BBVA Bancomer on Thursday issued MXP5bn in 3-year bonds, in the first bond issue by a bank in the local Mexican market this year. The bonds priced at 20bp over TIIE, the tight end of 20bp-25bp guidance, according to a lead banker. Some investors had hoped the bonds would price as high as 35bp over TIIE. The book received MXP6.3bn of demand, from over 30 investors, adds the banker on the AAA rated self-led deal. Private banks, trading desks, pension funds and mutual funds participated in the deal. The proceeds will be used to increase the lending portfolio. The bank was considering 3-year or 5-year bonds. “We chose the 3-year tenor as it is the market sweet spot, attracting a range of types of investors,” adds the lead banker. Santander will today also look to issue up to MXP5bn in 3-year bonds, in a deal that is self-led, joint with Banamex. Investors expect the bonds to price in the 25bp over TIIE area.
Category: Economy & Policy
LatAm Leads Global Confidence Poll
For the first year ever, LatAm leads the world for business optimism, according to Grant Thornton’s 2011 International Business Report (IBR). “Confidence levels over economic performance are higher in Latin America than any other part of the world,” says the report. Across the region, some 75% of privately held business owners are optimistic about their region’s economic performance in 2011. This compares to +50% in Asia Pacific (ex-Japan) and +26% in North America. Europe is the least optimistic region at +22%. Within LatAm, Chile (+95%) scores the highest optimism of any country surveyed followed by Brazil (+79%), Argentina (+70%) and Mexico (+64%). “If the economic story of the last decade was about the BRICs, these results suggest the next decade will be about Latin America,” says Ed Nusbaum, CEO of Grant Thornton International. The IBR notes that confidence in China has dropped to +42%, from +60% last year. It adds that businesses around the world expect weak investment in 2011. The IBR is done by market research agency Experian Business Strategies, commissioned by Grant Thornton, the accounting and consulting firm.
COMMENT: Year of the Panda
China Investment Corporation’s involvement in a consortium buying part of Brazil-based BTG Pactual marks a shift into financial assets for China.
BEST BOND HOUSE
The rapidly rising tide of LatAm fixed income lifted all underwriters in 2010, creating at least four serious contenders for Best Bond House.
Brazil M&A: Valuations Up, Fees Fall
Brazil is on a path for record-breaking M&A volume and sky high valuations this year, but advisory fees are lagging.
DEALS OF THE YEAR RESULTS
Biggest, tightest, longest, cheapest. Superlatives abound when describing LatAm capital markets and advisory for the last 12 months, and many bankers expect the good times to continue rolling.
COVER STORY: Local Currency Fixed Income Goes Global
Demand for local currency fixed income is back, tracking
appreciating LatAm currencies and flaring rates differentials. Structural shifts support the trend, but can it last?
Grupo Mexico: Running on Cashflow
Aggressive in expansion, conservative with financing, Grupo México aims to double copper output in the next five years. Its CFO does not expect fresh fundraising.
Uruguay to Reform Local Markets
Uruguay hopes to invigorate local capital markets with new legislation. The country’s vice president says public companies may soon list minority stakes locally.
LatAm Syndicated Loans Outlook
Rekindling Loans
International banks are eager to re-enter the LatAm bank market. But cost of funds, spread compression and better DCM terms will keep a lid on volume.