Category: Economy & Policy

Mexico’s Banorte priced Wednesday MXP1.975bn ($181m) worth of 2017 certificados at TIIE minus 5bp to yield 7.65%. The notes, rated Baa1 on a local scale by Moody’s, are backed by four bonds: 6.375% guaranteed Pemex PFMT notes (Baa1) due 2016; 3.875% Euro Bancomext MTNs (A1) due 2009; 9.625% Monterrey Power senior secured bonds (Baa1) due 2009; and 5.625% United Mexican States global notes (Baa1) due 2017. Proceeds are for general corporate purposes.

Honduras-based multilateral Cabei has extended its peso notes curve with a tightly priced MXP1.5bn 7-year registered in Mexico. Demand was MXP2.6bn and it priced 10bp through 91-day TIIE, in line with expectations. Mutual funds, insurance companies and small brokers were the buyers. The 5-year, issued earlier this year, was marked around 20bp through in marginal trade, according to a banker on the deal. “We have established a name in the market as a regular borrower,” Nick Rischbieth, Cabei vice president, tells LatinFinance. “There’s still demand that was unsatisfied that we could probably return to.” The deal through Citi is from Cabei’s global debt program and rated Triple A locally. Cabei has issued twice this year in a similar format and plans to swap proceeds to dollars. Banamex is the lead. The underwriter is apparently looking to bring other issuers to this market in the same format. Cabei’s next issue is expected to be in an Asian currency.

Honduras-based multilateral Cabei is planning to issue Wednesday a MXP1.5bn 7-year Mexico-registered issue. The 144a deal through Citi is rated Triple A locally. It will price over 91-day TIIE. Cabei has issued twice this year in a similar format and plans to swap proceeds to dollars. Banamex is the lead. The deal is from Cabei’s $750m medium-term notes program.

Mexico’s Hipotecaria Crédito y Casa, a mortgage writer, has a MXP1.4bn offering of certificados bursatiles. The MXP1.2bn AAA-rated 7.2-year tranche came at 100bp over the 28-day TIIE. The note has an average life of 6.6 years, and was priced the wide end of the 90bp-100bp talk. The subordinated A+ rated 7.7-year tranche B, worth MXP177m, was priced at 200bp over the TIIE, also at the wide end of guidance. Proceeds will be used to originate construction bridge loans. Barclays and Santander led.

The IBRD, or World Bank, sold a 500 million Mexican peso bond last week. The AAA-rated notes due in March 2009 carry a 7.250% coupon and were priced at 99.240 to yield 7.674%. The issuance was largely driven by reverse inquiry and the bulk of the notes were placed with a German insurance company, according to bankers close to the deal. TD Securities was sole lead.

Pimsa, the Mexican paper products producer, is out with a three-tranche $355 million-equivalent syndication through Citigroup. It includes a $100 million equivalent in pesos five-year tranche at 225bp over TIIE, a $220 million seven-year at 325bp over Libor and a $35 million equivalent in pesos five-year revolver at 225bp over TIIE. ABN Amro, BBVA and GE are heard signing on as arrangers. Hedge funds are expected to take an interest for the spread, which is high versus what else is available in the Latin bank market. Commitment and arranger fees are a significant incentive. But bankers are taking a close look at the credit, particularly after it failed to launch a bond deal for a similar amount in October, when market conditions were generally strong. The tenor is a bit of a stretch, but cash-rich bankers have long been seeking structures with yield. Kimberly-Clark de Mexico sold a 60% stake in Pimsa to US hedge fund Eton Park and Idesa in October.

Share prices in Lima fell 1.9% after Ollanta Humala, the leading candidate in opinion polls ahead of April’s presidential election, said he would impose higher oil royalties and limits on foreign investment. Humala is a former military rebel and member of the Peruvian Nationalist Movement. “This extra [money] should benefit our children with health and education programs and not oil company owners,” he said.

Andres Manuel López Obrador, standing for the Partido de la Revolución Democrática (PRD), is still ahead of nearest rival Felipe Calderón of the ruling Partido Acción Nacional (PAN) party in the most recent newspaper poll for Mexico’s upcoming presidential elections. López Obrador leads Calderón by 34% to 22%. A poll carried out last week by a rival newspaper showed the candidates neck and neck at 29% and 28% respectively.

Arturo Montiel Rojas dropped out of the race for the opposition PRI party’s nomination to run for president in 2006. He left the field open to party boss Roberto Madrazo to run on the PRI ticket in next year’s three-way presidential race. Montiel apparently quit after a broadcast investigating his son’s finances was aired by Televisa, Mexico’s dominant TV channel.