The federal government’s offer to buy back US $1.8 billion in bonds issued to fund the cancelled Mexico City airport project has received “overwhelming support” from bondholders, the Secretariat of Finance (SHCP) said yesterday.

In a statement, the SHCP said the Mexico City Airport Trust (MexCAT) had received the consent of a “substantial majority” of the bondholders with regard to the offer, which the federal government sweetened last week only to see investors initially reject it.

According to the news agency Bloomberg, over 70% of bondholders have now approved the deal, which includes a buyback price of par plus accrued and unpaid interest.

This morning, President López Obrador praised the success of the buyback offer and declared that it “clears the way” for construction of a new airport at the Santa Lucía Air Force Base in México state.

He added that the government was concerned that it could face legal action from the bondholders, which would have delayed plans to “definitively solve the saturation problem at the current airport,” Latin America’s busiest in 2017.

Before he took office, the new president held a widely-criticized public consultation on the future of the partially-built US $13 billion airport at Texcoco, México state, and found 70% support to cancel it.

Two new runways will be built at Santa Lucía under the plan the government put to the people and the existing Mexico City airport and that in Toluca will be upgraded.

López Obrador told reporters at his morning press conference that “the army will build the Santa Lucía runways,” explaining “they have the capacity and they’re already being allocated resources for that proposal,” referring to funding in the 2019 budget.

In his inaugural speech as president after being sworn in on December 1, López Obrador pledged that the air force base will be operating as Mexico City’s new airport in three years.

The peso rallied this morning as investors gained confidence that the government had solved the bond buyback issue, gaining 1.3% to trade just under 19.9 to the US dollar.

Source: El Financiero (sp), Milenio (sp)