Sonora State Government
Refinancing of Direct Public Debt of MXN $22,046 million.
Financing for Productive Public Investment of MXN $2,100 million.
Client’s Profile
The State of Sonora, by means of Decree number 103 published in the Official Gazette of the State on December 29, 2022, effective until 2023 (the "Decree"), received authorization to carry out (i) the refinancing and/or restructuring of the State's direct public debt, for up to MXN $22,047mm, in order to improve the current amortization profile, improve the terms and conditions of the currently agreed loans, and open budgetary spaces in the short/medium term, and (ii) the contracting of public debt through financing for MXN $2,100mm, to be used for Productive Public Investment. Blink Capital Solutions advised the State Government in the structuring of financing affecting as a source of payment a percentage of (i) the participations belonging to the Fondo General de Participaciones (FGP) and (ii) the contributions belonging to the Fondo de Aportaciones para el Fortalecimiento de las Entidades Federativas (FAFEF).
Our Role
As a result of the efforts made, outstanding results were achieved for the State and its public finances, mainly related to the Entity's liquidity.
Milestones and Results
- Structure for release and constitution of the Reserve Fund, never seen before in the public sector, which allows the release of restricted cash for the State.
- Preliminary credit ratings of AAA, national scale, for both transactions and their different terms.
- Reduction of the average surcharge, from 0.74% (above the national average of 0.68%) to 0.49%, taking the State from eighth place among the Entities with the highest surcharge to sixth place among the Entities with the lowest financial cost.
- With the effect of the Refinancing, release of budgetary spaces for MXN +$1,000mm during the current administration and for MXN +5,900mm during the next 10 years.
