Mexico Infrastructure Partners in Landmark Secured Financing for $6.2 Billion Acquisition of 13 Power Plants in Mexico

Cleary Gottlieb represented a special purpose acquisition trust managed by Mexico Infrastructure Partners (MIP) in the secured financing to fund the $6.2 billion acquisition of 12 combined-cycle gas turbine plants and one wind farm from Iberdrola SA.

The acquired plants have a combined installed capacity of 8.5 GWs and comprised 55% of Iberdrola SA’s gross operating profit (EBITDA) in Mexico.

The acquisition was funded with the proceeds of a $4.2 billion secured financing and a $2.4 billion equity contribution from Mexico’s National Infrastructure Fund (FONADIN).

The secured financing consisted of a $1.39 billion syndicated bridge credit facility led by Barclays, BBVA México, Banco Santander, and SMBC, acting as global coordinators; a $2.48 billion syndicated term loan credit facility led by Banobras, Bancomext, and Nafin, acting as development facility lenders; and a $300 million letter of credit facility, with Bancomext acting as issuing bank and Bancomext, BBVA México, and Nafin acting as facility lenders. As part of the development bank facility, the borrower entered into hedging transactions for an aggregate of $600 million. UMB Bank acted as agent for each of the facility lenders and intercreditor agent for the senior creditors. CIBanco served as collateral agent for the senior creditors.

The facilities are secured by the power plants, including the real estate where they are located and ancillary equipment, as well as cash flows generated by them. The collateral documentation includes a sophisticated waterfall structure to allocate cash flows to service the debt, fund reserves, and contribute to operating and capital expenditures for the plants.

The transaction was signed on December 29, 2023, and closed on February 26, 2024.

MIP is a leading asset manager of investment funds in the infrastructure and energy sectors in Latin America.