Cleary Gottlieb Steen & Hamilton LLP is advising Mexico’s government on a buyback of debt issued to fund a new international airport in Mexico City, which is set to be cancelled mid-construction following the inauguration of Andrés Manuel López Obrador as the country’s new president.
The Mexico City Airport Trust (
Under the planned restructuring,
Hogan Lovells LLP partner Ronald Silverman in New York and Hogan Lovells (Mexico) partner Federico de Noriega Olea in Mexico City are advising a group of investors holding over US$1 billion of the notes.
The group had already joined together “for the purposes of protecting the rights and interests of the [airport] bonds held by members” amid fears that newly elected president Obrador would scrap the project.
US investment banks Citigroup Global Markets and JP Morgan Securities, together with British bank HSBC’s US asset management arm, are acting as deal managers on the restructuring. They are relying on Paul Hastings.
According to the Financial Times, the noteholders include asset managers Schroeder in the UK, T Rowe Price in the US and Lombard Odier of Switzerland.
The trust said the proposed amendments to the indentures “reflect policy changes with respect to the plan to develop a proposed new airport to serve Mexico City and the surrounding areas.”
Cleary Gottlieb also pointed to the influence of government policy, saying: “The main purpose of the tender offers and consent solicitations is to provide
Then-president Enrique Peña Nieto, who was succeeded by López Obrador on 1 December, announced in 2014 that the proposed new airport would replace the Mexico City International Airport (officially known as Aeropuerto Internacional Benito Juárez), Latin America’s busiest, which was built in the 1970s and is operating at capacity.
The construction of the new airport began in 2016. It created 48,000 jobs and was expected to create many more by the time of its proposed opening in 2020.
But López Obrador – inaugurated two days before the government’s announcement – promised to end the US$13 billion construction after an October referendum saw 70% of voters oppose the project. He said during his election campaign that the project was too expensive to maintain and awash with corruption.
López Obrador has suggested that a cheaper alternative would be to expand the existing airport onto a nearby military base.
Counsel to the Mexico City Airport Trust
Cleary Gottlieb Steen & Hamilton LLP
Counsel to the group of bondholders
Hogan Lovells LLP
Partner Ronald Silverman in New York
Hogan Lovells (Mexico)
Partner Federico de Noriega Olea in Mexico City
Counsel to Citigroup Global Markets, HSBC Securities (USA) and JP Morgan Securities
Partners Mike Fitzgerald and Joy Gallup, associate Eduardo Gonzalez and foreign associate Emilio Miñon in New York