Loan supports Mexican government’s export credit agency amid weak global demand in the face of COVID-19 crisis
A multi-practice Squire Patton Boggs team represented Banco Nacional de Comercio Exterior, S.N.C. Institución de Banca de Desarrollo (Bancomext), a Mexican state-owned bank and export credit agency, in obtaining a US$600 million credit facility from a syndicate of international banks.
The facility will contribute to Bancomext’s broader COVID-19 response programs, while supporting its funding strategy amid a sharp contraction in export revenues, which account for nearly 40% of Mexico’s GDP.
Guaranteed by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group and an international financial institution offering credit enhancement guarantees and political risk insurance, the loaned funds will be used by Bancomext to support an emergency liquidity program launched in response to the COVID-19 pandemic. It will also provide working capital to companies across key exporting sectors of the Mexican economy, including the automotive, aeronautic, transport and logistics, tourism, manufacturing, construction and agriculture industries.
“We were delighted and honoured to assist Bancomext in this historic and unique undertaking at a critical point in time when Mexico’s economy requires stimulus measures,” said Alvaro J. Mestre, chair of the Mexico Desk at Squire Patton Boggs. “Our combined financial services expertise, experience with export credit agencies, international financial institutions and multilateral organizations, and our knowledge of and long-term participation in the Mexican market made us a natural fit to help Bancomext on this important project.”
Bancomext was established in 1937 with the objective of financing and promoting Mexico’s foreign commerce.
The Squire Patton Boggs Latin American practice, primarily organized through a country desk structure, consists of a multi-faceted team of over 60 global lawyers and advisors assisting clients throughout the world by providing both outbound and inbound legal and public policy services to and from Latin America. The Mexico Desk is a multi-disciplinary and multi-cultural client resource comprised of lawyers and advisors with active practices in the Mexican market who regularly offer the Firm’s clients the benefit of their know-how in core industries, awareness of global best practices and a deep understanding of how to do business in Mexico.