Infonavit plans to sell MXP2.72bn in 2030 UDI-denominated RMBS mid-December, and is heard targeting the week of December 15. The plan calls for a time-tranching structure used in previous issues, with the offer divided into a MXP1.49bn senior tranche amortizing ahead of a second MXP1.23bn senior piece. The notes will be backed by 20,850 of the Mexican lender’s own credits. Banamex and HSBC are managing the transaction, rated AAA on a national scale. The government-supported lender sidestepped weary investors last month by privately placing MXP3.65bn equivalent in UDI-denominated 2030 RMBS with a single buyer. It hopes to follow Su Casita’s placement of MXP1.65bn in 2035 RMBS.
Yearly Archives: 2008
Posted inDaily Brief
Mexican RMBS Springs to Life
Given long odds of putting out another issue this year, the Mexican RMBS market is showing faint signs of life. Su Casita – a securitizer that needs to issue to survive – has leaned on Sociedad Hipoteca Federal to place MXP1.65bn in 2035 RMBS. The Mexican state lender committed to buy at least 20% of the issue, an SHF official tells LatinFinance, declining to state the amount, which was subject to the final participation from other investors. The transaction was heard placed with a small number of buyers, and also aided by a guarantee from FMO of the Netherlands, the first such guarantee Su Casita had used in at least a year. Using the time-tranching structure becoming commonplace in the Mexican market, Su Casita priced a MXP827m slice at 5.86% and an equally sized tranche amortizing after the first at 6.56%. HSBC managed the sale, rated AAA on a national scale. Infonavit and BBVA Bancomer hope to follow later this month with transactions of up to MXP2.7bn and MXP6.4bn, respectively. The RMBS market is aided by the last week’s IDB announcement of a $500m 25-year loan to SHF, as part of a $2.5bn credit facility supporting the Mexican mortgage sector. The funds are in addition to $150m the IDB will make available directly to Mexican mortgage lenders, following a similar IFC facility.
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S&P Cuts Chile’s Iansa, Sees Sugar Risk
S&P has cut its corporate credit rating on Chilean sugar producer Empresas Iansa to BB minus from BB+ and removed the rating from credit watch, where it was placed with negative implications on November 20. “The downgrade reflects the deterioration in the company’s financial profile as a result of weakening conditions in its core sugar business and increased working capital requirements in its juice business. These factors led Iansa to increase its financial debt to $196m as of September 30, 2008, from $109m one year earlier, causing its liquidity position and credit metrics to weaken significantly,” says S&P. “We expect the fundamentals of the sugar business to remain vulnerable for the next two years, which will put significant pressure on Iansa’s financial profile,” adds the agency. For the 12 months to September, debt-to-total capital and debt-to-Ebitda jumped to 34.6% and 12.4x, respectively, versus 21.0% and 3.1x, as of December. “We expect some improvement in these metrics for 2009 and 2010, with total debt-to-total capital close to 30% and debt-to-Ebitda ranging from 4x to 5x,” adds S&P.
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Moody’s Raises Copel LC to I-Grade
Moody’s has upgraded Brazil’s Copel to a Baa3 local currency issuer rating from a Ba2 local currency corporate family rating. It also raised Copel’s BRL140m domestic market debentures due 2009 to Baa3 from Ba1 and confirmed the Aa1.br national scale rating. The action concludes a view for possible upgrade initiated on August 11. Moody’s notes steady and strong credit metrics along with the recent upgrade of the level of supportiveness of Brazil’s regulatory environment for regulated electric utilities.
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Peru Seen Leading Regional Growth: JPM
Despite its high exposure to falling commodity that has contributed to its first trade deficit since 2003, Peru’s economy is well grounded and its growth may lead the region in 2009, says JPMorgan. The shop sees GDP expansion ending the year at 5.3%, its highest country forecast within LatAm. With reserves of $34bn representing a quarter of total GDP and an expected fiscal surplus of $1.1bn, Peru’s finance ministry may succeed in sticking to its 6% GDP target for next year. A new trade agreement with China and expected FDI of $5bn should bolster that bid, says JPM. The shop recommends overweight positions in two Peruvian companies: Credicorp, the financial conglomerate that owns BCP, and Buenaventura, the mining company. With Credicorp, investors get exposure to domestic growth, while a recent drop in gold may produce a buying opportunity for companies like Buenaventura that are exposed to the precious metal as the holidays begin.
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Merrill Cuts Ecuador Exposure to Zero
Merrill Lynch has cut its Ecuador exposure to zero in its model external debt portfolio. The shop says it believes bond prices have further downside in an eventual default or restructuring scenario. It also cut Uruguay to underweight from market weight, as it sees the credit as expensive and says deteriorating fundamentals in Argentina will weigh. Jamaica was also downgraded to underweight from market weight as the country is expected to be severely affected by slowdown in the US economy. Merrill says keeps its market weight recommendations for Argentina and Mexico and its overweight recommendation on Peru, but cuts excess exposure versus recommended allocation in the three countries.
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Colombia, El Salvador, Suriname Get IDB Cash
The IDB has approved a $250m loan Colombia to improve water and sanitation services. The bank says this will be the first in up to 3 loans to be disbursed. Colombia intends to increase urban water service coverage from 94.5% to 97.8% in 2011, and in sanitation from 90.1% to 93.2%. Terms were not disclosed. The IDB will also lend $500m to El Salvador to improve the safety net for the poorest municipalities and households. The 2-tranche loan for $200m in 2008 and $300m in 2009 will have a 20-year term with a 5-year grace period at a variable interest rate. And Suriname has obtained a loan of up to $62.5m to repave the 140-km long Meerzog-Albina road, the IDB says. The loan will finance 49% of the total cost of the project. Part of the money will come from the bank’s ordinary capital, with maturity periods of 25-30 years and grace periods of 5-6 years. Another portion will come from the bank’s Fund for Special Operations. The facility will be denominated in US dollars and have a disbursement period of 5 years, the IDB says.
Posted inDaily Brief
Mexico Keeps Rates Unchanged
The Bank of Mexico left its benchmark interest rate unchanged Friday at 8.25%, saying that while the downside risks to growth are up, inflation concerns linger. “We expect the central bank to initiate a monetary easing cycle sometime during 1Q2009 which will push the policy rate down to 7.0% by end 2009,” says Goldman Sachs, commenting on the decision. “The timing of the first rate cut will depend on how fast in the eyes of the MPC the balance of risks shifts from high inflation into low activity,” it adds.
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Marfrig Outlook Negative, Says Moody’s
Moody’s has assigned a negative outlook to Marfrig, citing the risks associated with the company’s acquisitive growth strategy and the challenges of integrating the new acquisitions into the company while improving their margins without disrupting its other businesses, says Moody’s. The negative outlook also reflects Marfrig’s limited track record for generating positive funds from operations and its intensive working capital needs, which continue to drive negative cash flow from operations. Confirmed with negative outlook are the company’s corporate family rating of B1 and that of its $375m 9.625% senior unsecured notes due 2016, also rated B1.
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Comerci Sells Stake in Prestacomer
Mexican retailer La Comerci has sold its 50% stake in local credit card company Prestacomer to BNP Paribas Personal Finance, with which it already has a partnership, for MXP120m. The sale comes shortly after Comerci announced it would sell assets to pay off debt. The company defaulted after recording losses on forex derivatives. Credit Suisse has been advising the retailer.