Finantial Products

Support the growth and consolidation of the national tourism industry through the promotion of profitable projects that generate employment and foreign revenue, and spur regional development. Support the growth and consolidation of tourism sector companies by facilitating second-tier loans through commercial banks for projects in Mexico. Help bolster FONATUR’s Integrally Planned Resorts and other destinations where the fund is active through the promotion of profitable projects that generate employment and foreign revenue, and spark regional development. With 30 years of experience in the tourism sector, and as developer of Mexico’s five Integrally Planned Resorts (Cancun, Huatulco, Ixtapa, Los Cabos and Loreto), FONATUR offers its non-financial services to all individuals or corporations that may require them.

OBJECTIVE

Support the growth and consolidation of the national tourism industry through the promotion of profitable projects that generate employment and foreign revenue, and spark regional development.

Facilitating tourism sector companies’ access to credit from banks by providing technical, financial and market support.

Encouraging the banks to extend credit to tourism-related companies, thus minimizing risk in this sector.

Contributing to the creation of jobs, regional development and flow of foreign revenue.

Eligibility: All tourism-related projects, regardless of geographic location, are considered eligible for assessment.

Type of project: Lodging, food and beverage service, golf courses, marinas, RV camps, travel agencies, car rentals, spas or any other type of tourism-related project.

The analytical criteria used is based on a methodology of project assessment and is founded on databanks of market, financial, economic and technical information:

Should the project be rejected, alternative feasibility proposals will be offered.

Results of the assessment will be presented in accordance with the type and size of the project, provided all of the information required has been submitted.

Back

• Application.
• Market study.
• Descriptive project report.
• Drafts:
- Terrain
- Development complex
- Architectural plans
» Ground plans, cross sections and facades.
• Investment budget breakdown, by stage, and expenditure to date.
• Construction schedule.
• Appraisal of land and existing constructions.
• Information on the operation and administration of the enterprise.
• Business plan, marketing plan, or marketing strategies.
• If applicable, statistics of the operation from the past few years (occupancy rates, sales, room rates, prices, etc.).
• If applicable, financial statements for the last three fiscal years (audited) and the latest internal records with analytical notes.
• Projected financial statements (including the basis for calculations).
• If applicable, list of existing liabilities (indicating term, maturity, balance, interest rate, etc.).
• Leverage required and conditions for contracting.

Back

ELEMENTS THAT COMPRISE PROJECT ASSESSMENT

1. Qualitative Analysis, comprising the analysis of five factors:

FINANCIAL
OPERATIONAL
TECHNICAL
MARKET
CLUSTER
COVER PAGE

2. Financial scenarios, cost analysis, and period of project execution formulated by FONATUR:
3. Quantitative Analysis, based on a matrix plan that takes into account the level of risk for each stage of the project:

FINANCING

Objective: Promote the growth and consolidation of tourism sector companies by facilitating second-tier loans through commercial banks for projects in Mexico.
Profile of projects eligible for funding: Tourism projects with proven feasibility. Prospects can be individuals or corporations involved in tourism.
Type of projects: Lodging, food and beverage service, golf courses, marinas, RV camps, travel agencies, car rentals, spas or any other type of tourism-related project.

Type of Financing:
• Investment: For construction, expansion, remodeling, installations and acquisition of real estate for tourism purposes. The total amount of credit can represent as much as 70% of the value of the project, excluding the land.
• Restructuring of Liabilities: Companies with liquidity problems may be eligible for as much as 100% financing depending on their capacity for payment.
• Working Capital: To cover short-term expenses, with a maximum 3-year term.

Characteristics:
• Maximum term: Up to 12 years, depending on the type of project.
• Grace period: Maximum of 3 years for the payment of principal.
• Amortization plan: Upon maturity or according to the standard method of monthly installments on the principal plus interest, depending on the purpose of the credit.
• Funding amount: Up to 100% of the credit in U.S. dollars and 80% in Mexican pesos.

Basic documentation required for analysis (see item 1, below):
• Credit application
• Bank’s letter of authorization
• Copy of the credit history report prepared by the bank or the following information:
• Architectural design *
• Investment budget *
• Construction schedule *
• Market information *
• Proforma financial statements (including the basis for calculations) *
• Audited financial statements (for the last fiscal year) *
* If applicable.
Interest rate plan:
• For Mexican pesos, the T.I.I.E. rate (see item 2, below) will be applied, in addition to a surcharge of up to 2 percentage points, depending on the credit term.
• For U.S. dollars, the LIBOR rate (see item 3, below) will be applied, in addition to a surcharge of up to 4.15 percentage points.
• For credit terms of more than 10 years, the rate will be fixed on a case-by-case basis (see item 4, below).
• The commercial bank will determine the corresponding term.
1. Depending on the type of project, additional information may be required.
2. T.I.I.E. refers to the interbank interest rate (Tasa de Interés Interbancaria de Equilibrio) published daily by the Banco de Mexico.
3. LIBOR refers to the London Interbank Offering Rate.
4. A surcharge equivalent to Mexico’s pyramided income tax rate (Impuesto Sobre la Renta, ISR) will be added for interests paid abroad, applying the rate in effect on the date of payment.

Authorizing Agencies:
Internal Committee (responds within a maximum of 72 hours).
• For transactions of up to 5 million dollars or the equivalent in national currency.
Technical and Fund Distribution Committee (convenes bimonthly or earlier if needed).
• For transactions of more than 5 million dollars or the equivalent in national currency.
Documents required by the bank for financing:
• FONATUR’s letter of authorization, signed in agreement by the bank.
• Credit Bond Certificate of Deposit issued by the bank.

PROCEDURE

Prepayment conditions:
• A quotation consultation must be requested from FONATUR in order to determine the possible application of a commission for partial or total prepayment.
In addition to implementing the country’s tourism policies and serving as a leader in its field, FONATUR is an agency with a business bent. With 30 years of experience in the tourism sector, it provides assistance to all individuals or corporations that wish to invest in the field of tourism.
It makes available the following programs:
Technical Assistance Program. To certify the feasibility of an investment project, which will help in obtaining financial resources, FONATUR can offer consulting and/or issue an assessment of a project, entailing the following:
• Technical aspects of the project: verifying the architectural design, costs, dimensions and functionality;
• Operating and financial aspects: seeking an optimal financial structure in order to assure the best return on investment and, consequently, secure its source of repayment;
• Regarding the market: validating or defining the market segment the project is targeting;

Joint Investments Program. To help bolster FONATUR’s Integrally Planned Resorts, as well as those tourist destinations where the fund has real estate, and through the contribution in kind of land, research and projects, up to 25% of the total investment.
In addition, and in accordance with the magnitude of the project and its benefits, FONATUR can participate jointly with the investor in seeking and formulating the best business alternative, obtaining a healthy mixture of capital and financing instruments and options. Likewise, FONATUR can, if it deems suitable, promote the participation of third-party investors or funding institutions.

Objective: To help bolster FONATUR’s Integrally Planned Resorts, as well as those tourist destinations where the fund is active, by promoting profitable projects that create jobs, generate foreign revenue and further regional development.

Eligibility: Companies that propose projects that promote synergy in areas of interest to FONATUR will be considered eligible.
Terms of partnership: FONATUR can form partnerships with tourism-related enterprises under the following conditions:
• The shared capital provided by FONATUR will solely consist of resources in kind (fund-owned land) and/or specialized research and projects.
• FONATUR’s participation will be restricted to a minority share of a maximum of 25% of the total investment and may consist of:

Maximum Percentage of Participation
Land 15%
Research and projects 5%
Specialized technical consulting 5%
The preceding percentages will be reciprocal in cases where the investor contributes capital through any of these means.
Real estate assets provided at the outset will be appraised by a development bank or the CABIN.
• FONATUR’s participation, including the shareholding participation of any other part state-owned entity, must not exceed 49% of the enterprise’s shared capital.
• FONATUR’s participation will always be of a temporary nature (up to 7 years) and it will share the risks and benefits of the project for a given period to be determined by the feasibility studies.
• FONATUR can participate in a joint venture through the formation of any legal entity (fund or business corporation) that guarantees the contribution of the partners.
Buying/Selling Terms of FONATUR’s company shares.
In any joint venture in which FONATUR participates, the private partner(s) will have the right of preference to acquire the share certificates held by the fund, in accordance with government norms in effect at the time.
Control Procedures
- FONATUR will oversee the project’s technical, operational and financial aspects.
- The legal entity FONATUR joins as a shareholder must observe the following requisites:
- Ensure that the bonds that cover any current and future capital contributions are integrated through a guaranty trust, that corporate control is retained through these bonds, and that the trust can be seized in case of failure to meet obligations.
- Guarantee FONATUR is properly represented on the company’s governing boards.
- Give FONATUR sufficient supervisory authority and ensure it receives information in a timely fashion.
- Grant FONATUR the power to select the external auditors to audit company accounts, as well as the power to appoint the company director.
- Powers of attorney for acts of ownership and obtaining joint credits with FONATUR.
Authorization Criteria
Companies, shareholders, affiliates, holding companies or subsidiaries interested in participating in joint venture tourism development projects with FONATUR must have the following requirements:
A) Moral integrity and economic solvency.
• Letters of recommendation.
• Bank letters of reference.
• Financial statements and tax records for the last three fiscal years.
B) Experience as developers and/or hotel operators.
• Technical résumé of the company.
• Company organizational chart.
• Management.
• Description of projects developed to date.
• Founding charter.
• If applicable, title deeds.
With 30 years of experience in the tourism sector, FONATUR provides assistance to all individuals or corporations that require it and wish to invest in tourism.
FONATUR offers the following consulting services:
• Concerning technical aspects of the project: certifying its architectural design, costs, dimensions and functionality;
• Concerning operating and financial aspects: seeking an optimal financial structure in order to assure the best return on investment and, consequently, secure its source of repayment;
• Regarding the market: validating or defining the market segment the project is targeting;
In addition, and in accordance with the magnitude of the project and its benefits, FONATUR can participate jointly with the investor in seeking and formulating the best business alternative, obtaining a healthy mixture of capital and financing instruments and options. Likewise, FONATUR can, if it deems suitable, promote the participation of third-party investors or funding institutions.
All joint ventures must be authorized by our Technical and Fund Distribution Committee.

TECHNICAL ASSISTANCE PROGRAM

With 30 years of experience in the tourism sector, and as developer of Mexico’s five Integrally Planned Resorts (Cancun, Huatulco, Ixtapa, Los Cabos and Loreto), FONATUR offers its non-financial services to all individuals or corporations that may require them, through the following means:
CONSULTING
Architectural Aspects:
• Architectural design of project
• Costs
• Dimensions and functionality
Financial Aspects:
• Seeking an optimal financial structure in order to assure the best return on investment and, consequently, secure its source of repayment.
Market Aspects:
• Validating or defining the market segment the tourism project is targeting and designing different marketing strategies.
Marketing Aspects:
• Designing marketing and promotional strategies.
• Recommending, in accordance with the nature of the project, the appropriate operator.
TECHNICAL SUPPORT DOCUMENTS
The fund offers the tourism sector assistance through research and documents, such as:
Basic Design Criteria for:
_ 1-star hotels
_ 2-star hotels
_ 3-star hotelss
_ 4-star hotels
_ 5-star hotels
_ Hotel-condominiums and timeshares
_ Food and beverage establishments
_ Hostels
_ Mineral spring spas and/or swimming establishments
_ Camp sites
_ RV camps

Their contents include:
_ Percentage structure of investment budget
_ Summary of the distribution of departments
_ Design and installation prototypes
_ Proposal of construction and operating equipment specifications
_ Functional correlation of departments
_ Analysis of the departments required, depending on the size of the project

Market Research (from 1998) of:
• Bays of Huatulco
• Loreto
• Ixtapa-Zihuatanejo
Containing:
• Geographical and demographic aspects of the region
• Economy
• Basic communications and services infrastructure
• Demand and its analysis
• Analysis of the supply of tourist services
• Growth and marketing outlook
Credit Statistics:
• Overview from 1974-2000
• By state
• By year

Back

OTHER SERVICES

• Specific market research and accompanying marketing strategies.
• Real estate appraisal.
• Company appraisal.
• Technical and/or financial supervision of projects.
We also offer the following financing programs:
• Credit discounts through commercial banks:
- Investment Projects
- Working Capital
- Restructuring of Liabilities
• Joint Venture Program
• Project Assessment Program