Press Release
June 26, 2015

Fibra UNO Creates Unique $387 Million Drop-Down Securities Offering to Fund Large-Scale Projects

MEXICO CITY (June 26, 2015) – Holland & Knight helped Fibra UNO (FUNO11.MX) set up a drop-down fund worth US$387 million ($6 billion Mexican pesos), which was closed today. The fund is the first of its kind and was closed in record time, considering that this is a novel product on market. The amount raised so far has surpassed Fibra UNO’s initial target, making this fund the largest yet in the Mexican real estate development sector. 

The offering is similar to well-known CKDs in Mexico, but this fund will only invest in real estate development projects as opposed to CKDs, which can make investments directly in Mexican corporations by acquiring capital stock. A number of criteria had to be met in order to obtain the Mexican authorities’ (such as Consar and CNBV) approval and final authorization for this landmark structured securities public offering.

The fund will allow Fibra UNO’s vehicle to issue certificates, which will be funded at 20 percent upfront and subject to capital calls so that investors make their full committed investment within a five-year period. The fund may be extended for an additional three years if certificate holders approve an extension.

The main purpose of the fund is to provide Fibra UNO with a development platform for large-scale real estate projects to be funded by investors and banks, with the additional possibility of having third parties invest directly in the projects through the development vehicles. The projects can be acquired by Fibra UNO once they are stabilized. This strategy will allow Fibra UNO distribute the income from its properties primarily to investors and not toward the development of its projects.

The Holland & Knight team acting as deal counsel was led by Mexico partner Guillermo Urbe Lara and included associates Adrian Gay Lasa, Jorge Gonzalez Carlini, Mirna Ordaz. BBVA Bancomer and Evercore acted as underwriters and structuring agents.

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