(Recasts with official on bond buyback)
MEXICO CITY, Dec 4 (Reuters) - Mexico’s government hopes the repurchase of bonds used to fund a partly-built Mexico City airport which the new president has canceled can be largely wrapped up by Dec. 15, Deputy Finance Minister Arturo Herrera said on Tuesday.
Herrera was speaking a day after Mexico said it would buy back up to $1.8 billion of $6 billion in debt issued for the airport in an offer that runs until early January.
The new administration, which took office on Saturday, is due to present the 2019 budget by Dec. 15.
“There’s a probability ... a significant probability that just a day before we present the budget, we can for all practical purposes have concluded the matter of the bond and the dealings with the bondholders,” Herrera told local radio.
Questioned on whether Mexico could repurchase more of the airport debt, Herrera said that was not being planned.
Earlier, credit rating agency Fitch cautiously welcomed the proposal to buy back the bonds issued for the $13 billion Mexico City airport project, which new President Andres Manuel Lopez Obrador said on Oct. 29 he would cancel.
The veteran leftist argued that the futuristic project was tainted by corruption and would be expensive to maintain.
On the first weekday of his new administration, the Mexico City Airport Trust launched the offer for the bonds.
If successful, the plan “would alleviate some near-term risks as the tender would result in an immediate reduction in the outstanding debt by up to $1.8 billion,” said Fitch.
The cancellation of the airport project triggered a slump in Mexican assets due to concerns about how Lopez Obrador would manage Latin America’s second-largest economy.
“We’re making good on the promise to protect bondholders and investors in general,” said Lopez Obrador.
“You can’t regulate the market by decree, through politics. This will depend on investors, on financial market participants and we are in favor of the free market,” he said when asked about the risk it could become more expensive to buy back the debt than to continue with the airport project. (Reporting by Frank Jack Daniel, Sharay Angulo and Veronica Gomez; Editing by Dave Graham, Lisa Shumaker & Kim Coghill)