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Debevoise represents MBIA in an innovative financing of Mexican toll road
December 17, 2004

Debevoise & Plimpton LLP acted as U.S. counsel to MBIA Insurance Corporation in connection with a registered offering of MBIA-insured inflation-indexed local currency bonds by a Mexican administrative trust (the "Issuance Trust") established to securitize the right to collect and receive tolls on the Cadereyta Toll Road in the State of Nuevo Leon, Mexico. The toll collection rights were contributed to the Issuance Trust by Red Estatal de Autopista de Nuevo Leon ("REA"), a decentralized public instrumentality of the State of Nuevo Leon charged with the operation and maintenance of the state’s tolled highways. Documentation for the deal was executed on December 9, 2004. The deal closed on December 16, 2004.

The transaction is a significant milestone in the development of techniques to finance infrastructure because, unlike the dominant model for toll road financings in Latin America, the economic rights underpinning the Cadereyta Toll Road financing do not arise under a long-term concession contract with the government. In order to make the financing viable, both REA and the State entered into a series of highly negotiated New York law agreements containing a covenant package designed to substitute for the legal and structural comfort that would normally be derived from a long-term concession contract with a private sector sponsor.

MBIA Insurance Company, a subsidiary of MBIA Inc., provides financial guarantees to help public- and private-sector entities access the capital they need to ensure their growth and prosperity.

The Debevoise team was led by partners Ivan Mattei, who has worked closely with MBIA on project financings for many years, and Maurizio Levi-Minzi and included associates Pierre MaugüéVivian BlancoChi Jiang  and foreign intern Armando Rivera.



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