Hogan Lovells advises on Mexico metro financing
Hogan Lovells has guided Metrorrey, the Mexican state-owned entity in charge of the metro lines in Nuevo León state, on a dual credit facility worth a combined $115 million.
The facility, split into two tranches of $70 million and $45 million, will be used to acquire 26 new trains for Line 3 as part of an initiative to modernise the state’s metro rail system.
After a competitive bidding process, the credit facilities were assigned to Banorte and Banobras. The financing structure included the assignment of all proceeds by Metrorrey to a special purpose vehicle and a specific flow-determined subsidiary payment enhancement provided by the state.
The financing has been part of a five-year process to increase its passenger intake by more than 30 per cent, with the addition of 26 trains plus the acquisition of another 24 trains earlier this year. The modernisation of Monterrey’s transport system is a flagship project of Mexico’s first independent state administration, which will conclude its six-year term in late 2021.
The trains, when delivered, will be the first Chinese trains used on a Mexican metroline. Chinese train manufacturer CRRC Zhuzhou Locomotive will provide the state with the trains in early 2021.
The Hogan Lovells team was led by partner René Arce Lozano (pictured), as counsel for Metrorrey, with support from senior associate Luis Dávalos Bichara, associates Dinorah Pensado and Jesús GarcíaValdez, and law clerk Josafath Salazar.
