Welcome to Debtwire and Inframation's Mexico Forum
The Mexican economy expanded 1% on quarter in the last three months of 2017, the most in a year. After embarking on its historic liberalization of the energy and power sectors only recently have investors and consumers begun to reap the rewards. For instance, GDP from utilities in Mexico averaged MXN 180bn from 1993 to 2017, yet its contribution jumped when it went from MXN 270bn in 2Q17 to MXN 285bn in 3Q17. The construction industry registered similar results, partly from the country's drive to build out its infrastructure, especially pipelines, storage terminals, solar panels and wind farms. As the economy gets set to expand, distressed debt investors and corporate restructuring professionals are optimistic that several of Mexico's distressed energy companies will rebound in kind.
Please join the Debtwire and Inframation teams along with esteemed panelists for a morning of discussion around Mexico's power and energy sector opportunities.
Mexico's Energy and Power Goldrush
The liberalization of Mexico's energy and power sector has provided lucrative opportunities for institutional investors as projects have become bigger in value and scale. In the last few years, various investors who were comfortable with construction risk and piled into new power projects early enough reaped impressive returns. However, how much additional power capacity will the Mexican market take on, or is the growth story over? Mexico also saw more PPAs awarded for renewable power in 2017 while recording a backlog of wind and solar for this year. As a result, the market experienced 21 renewable and power projects come to a financial close in 2017, compared to 12 in 2016, 10 in 2015 and nine in 2014.
But will the country's presidential elections throw the proverbial monkey wrench into the works if voters decide to tack to the political left? Experts will discuss:
- What are the opportunities and risks around O&G pipelines and terminal facilities throughout Mexico?
- What new energy infrastructure opportunities in the Gulf Coast, stemming from the American shale revolution, await investors?
- How are institutional investors pricing credit for various energy project finance deals?
- Are market players becoming more comfortable with Fibra-E financing in light of the pending Federal Electricity Commission's transaction?
- What will the new administration's infrastructure plan include?
Energy Restructurings Continue Amid Growing Capital Markets
Lower Pemex day rates are still challenging O&G industry revenues in Mexico, as with ODH, which was engaging bondholders after struggling to meet interest payments. Peers Oro Negro and CP Latina are also facing debt restructurings. Meanwhile, primary high-yield bond issuance in Mexico saw 24 transactions in 2017, up from nine in 2016, demonstrating growing investor appetite.
While GDP growth continues upward around 1.5% and interest rates march higher will economic expansion and corporate restructuring efforts come under pressure from political change? Experts will discuss:
- What terms will Oro Negro look to strike in restructuring agreement after a non-negotiated bankruptcy filing?
- Will CP Latina's direct address to bondholders prove a successful strategy? What can be expected from negotiations in near term?
- What kind of progress can be expected between Offshore Drilling Holding between it and its bondholders in terms of negotiating a restructuring and asking for an event of default?
- What lessons can be learned from ICA's restructuring?
- How will the new presidential administration and NAFTA negotiations weigh on new investments in the country?
- Outlook for Mexican high yield bond issuance over next 12 months.
Conclusion of Event
*Agenda subject to change