translated from Spanish: Accounts of the Cook

the placement of an offer of repurchase bonds that financed part of the work of the new international airport of Mexico in Texcoco, raised expectations that it would continue construction in many. It will not unless President Andrés Manuel López Obrador again reborn and that would not guarantee a different destination, or arise contingencies unimaginable at this time. Texcoco is dead, for the purpose of airport, and Santa Lucia Air Base, said Lopez Obrador, is the choice. The future is clear from his perspective, although it would be worth to someone, when less for not saying that never nobody warned him, make him the Cook accounts about what they mean the costs for the project which is in the epilogue of his life , and the one in the mind of advisors President builders. In approximate numbers, accounts about Saint Lucia option are as follows: * the cost of the work, by averaging the figure of three billion dollars calculated by the engineer José María Riobóo, mastermind of the murder of Texcoco, and the seven thousand millions who estimated the Association of engineers, would be five billion dolares.* the cost of the access routes to St. Lucia and a fast train between the Air Base and the International Airport “Benito Juárez” of the city of Mexico, thousand 300 million dolares.* ade them cuaciones airport “Benito Juárez”, thousand millones.* the prepayment of bonds, mil 800 millones.* the prepayment of the fiber E, other thousand millones.* agreement with Mexican construction companies for the completion of the contracts, two thousand millones.* remediation environmental in Texcoco, two thousand millones.* the cost of a new Air Base, 1 billion. This would mean a cost of 15 thousand 100 million dollars, compared to the cost of the project of the NAIM in Texcoco, whose project was $ 13 billion. In this case, the final accounts are as follows: * the cost overruns, because they had to extend the terminal and cargo area by an increase in the number of passengers in 2017, are three billion dolares.* less, three billion by the advance of the obras.* M Enos, two billion dollars for the value of the land at the current airport “Benito Juárez”. * less, the value of the city airport, totaling two billion dollars. In both cases, removed them five billion that has the Fideocomiso of the Group airport of the city of Mexico. In this way, the cost of Santa Lucia, with that reduction, would require additional resources by 10 thousand $ 100 million, so the option proposed by Lopez Obrador is realized, without knowing for sure yet if it is possible to work simultaneously the two terminals. Finally the NAIM in Texcoco, four billion dollars would be needed. Seen in currency, the difference of five thousand 100 million dollars of difference between concluding Samta Lucia, isn’t the smartest financial decision have cancelled Texcoco in favour of Saint Lucia. But Lopez Obrador, finance calculations and the loss of confidence among investors that led to that decision of public policy, is less important than the fulfillment of a campaign promise. To deal with the contingencies of a class action lawsuit in a New York Court for the cancellation of the work, the Assistant Secretary of Hacienda, Arturo Herrera, hired three financial institutions and U.S. law firm – which costs not they were calculated in what you need to invest in Santa Lucia – so design you the plan of buyback of 30% of the bonds, with the expectation to participate in the auction of 50 + 1 of the bondholders, which cancel out the terms that were signed contracts and can renegotiate with them other conditions for the payment of the debt. The purchase offer is for 90 cents for every dollar, if one takes into account that the cancellation of Texcoco pulled the value of the bond up 77 cents dollar, opening the possibility that Yes it is possible to recover 30% of bonds that are held by foreign investors. The bet is high, and it is not something certain to achieve the task. However, the Government of López Obrador had no choice, because cancel the work without taking those forecasts, would have resulted in multimillion-dollar demands in New York, which, indeed, were put on hold. The first signs of the market have not been positive for the purpose sought by the Government. The firm of lawyers Hogan Lovelis, representing funds like Blackrock and Prudentual, which have more than 50% of the bonds of the NAIM, already ahead that they will not support buybacks in the form as presented the offer, which introduced complications for the Government less than 7 2 hours of having taken the initiative. But even if I got the aim of repurchase bonds and renegotiate the terms of the contract with 70% of the bondholders, it is not a good sign which have sent the markets. Put another way, if the Government of Mexico bought back at the lower price and investors sold the discounted, it means that they have lost confidence in the new administration and prefer to trim their losses. That is, they don’t want turn to secure in this country as there is no actions that recover the credibility of the Government. In this note:

Original source in Spanish