DEAL: the world’s largest green bond

Author: | Published: 30 Oct 2017

The Mexico City Airport Trust (Nafin) has issued a $4 billion green bond to finance a new international airport in Mexico City. The largest green bond ever to be issued worldwide, it is backed by a securitisation drawing from passenger charges at the existing Aeropuerto Internacional Benito Juárez and the planned replacement airport once it becomes operative.

The offering consists of $4 billion of senior secured notes over two tranches, due 2028 and 2047 respectively. This collateral structure ensures that even if the project were not to go ahead, the bonds would still be honoured, albeit at a slower rate. The project was unexpectedly tested during the September 19 7.1 magnitude earthquake in the city. There are also concerns that Andrés Manuel López Obrador, the frontrunner for the 2018 presidential election could cancel the entire project if victorious, suggesting that this is a worthwhile and necessary protection.

Jorge Juantorena,...