This case shows how international capital markets were used to obtain funding to expand the limited access roads in Mexico. Structured as Rule 144A transactions, securitization of future offer Mexican peso-denominated revenues paid two toll roads to support the U.S. dollar securities. From the point of view of the sponsor, the deal provides a means to remove debt from its balance sheet while maintaining control over the assets. Investors bought higher-yielding securities, with the support of two toll roads running stories (and no construction risk). Sharp devaluation of the peso in December 1994, more than double liability in U.S. dollars and allows to consider the target to continue to support the notes. This event allows students to focus on the financing of private investment in infrastructure through capital markets. It is designed to educate students about the risks that are common in cross-border projects, financing, where lenders have limited or no recourse to the sponsors of the project. Looking at the financing structure developed for this transaction, the students can see how specific provisions of the trap in the income trust and protect the interests of investors. HKS Case Number 1485.0 "Hide
by Jay H. Walder 14 pages. Publication Date: December 1, 1998. Prod. #: HKS061-PDF-ENG
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