-MXN 695 million from Interacciones (original face value) with a maturity
of 15 years.
The enhanced loan is payable through a trust (Banco Invex as trustee
F/1176), to which the state has pledged the flows and rights to 1.16% of
its federal participation revenues.
The Ba1/A1.mx debt ratings assigned to the aforementioned enhanced loans
reflect the underlying credit worthiness of the state of
(Ba3/A3.mx), supported by the following legal and credit enhancements
embedded in the loans:
1. Validity of the legal authorization of the transaction, which
authorizes the trust to be used as a mechanism for debt service payment.
2. Strong trust structure based on an irrevocable notification to the
federal treasury regarding the transfer of rights and flows of
participation revenues to the trustee.
3. Estimated cash flow generate moderate debt service coverage ratios.
projected to provide 2.3X debt service coverage at the lowest point over
the life of the loan. Under a stress case scenario, estimated cash flows
are projected to provide 1.7X debt service coverage.
4. Strong level of reserves within the master trust that represents 3.0X
debt service coverage under a stress case scenario and provide enough
cushion against payment delays.
WHAT COULD CHANGE THE RATINGS UP/DOWN
Given the links between the loans and the credit quality of the obligor,
an upgrade of the state of
pressure on the loan debt ratings. Conversely, a downgrade of the state
materially below or expectations would likely result in a downgrade of
the ratings of the loans.
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