Global law firm White & Case LLP has advised Fondo Especial para Financiamientos Agropecuarios (FEFA) on the issuance of long-term bonds (certificados bursátiles) for a total aggregate amount of MXN 6.3 billion (approximately US$337.5 million) under its bond program as a recurring issuer.
The offering comprised three tranches, including a MXN 3.03 billion bond with a maturity of approximately 1.6 years at the risk-free floating interest rate (TIIE de Fondeo) plus a spread of 0.31 percent (FEFA 26-5), a MXN 1.61 billion bond with a maturity of approximately three years at TIIE de Fondeo plus a spread of 0.35 percent (FEFA 26-6); and a thematic bond for MXN 1.66 billion with a maturity of approximately five years at TIIE de Fondeo plus a spread of 0.40 percent (FEFA 26-2V).The FEFA 26-2V tranche is Mexico's first biodiversity bond, and the first biodiversity bond issued by a governmental entity in Latin America.
Issued under FEFA's Sustainable Bonds Framework, the proceeds of the biodiversity bond will be used to mobilize institutional capital toward the protection and conservation of natural resources, by promoting the efficient use of resources, regenerative agriculture and bio fumigation techniques that prevent soil degradation, thus strengthening the link between institutional savings and the protection of the biodiversity assets that the country’s food production capacity depends on.
White & Case has advised FEFA on all of its bond issuances since 2016.
Established in 1965, FEFA is the Mexican governmental development trust dedicated to finance the agriculture sector. It offers financing, subsidies and other services for production, recollection, and distribution of goods and services through long-term financing for the acquisition of machinery, equipment and installations, among others. FEFA is integrated as part of Trust Funds for Rural Development (FIRA), which operates as a second-tier development bank that offers credit and guarantees, training, technical assistance and technology-transfer support to the agriculture, livestock, fishing, forestry and agribusiness sectors in Mexico.
The White & Case team was led by partner Carlos Mainero, counsel Eric Quiles, and included associate Viridiana Alanis and legal assistant Ana Sofía Vivot (all in Mexico City).
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