Project ID: 41246

CDB provides $375 million loan to Nextel Mexico for 3G Network

Commitment amount

$ 461205068.002979

Adjusted commitment amount

$ 461205068.0

Constant 2021 USD

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]

Recipient

Mexico

Sector

Communications (Code: 220)

Flow type

Loan

Level of public liability

Private debt

Infrastructure

No

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Implementation (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2011-01-01

Description

On July 27, 2011, NII Holdings announced that its operating subsidiary, Nextel Mexico entered into a U.S. dollar-denominated loan agreement with China Development Bank (CDB), under which Nextel Mexico is entitled to borrow up to 375 million USD to finance infrastructure equipment and certain other costs related to the deployment of its WCDMA network in Mexico. Assets purchased using the amounts borrowed under Nextel Mexico's equipment financing facility were pledged as collateral. As of December 31, 2013, Nextel Mexico had borrowed $300.8 million from CDB and $74.2 million of the loan proceeds remained undisbursed. The CDB financing has a floating interest rate based on LIBOR plus 2.80% (3.05% and 3.11% as of December 31, 2013 and 2012, respectively) and loans under this agreement have a final maturity of ten years, with a three-year borrowing period and a seven-year repayment term commencing in 2014. The average 6 Month USD LIBOR rate from July 2011 (when the financing agreement was signed) was .414%. The interest rate recorded is .414% + 2.80% = 3.214%. In February 2011, NII Holdings signed agreements with Huawei to provide end-to-end WCDMA solutions and build Nextel Mexico's WCDMA networks relating to its 3G spectrum licenses. On Sept. 26, 2012, Nextel Mexico announced the launch of its new 3G network, which it would be available in 34 cities, including Mexico City, Guadalajara, Monterrey, Puebla and Cancun. A second phase expansion, which was expected to cover all major Mexican cities, was scheduled to begin in 2013.

Number of official sources

2

Number of total sources

6

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Details

Cofinanced

No

Direct receiving agencies [Type]

Nextel Mexico [Private Sector]

Loan Details

Maturity

10 years

Interest rate

3.214%

Grace period

3 years

Grant element (OECD Grant-Equiv)

30.2052%

Bilateral loan

Investment project loan