translated from Spanish: What are and why the Government is going to buy them

the Ministry of finance in the new Government announced the purchase of a portion of the bonds that were issued in international markets to finance the construction works continue although the cancellation of the Airport in Texcoco stays standing.
Although the new Board of Directors of the airport group of Mexico City (GACM) – State-owned entity responsible for the construction of the new airport – said that this action aims to give certainty to investors, economists consulted by Political animal agreed that is a strategy to avoid claims.
Senator morenoite Marti Batres, President of the Board of Directors in the Senate, said Monday that despite the announcement of the Ministry of finance, there is a decision “that previously announced and already taken, already consulted the people, was already decided that it will not continue T airport excoco”.
What are the “green bonds” from the airport during the administration of Enrique Peña Nieto, the GACM placed in markets international bonds – debt financial instruments – for a total of $ 6 billion, in order to obtain money for the construction of the Airport in Texcoco through a trust.
These papers, called green bonds, were bought by investors in New York, United States, and were issued in four series: three billion dollars that will be paid in, 2028, 2026, 2046; the third of 3 billion expires in 2047.
According to the rules of the offered bonds, they would be guaranteed by the rate of airport use (TUA) – which is the amount passengers pay for the use of the Aeropuerto international Benito Juarez – once operations began the new airport, resources of bonds that pay the airlines, compensation, assets of the guarantee trust, among others.
Valeria Moy, Director of Mexico, how can we? He explains that an investor who bought bonds can sell them in the so-called secondary market if it is that they are not attractive or needs the money. You can also, as it is the current case, sell them to who issued them.
Although the announcement of the GACM details what will happen with this part of the bonds placed on the outside, not the investments that were made within the country, among which is the fiber E, amounting to 1,000 $ 600 million.
How many will buy it and why it was decided to do so in a bill of the new Board of Directors of the GACM, announced the offer to purchase per thousand up to $ 800 million of bonds, to cover “the vacuum of information, with very concrete action and to give certainty to the in. versionistas”.
According to the document, the bonds would begin to buy on Monday at 7 o’clock in the morning in New York by 0.90 cents, one higher price quoted to you, which was 0.77 cents.
Although the Group did not give details on the other four thousand repurchase 200 million dollars in bonds, the minutes said that it is intended to send “a message to rating agencies that have affected credit ratings from the Federal Government and Pemex” and have determined 2019 budget package for the issue of the airport “with certainty and clarity to the markets and investors”.
The Group has the option to cancel the work and not to pay the bonuses, says Valeria Moy: “that is called non or default situation, but the financial conditions that would have the country do that are giant, because at that time the interest rate you are going to heaven” “, because it means the country has a huge risk that does not pay”.
To continue the work and start repurchase of bonds, Economist Raymundo Tenorio, avoided possible legal actions related to carry the cancellation of the airport in Texcoco, as it was decided after a questionable query of the then President-elect , Andres Manuel Lopez Obrador.
“It’s a financial maneuver to pay off these bonds before cancelling the airport,” said Valeria Moy.
Monday, in his first Conference as leader, López Obrador said that the investments of the shareholders of the new airport were guaranteed and that you were also reaching agreements with the construction companies.
“It is a trust, it is a process that must be carried out, I reiterate is that the investments of shareholders are guaranteed and that it is also coming to agreements with the construction companies”, said.
Lee: Construction of the NAIM will continue while new Government negotiates debt who will pay for the minutes of the GACM points out that “it has the solid backing of TUA rates” and that repurchase shall not be with CETES – the public debt securities exchange issued by the Bank of Mexico – but does not clarify under what conditions was awarded the money for this purchase.
At a conference after the announcement of results of the launched query that led to the cancellation of the Texcoco airport, then-director of the GACM, Federico Patiño, said that the unit only has resources for 115 billion pesos in the trust.
On Monday, the new Under-Secretary of finance and public credit, Arturo Herrera said in an interview radio group formula that there are 120 billion pesos in the box of the airport that will be used will be to address all the related commitments with the work.
“With box that exists, with what already exists in a Pocket, to repay part of the debt that there be” he said, and added that the rest of the bonds are guaranteed with the airport usage fee (TUA).
Valeria Moy suggests that the announcement of the purchase of a thousand 800 million dollars in bonds may have been because “is what they have right now available to pay, they have six thousand, there is no way to pay it right now”.
regarding the 1,600 billion pesos for the fiber E, Raymundo Tenorio Economist says that it will have to resolve through debt, “then we will pay ourselves”.
Implications Jorge A. Castañeda, project coordinator of the IMCO, he warned that during the process of repurchase the Government could face with the so-called vulture funds, which are shopping a lot of bonuses to have a percentage that they sit down to negotiate directly with the Government.
“As they already have a lot of debt bought much very cheap, they have an advantageous position with the Mexican State”, he said.
With the decision to cancel the airport, points out, speeded up a series of measures requiring the Government to pay a number of huge money and “has created a gap in the finances of the budget of the next year”.
“The Mexican Government can pay this, not going to fail. Its budget is much larger but yes creates a severe problem”he explains. He said that investors who buy bonds for, Mexico already breached and problems will be presented in new issues of debt in both project-specific as the Maya train and Dos Bocas refinery, or debt that emit other parastatals.
 

Original source in Spanish