Fibra Mty manages its capital to ensure business sustainability, while at the same time maximizing returns to its investors through the optimization of debt and equity balances.
The objectives of capital management are to maintain the sufficiency and availability of the operating funds and suitable mixes of funding sources required to achieve the following purposes:
An optimal risk-adjusted level of distributions for Fibra Mty’s investors
The execution of Capex that maintains or improves the quality of the operating properties
Providing the necessary resources for the acquisition of new properties and covering debt servicing costs
The management constantly evaluates its leverage and/or CBFI issuance needs through financial forecasts, including the operating portfolios as well as announced portfolio acquisitions, which are subject to approval by the Technical Committee with previous authorization of the Indebtedness Committee.
Financial Risk Management
The objective of financial risk management is to:
Meet financial expectations, operating results and cash flows that improve the quoted price of Fibra Mty’s CBFIs
Ensure Fibra Mty’s capacity to perform distributions to CBFI holders
Comply with any debt obligation, whether future or current
The management coordinates access to financial markets, supervises, and manages risks related to Fibra Mty’s operations. This is accomplished through internal risk reports that analyze exposures by degree and magnitude, which are subject to the approval of the Technical Committee with prior authorization of the Indebtedness Committee. These risks include:
Credit risk. Fibra Mty’s maximum exposure to credit risk is determined by cash equivalents and accounts receivable, in addition to financial instruments, as shown in the latest consolidated financial statement. In compliance with the provisions of Mexican Income Tax Law, Fibra Mty limits its exposure to credit risk by investing only in liquid Federal Government instruments registered in the National Securities Registry. Furthermore, the nature of the business allows Fibra Mty to maintain a very low aging of accounts receivable, which are primarily comprised of balances with less than 30 days outstanding. As a result, the probability of an impairment loss on accounts receivable is practically nil.
Liquidity risk. Fibra Mty manages liquidity risk by maintaining adequate cash reserves, monitoring projected and actual cash flows, and conciliating the maturity profiles of financial assets and liabilities.
Exchange rate risk. Fibra Mty is exposed to exchange rate fluctuations between the U.S. dollar and the Mexican peso, which are managed within the parameters established by the policies approved by the management and the Technical Committee. It is important to note that most of Fibra Mty’s leasing contracts are settled in U.S. dollars.
Interest rate risk. To hedge against interest rate volatility, if applicable, the management constantly evaluates several hedging instruments and investment strategies in order to minimize Fibra Mty’s exposure to interest rate risk.