Coatzacoalcos - Villahermosa Highway

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The project represents a concession for the rehabilitation of the 134-kilometer section of federal highway No. 180, which connect the cities of Coatzacoalcos, in Veracruz state, and Villahermosa, in Tabasco. The concession contract is held by a consortium comprised of Mota-Engil México. The consortium was awarded by the Mexican Transport Ministry a 10-year contract to rehabilitate and maintain the highway following a competitive bidding process based on lowest cost criteria. The highway is toll free to motorists, with the sponsors receiving fixed availability / "quality of service" payments (no demand risk) from SCT over a 10-year period. The project has two main phases: rehabilitation period ( first 2 years or until January 31, 2019) and conservation period (until October 31, 2026). APP Coatzacoalcos Villahermosa is the project entity that will undertake the rehabilitation of the road on behalf of the sponsoring consortium. The contract is the first generation of contracts awarded under the new PPP law in Mexico. Total investment amount was reported at MXN 2,566 million ($139.9 million as per Financial close date) and is being funded through debt and equity. The debt portion is represented by the issuance of bonds in the total amount of MXN 1,950 million ($106.3 million) arranged by Citigroup Global Markets. The remaining cost is believed to be covered by equity contribution amounting to $33.6 million. Debt to equity ratio is 76:24. Financial close occurred on October 6th, 2017. Debt represents bond issuance, not a term loan. As such, Citi acted as bond arranger.