More details have surfaced on a transaction that could herald XL Capital's debut as a guarantor in Mexico's domestic market (see ASR 10/31/05, p.4). In its current preliminary form, the deal is a Ps550 million ($51 million), 22-year bond backed by toll road revenue generated along the Matehuala bypass. The originator is Desarrolladora de Concesiones Omega (Decomsa) and the arranger is Banorte. Moody's Investors Service and Standard & Poor's have given the transaction preliminary triple-A ratings on their respective national scales, based on the XLCA surety. The monoline insurer has not finalized its participation in the transaction, according to a source close to the deal. XLCA is, however, listed on a preliminary prospectus registered with the Mexican Securities Exchange.
Proceeds from the deal will go to refinance debt used to build the 14-kilometer bypass, which was welcomed by truck drivers hauling cargo between the northern border town of Nuevo Laredo and Mexico City, according to a source close to the deal. Prior to the project, traffic along this vital commercial route was forced to enter the city of Matehuela, located in the northeastern state of San Luis Potosi. Decomsa began building the bypass in October 2003 and completed it last November. While a single year is usually not enough time for a toll road to generate much of a performance history, it links to an interstate that has a proven track record, the source said. As part of the same concession, Decomsa also widened a major artery in Matehuela.