Tribasa Toll Road Project
Tribasa Toll Road Project
Case Study-4
Submitted By:
Amardeep (P301412CMG331)
Bhupendra Malviya (P301412CMG352)
Pratik S. Soni (P301412CMG404)
Rajesh Kumar (P301412CMG413)
Shobhit Gupta (P301412CMG447)
INDEX
1. Please prepare a flow of funds diagram for this transaction to trace how toll road revenue received by the Trust is used to pay taxes and operating expenses and to make interest and principal payments as required by the terms of the offering. …………………………………..3
2. What risks to investors are inherent in this financing? ………………………..5
3. How was the transaction structure designed to minimize investor exposure to project risk? ……………………………….....7
4. The Mexican government’s decision to float the peso was unanticipated at the time of the offering. How would you expect the devaluation to affect the performance of the Notes? ………………………………….9
5. What lessons do you take out of this financing? How could this technique be used to arrange financing for other highway and facility concession projects in the developing world? ………………………………10
The Tribasa Toll Road- Case Study
Overview:
This case demonstrates how the international capital markets were used to obtain financing for the expansion of limited access highways in Mexico. Structured as a Rule 144A transaction, the offering securitized the future Mexican Peso-denominated toll revenues of two toll roads to support US dollar denominated securities.
From the sponsor's point of view, the deal provided a means to remove indebtedness from its balance sheet while retaining control of the assets. Investors purchased high-yield securities supported by two toll roads with an operating history (and no construction risk). The drastic devaluation of the peso in
Case Study-4
Submitted By:
Amardeep (P301412CMG331)
Bhupendra Malviya (P301412CMG352)
Pratik S. Soni (P301412CMG404)
Rajesh Kumar (P301412CMG413)
Shobhit Gupta (P301412CMG447)
INDEX
1. Please prepare a flow of funds diagram for this transaction to trace how toll road revenue received by the Trust is used to pay taxes and operating expenses and to make interest and principal payments as required by the terms of the offering. …………………………………..3
2. What risks to investors are inherent in this financing? ………………………..5
3. How was the transaction structure designed to minimize investor exposure to project risk? ……………………………….....7
4. The Mexican government’s decision to float the peso was unanticipated at the time of the offering. How would you expect the devaluation to affect the performance of the Notes? ………………………………….9
5. What lessons do you take out of this financing? How could this technique be used to arrange financing for other highway and facility concession projects in the developing world? ………………………………10
The Tribasa Toll Road- Case Study
Overview:
This case demonstrates how the international capital markets were used to obtain financing for the expansion of limited access highways in Mexico. Structured as a Rule 144A transaction, the offering securitized the future Mexican Peso-denominated toll revenues of two toll roads to support US dollar denominated securities.
From the sponsor's point of view, the deal provided a means to remove indebtedness from its balance sheet while retaining control of the assets. Investors purchased high-yield securities supported by two toll roads with an operating history (and no construction risk). The drastic devaluation of the peso in