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RM | Capital structures $200 million Private Placement for Gas Natural del Noroeste/Energas
On January 7, 2021, RM Capital closed a $200 million private debt financing for Grupo SIMSA, a leading Mexican industrial conglomerate focused on the energy and infrastructure sectors. This highly successful transaction incorporated a unique structure having the two main entities of the group (Gas Natural del Noroeste & Energas) as co-issuers and represented the debut of SIMSA in the international arena.
The Senior Unsecured transaction has a 20-year final maturity and no principal amortizations during the first three years, resulting in ~12yr average life of the debt and was priced with a 3.50% fixed interest rate, a remarkably low coupon for a Mexican issuer.
This transaction was transformational for the Company in many ways as it allowed it to: (i) refinance all secured debt into unsecured, (ii) significantly extend the debt profile of the Company, (iii) simplified the debt structure (~30 bank facilities repaid with a single Private Placement facility), (iv) principal grace period will allow the Company to free up substantial cash flow that can be used to accelerate growth, and (v) significant reduction in the interest rate cost despite the increase in the tenor of the debt.
RM | Capital acted as exclusive advisor to the Company, structuring and negotiating both the Notes with institutional investors as well as the structuring and execution of an appropriate FX hedging structure. The transaction was executed on a record 7-week timeframe despite having a holiday season in between.