Mexico Gets $852-M Pension-Fund Backing For Iberdrola Deal

A majority of Mexican pension funds agreed to take part in an $852 million placement to help President Andrés Manuel López Obrador’s administration finance the purchase of Iberdrola SA assets, Carolina Millan and Michael O’Boyle reported for Bloomberg News.

Seven out of 10 pension funds, known locally as Afores, committed to placement of private equity certificates to fund part of a government deal to buy power plants and a wind farm from the Spanish energy giant. I Photo: Iberdola España

Seven out of 10 pension funds, known locally as Afores, committed to placement of private equity certificates to fund part of a government deal to buy power plants and a wind farm from the Spanish energy giant, according to Roberto Lazzeri, chief of staff at the Finance Ministry.

The largest committed contributions — $250 million by Afore Profuturo and $200 million by Afore Banamex — are pending final approval from the antitrust regulator Cofece, which is expected in late August, he said.

The other participants were: Afore XXI with $150 million, Afore Coppel with $120 million, Afore InverCap with $40 million, Afore Inbursa with $22 million, and Pensionissste with $20 million.

Mortgage lender Infonavit also participated with $50 million. “It’s a landmark transaction for the Finance Ministry because it marks a step in what we believe could be done in the future to boost government resources without stressing public finances,” Lazzeri said.

Local business columnist Dario Celis first reported the transaction.

The structure allows for partnering with the private sector “with a level of transparency that can’t be achieved through the budget” and “should be the norm of major future investment projects,” he added, Alex Vasquez and Scott Squires also reported for Bloomberg News.