sources of funding rather than eliminating other sources. 

Inframation understands that the fund has a five-year investment period with two possible extensions and could make its first investment in early 2019. 
The first source said that the CERPI would likely invest the bulk of its funds in Mexico, but that the vehicle could also provide financing for projects in Chile, Colombia, Peru, Uruguay and eventually in Central America. 

A local advisor close to the company said that the 50-year length of the fund certificates makes the vehicle different from more traditional funds which normally sell their assets a couple of years before the end of their 10-15-year lifecycles. 

The second source said that Mota Engil’s October 2017 USD 107m bond issuance for the Coatzacoalcos-Villahermosa highway conservation and maintenance PPP contract helped institutional investors familiarize themselves with the company and could have convinced them to participate in the CERPI. 

Creel, Garcia-Cuellar, Aiza y Enriquez is the fund’s legal advisor, Citi Banamex was the placement agent, MTH Capital was the structuring agent, CiBanco is the trustee bank and Mijares, Angoitia, Cortes y Fuentes (MACF) is the external investors’ legal advisor.