Fibra Educa, a Mexican real estate investment trust focused on education properties, wants to raise up to $200 million of additional debt this year to keep expanding. CEO Raúl Martínez Solares said the company is targeting a local issuance of between 3.0 billion pesos ($174 million) and 3.5 billion pesos before year end, subject to required approvals.
He said the money would go "directly for acquisitions." If deals close sooner, the trust could tap a 2.5 billion peso revolving credit facility to bridge purchases, then pay it down with bond proceeds.
As of June 30, Fibra Educa's portfolio stood at 78 properties with a 41 billion peso valuation.
The planned sale would reopen bonds it issued in June. It also depends on a Tuesday investor meeting to authorize access to the full 20 billion pesos available under a 2023 debt program. For the first five years of that program the firm has faced a 12 billion peso cap, which it has already reached, Martínez Solares said.
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Institutional demand, including interest from Mexican pension funds, is driving the decision to reopen the earlier deal. A quarterly filing showed the prior 4 billion peso issuance came in at nearly 2 times subscribed. "We've already been working on this for several weeks ahead of the meeting, and we had already spoken with practically all of the investors," Martínez Solares said.
Looking further out, the firm is open to borrowing in international markets to widen its investor base, but funding in pesos aligns better with revenue that is earned in the local currency. "We're consulting with international funds and conducting analyses to determine whether the trade-off between accessing other complementary markets and taking on FX risk - or the costs involved in managing that FX risk - is reasonable enough for us to take that position," he said.
Fibra Educa, which listed eight years ago, is also exploring a follow on equity raise next year. If you hold Mexican real estate or income plays, keep an eye on how this mix of fresh debt and possible equity reshapes payouts, growth, and sensitivity to rates.
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