Category: Bonds

Grupo Mexico’s Mexico Generadora de Energia (MGE) emerged Thursday to raise $575m to help fund a power project. The 2032 notes priced at par with a 5.50% coupon, to yield UST+388bp, and end up tight to mid
to high 5% initial price thoughts. The bonds were trading up half a point in the grey, according to traders. Final demand topped $1.8bn, with approximately 150 mostly EM dedicated, high grade and structured investor accounts participating. At least 50% of demand came from the US, 30% from Europe and the rest from Latin America. The Baa2/BBB bond features a 13-year average life. The 500 megawatt gas-fired electrical power facility has a 20-year power purchase agreement to supply Grupo Mexico’s Mexicana de Cobre and Buenavista del Cobre mines. The project is being developed in two phases, which are 88% and 51% complete, respectively. The bonds come with collateral of first priority security on all assets, collection rights under contracts, and equity
interests of the issuer. Bank of America Merrill Lynch, HSBC and Morgan Stanley led as joint bookrunners, with Morgan Stanley as sole structuring agent.

Mexico’s Grupo Kuo has sold $325m in new 2022 NC5 bonds, raising more than the $250m it needed to cover a liability management exercise. The BB rated conglomerate priced at par with a 6.25% coupon to yield in line with 6.25%-area guidance that followed earlier mid-to-high 6% price talk. Kuo is engaged in a buyback offer for its $250m outstanding 9.75% 2017 bonds. It is offering holders $1,053.75 cash per $1,000 principal through today’s early deadline, and $1,023.75 per $1,000 through the December 14 final deadline. Credit Suisse is managing the tender, and was joined by Citi and Bank of America Merrill Lynch on the new deal.

The government of Mexico’s Distrito Federal has issued MXP2.5bn ($193m) in the domestic bond market. The 2027 bonds priced at 6.85%, or Mbonos+85bp, in line with expectations. The deal was done slightly differently to most, according to a source familiar with the sale, with books closing once the MXP2.5bn amount was reached, though the short time to do so implied heavy demand. Guaranteed by the federal government, the bond is rated AAA on a national scale. Banorte-Ixe and Santander managed the transaction. In December of last year, DF sold MXP1.77bn in 5-year bonds at TIIE+30bp.

Inbursa, Scotia and Interacciones have each raised domestic bonds in what continues to be a busy week for Mexico’s local market, led by Inbursa’s MXP8.05bn ($621m) offer. The Carlos Slim bank issued MXP6.43bn in 2014 bonds at TIIE+20bp, and MXP1.62bn in 2016 bonds at TIIE+30bp. Total demand topped 1.2x, with both tranches pricing in line with expectations. Inbursa, Banamex, Bancomer, HSBC and Banorte-Ixe managed the transaction, rated AAA on a national scale. Inbursa last issued in October, selling MXP5bn in 2015 floating-rate bonds paying TIIE+25bp. It has issued MXP16bn this year and has sold MXP50bn in outstanding debt in the domestic market to date. Meanwhile, Scotia’s Mexican operation raised MXP2bn through the sale of 2015 bonds, pricing at TIIE+25bp. Scotia led the deal rated AAA on a national scale itself. Finally, Interacciones sold MXP700m ($54m) in 2022 subordinated bonds, pricing at TIIE+250bp, in a self-led deal managed rated Baa1/A on a national scale.

The Monterrey-Saltillo toll road is scheduled to sell up to MXP4.5bn ($345m) in Mexico’s domestic bond market as soon as next week. The concession owned by Spain’s Isolux-Cosan is looking to price the 25-year UDI-denominated notes at UDIbonos+390bp, according to a source familiar with the sale. Proceeds will be used to repay bank loans and subordinated debt with the government Fonadin fund. The toll road has been operational for almost a year. Santander, ING and Bank of America Merrill Lynch are bookrunners on the transaction, rated AA/AA+ on a national scale.