Mexico pipeline financing sets regional template

Author: Edward Price | Published: 4 Aug 2016

A two-stage financing deal to build a new natural gas pipeline in Mexico is being welcomed as a landmark transaction in the Mexican energy market, and a template for future deals in the region.

Milbank Tweed Hadley & McCloy advised the lenders, BBVA Bancomer, the Bank of Tokyo-Mitsubishi, CaixaBank and Mizuho Bank in providing a loan for the projected 36-inch natural gas pipeline. The pipeline is owned by a subsidiary of Grupo Carso, a global conglomerate company, in turn owned by Carlos Slim. 

When complete, the pipeline will run across northern Mexico for approximately 380 miles, from  Samalayuca, in the Mexican state of Chihuahua, to Sásabe in the state of Sonora. The deal is proceeding on the build, own, operate (BOO) model.

According to counsel who worked on the loan, the pipeline deal is also a landmark transaction, one that will be referenced by the market going forward....