Hogan Lovells advises the state of Nuevo León’s metro rail operator as it secures financing for expanding its network
Monterrey, Mexico, 24 January 2020 – International Law firm Hogan Lovells has guided Metrorrey, the state owned entity in charge of the metro lines in the State of Nuevo León, on a dual credit facility worth a combined US$115 million. The facility, split into two tranches of US$70 million and US$45 million, will be used to acquire 26 new trains for Line 3 as part of an initiative to modernize the state’s metro rail system.
After a competitive bidding process, the credit facilities were assigned to Banorte and Banco Nacional de Obras y Servicios Públicos SNC (“Banobras”). The financing structure included the assignment of all proceeds by Metrorrey to a Special Purpose Vehicle and a specific flow-determined subsidiary payment enhancement provided by the State.
The financing has been part of a five year process to increase its passenger intake by more than 30%, with the addition of 26 trains plus the acquisition of another 24 trains earlier this year. The modernization of the Monterrey’s transport system is a flagship project of Mexico’s first independent state administration which will conclude its 6 year term in late 2021. These trains, when delivered, will be the first Chinese trains used in a Mexican metroline. Chinese train manufacturer CRRC Zhuzhou Locomotive LTD will provide the State with the trains in the early months of 2021
The Hogan Lovells team was led by partner René Arce Lozano, as counsel for Metrorrey, with support from senior associate Luis Dávalos Bichara, associates Dinorah Pensado and Jesús GarcíaValdez, and law clerk Josafath Salazar.