Case #1485.0

The Tribasa Toll Road Trust

Publication Date: December 01, 1998
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This case demonstrates how the international capital markets were used to obtain financing for the expansion of limited access highways in Mexico. Structured as a Rule 144A transaction, the offering securitized the future Mexican Peso-denominated toll revenues of two toll roads to support US dollar denominated securities. From the sponsor's point of view, the deal provided a means to remove indebtedness from its balance sheet while retaining control of the assets. Investors purchased high-yield securities supported by two toll roads with an operating history (and no construction risk). The drastic devaluation of the peso in December 1994 more than doubled the liability in US dollars and offers an opportunity to consider the ability of the Trust to continue to support the notes.

Learning Objective:
This case allows students to focus on the financing of private infrastructure investments through the capital markets. It is designed to teach students about the risks that are customary in cross-border project financing arrangements, where lenders have limited or no recourse to the project sponsors. By looking at the financing structure devised for this transaction, students can see how specific provisions trap revenues in the Trust and protect the interests of investors.

Other Details

Teaching Plan:
Available with Educator Access
Case Author:
Jay H. Walder
Faculty Lead:
Jay H. Walder
Pages (incl. exhibits):
Funding Source:
Inter American Development Bank