Mexican mortgage lender Infonavit plans to sell MXP3.53bn in 2030 RMBS as soon as Wednesday, August 27. The issue denominated in the UDI inflation-linked unit will be divided into a MXP1.67bn first tranche and a MXP1.86bn second tranche that amortizes after the first but is not subordinate. The bonds are backed by a pool of 24,000 mortgages. The sale, rated AAA on a national scale, is the third from a MXP15bn shelf. Banamex and Deutsche Bank are managing the transaction, with HSBC as co-manager. Infonavit placed a MXP3.5bn 2023 RMBS issue in June, in two tranches pricing at udibonos plus 105bp and 135bp, respectively. HSBC is set to place its own MXP1.93bn MXP-denominated RMBS issue on Friday, while Metrofinanciera is preparing a MXP2.3bn deal for September.
Category: Topics
Brazil Homebuilder M&A Gains Momentum
The much anticipated wave of mergers in the Brazilian homebuilding space is in full swing as stocks of smaller and medium-sized companies continue to get hammered, creating bargain opportunities for cash-rich buyers. One potential deal in the making is the acquisition of Company, a high-end apartment developer in Sao Paulo, by Brascan Residential Properties, a Bovespa-listed entity 60% owned by Brookfield Asset Management, say people away from the talks. Nick Reade, chairman of Brascan Residential, declines to comment on potential targets, limiting his remarks to “We believe in the consolidation process and are looking at several options right now.” Company’s stock has careened some 56% since hitting a high of BRL22.81 in mid-November. Its market cap stands at BRL716m. In April, Brascan Residential acquired MB Engenharia for an open-ended price tag that could range from BRL160m-BRL500m or more, depending on future earnings. In June, Cyrela paid BRL1.54bn for fellow developer Agra, while earlier this month Brasil Brokers took a 51% stake in Abyara’s brokerage business for BRL250m. Among the more vulnerable Brazilian developers are Inpar, down 82% from its IPO, EZ Tec, down 70%, CR2, down 59% and Helbor, down 46% from its IPO price. Brascan Residential’s stock is down 60% from its IPO, but the company counts on sponsorship from its wealthy parent, which has some $40bn in global real estate holdings.
Tourism Developer Pulls IPO
Summer Brasil Turismo has canceled plans to go public on the Bovespa. The transaction had been on ice since the spring, when it was postponed due to poor market conditions. Following the expiration of its postponement period , the company formally removed its filing from the CVM. “We are considering various alternatives,” Andre Menezes, head of IR, tells LatinFinance, adding Summer Brasil would consider a private share sale, or an attempt to return to the public markets at a later date. Menezes declined to state the amount of proceeds Summer is seeking to finance its tourism-related developments in Brazil’s northeastern region. UBS was to lead the equity sale, originally announced in January.
GMAC Mexicana to Sell Auto Loan ABS
GMAC Mexicana is preparing to sell floating-rate MXP-denominated bonds backed by a pool of auto loans. The size and tenor have not yet been defined, but the offering will consist of at least one subordinated tranche. Although GMAC’s Financiera and Hipotecaria units have issued MBS in Mexico, this offering would be the first securitization by GMAC Mexicana, the auto loan unit. Scotia is managing the transaction, expected in the next one to two months, according to executives close to the process.
Venezuela Unlikely to Knock Cemex
The seizure of the Venezuelan assets of Cemex by the Chavez government will not have a huge impact on the Mexican firm’s overall financial performance, according to analysts. “The Venezuela business is very small in the big scheme of things,” says Revisson Bonfim, an analyst at Fitch. “We believe that in the end of the day Cemex will end up selling the entire company to the government. The big question is whether or not they will receive market value for those assets,” he adds. Production from Venezuela represented only 3.7% of the consolidated Ebitda of Cemex, Rodrigo Herrera Matarazzo, an analyst with Ixe Casa de Bolsa in Mexico City says. “Even though this process of negotiation could be extended, we don’t see a mayor effect on consolidated results,” he says. Previous businesses nationalized in Venezuela went for a reasonable price, notes Bonfim. However, Matarazzo is cautious on the outcome of negotiations. “Once the agreement has been reached, then we can qualify whether it is good or bad [for Cemex],” he adds. Yesterday, S&P affirmed its BBB (negative) long-term corporate credit rating on Cemex and subsidiaries based on expectations that the company will reach financial targets in the next two quarters.
Moody’s Moves Peru Closer to I-Grade
Catching up with the other agencies, Moody’s has raised the foreign-currency bond rating of Peru to Ba1 from Ba2, one level beneath investment grade. The shop has been the most conservative of the three major ratings agencies during Peru’s recent period of unprecedented growth and macroeconomic stability. Fitch gave Peru a BBB minus grade in April, and S&P followed in July. “The upgrade was prompted by steady improvement in Peru’s sovereign credit profile driven by a continued and accelerated strengthening in the balance sheet of the government and the local banks,” says Moody’s. Peru’s government has also reduced the proportion of foreign currency debt, and banking system, has greatly reduced the share of dollar-denominated loans and deposits. The agency expresses concern, however, that socio-economic challenges pose potential political risks to the country’s medium-term outlook. “All three agencies have recognized that Peru has significantly improved its credit profile and that the improvements made are likely to be sustained,” says Goldman Sachs, commenting on the Moody’s move that it sees as “warranted and well deserved.”
Fitch Sees More Pressure on Metrofinanciera
Fitch has downgraded Mexican mortgage company Metrofinanciera’s individual rating to D/E from D (stable), given continued pressure on capital adequacy, asset quality, liquidity and refinancing needs. The downgrade of the individual rating reflects continued weakening of asset quality, liquidity, capital adequacy, profitability and business risk. Asset quality in both the mortgage and construction loan portfolios has deteriorated at a relatively fast pace and the worsening credit environment puts on additional pressure. Fitch also affirmed the foreign currency long-term IDR at B+ (stable. Last week, Metrofinanciera filed to issue MXP1.6bn equivalent in 2033 notes denominated in the UDI inflation-linked unit and MXP769m in MXP-denominated 2038 notes. The company is also planning to issue MBS worth approximately MXP2.3bn, despite choppy markets, competing large issues and financial troubles.
Argentina’s YPF Hopes for H2 IPO
Despite wretched market conditions for LatAm issuers, especially Argentine ones, YPF, the country’s biggest oil and gas company, is hoping to bring its up to $4bn IPO sometime in the last four months of 2008, say people familiar with the process. If successful, the transaction would set a new benchmark for Argentina, testing investor appetite for what is seen as a strong asset in a volatile, unpopular jurisdiction. The company, which last year was valued at some $15bn when its parent Repsol sold it to the Eskenazi group – a private consortium with ties to the government – plans to IPO 20%-24% of its equity. The company has improved operations, say officials close to the issuer, and the $15bn value is likely to serve more as a baseline value than an average one, they say. As such, the IPO could be in the $3bn-$4bn size range, according to a person familiar with the deal. No official results have been reported, so any estimates on the size of the IPO or the company are preliminary and unofficial. YPF is also heard to not be desperate to price the deal in 2008, meaning if market conditions remain unfavorable, it could carry the offering over into 2009. Credit Suisse and UBS are heading the deal, with Goldman and Itau BBA also carrying senior roles.
HSBC Preps MXP2bn Mexican RMBS
HSBC plans to sell MXP1.93bn in a 2028 RMBS as soon as Friday, according to regulatory documents. The offering rated AAA on a national scale features a MXP969m tranche and MXP964m piece that amortizes after the first, but is not subordinated. The fixed rated will be determined though a bookbuilding process ending Friday. The bonds are backed by a pool of 2,589 of HSBC mortgage loans, reduced slightly from an original 2,785. HSBC is managing the transaction. The issue is the third from a MXP10bn shelf, last used in the sale of MXP3.5bn in 2025s in October 2007. RMBS issuance has been less frequent than expected in Mexico this year, but the market was encouraged by the record-setting issue of MXP4.83bn in 2033 bonds by BBVA earlier this month. Infonavit is planning a MXP3.5bn RMBS sale and Metrofinanciera teeing up a MXP2.3bn offer.
Standard Chartered Promotes in Private Bank
The Standard Chartered Private Bank has appointed Diego Folino regional head of its Americas unit based in Miami. Folino is currently President and CEO of Standard Chartered Bank International, formerly American Express Bank International. He will be responsible for the private bank offices in New York, Miami and LatAm, as well as governance oversight of the Miami office and of the private bank network marketing offices in California and Canada. He reports to Peter Flavel, global head of Standard Chartered Private Bank, as well David Stileman, CEO of Standard Chartered Americas. Folino was previously CEO of Standard Chartered Mexico, where he was largely responsible for broadening corporate and institutional client relationships and building the wholesale franchise. Gil Schmidt, regional head of Standard Chartered Private Bank Americas was meanwhile appointed global head of strategy implementation and new ventures.