Category: Mexico

Ford Credit de Mexico has appointed Irma Garcia Martinez as its new finance director. She replaces Ruy Antonio Meirelles Dos Santos Filho – who will stay with the firm – and the appointment is effective immediately.

Goldman Sachs Infrastructure Partners – part of an equity consortium operating the first of Mexico’s Farac toll road concessions – is looking to takeout a $3.5bn MXP-denominated loan related to the project, say bankers close to the process. Proposals for a full or partial are heard due by the end of July, and likely to cover a range of financing solutions. A securitization of toll road revenues is among the most likely structures, for which the target buyer base would be Mexico’s Afores and other local investors, say DCM executives involved. “This deal is so big that any refinancing will have to rely on investors outside Mexico as well,” adds a local debt markets banker. The Farac facility is the largest local currency loan to date in LatAm and has been syndicated to a group of banks, some of which continue to seek buyers for their holdings in the secondary market. The 7-year mini-perm carries a cash sweep; meaning any and all revenues from the concession go toward interest payment. That reduces the amount of dividends equity investors Goldman and ICA, the Mexican infrastructure shop, can reap from their investment, according to a bank market executive. Goldman was not available for comment.

For Goldman Sachs and ICA, the possibility of issuing toll road revenue-backed paper in the local Mexican market on a large scale was confirmed by a June notes offering from Carlos Slim’s IDEAL, according to bankers familiar with both transactions. Mexican institutions gobbled up MXP7bn in asset-backed bonds issued across fixed, floating and UDI-denominated tranches, marking the largest MXP offer priced year-to-date. IDEAL scaled back its issuance from MXP11bn due to investors’ distaste for fixed-rate paper, but it did well on an all-in cost basis, say bankers. The issuer secured a MXP1.5bn 2015 floating rate tranche at TIIE plus 28bp, a MXP1.3bn 2036 fixed-rate piece at 10.50%, and a MXP4.3bn-equivalent UDI-denominated 2036 tranche at 5.69%. Plans for a takeout of the $3.5bn 7-year peso-denominated Farac loan are long overdue, according to several banks participating in the syndication. Lack of guidance from ICA and Goldman on timing of a takeout proved to be a source of frustration for some lenders. Santander, HSBC, Dexia and NordLB led the Farac loan.

Mexican infrastructure operator Pinfra is preparing to refinance debt tied to the Mexico-Toluca toll road concession, also known as Mextol. It plans to sell around MXP6.5bn-equivalent in 2030 bonds denominated in the UDI inflation-linked unit August 15. On the same day it will exercise a call option on the existing debt, MXP5.57bn-equivalent in 2030 UDI-denominated bonds issued in 2006. Holders will receive a call premium of 3.17%. The key to savings from the transaction, according to a banker managing the operation, is that existing debt includes both 5.00% senior debt and 8.85% mezzanine debt, which will be replaced with a single senior piece. The issuer is able to replace the debt at such as saving due to the fact that traffic has improved more than expected since 2006. Funds remaining after the repurchase can be used for additional construction. The bonds have yet to be rated, but the senior debt they replace was rated AAA on the national scale. ING is managing the transaction.

Spanish utility Iberdola had to significantly reduce the size of its innovative Mexican peso-denominated bonds to MXP1.5bn, owing to limited interest in a deal the leads claim is the first locally-registered MXP placement by a foreign corporate. The 2018 notes pay a fixed 10.23% coupon, 94bp wide to comparable Mbonos and just inside initial guidance of 95bp. The issuer had been targeting both fixed and floating-rate tranches totaling about MXP3.5bn, but it was heard forced to scale back due to choppy market conditions. Iberdrola plans to swap the interest rate as part of the transaction, and was heard to have found a floating-rate Euribor swap unattractive in the current market. Demand reached 1.6x the reduced size, according to a banker managing the sale, which was rated AAA on the national scale. Iberdrola, which has a considerable asset base in Mexico, plans to use proceeds for general corporate purposes. Banamex and Bancomer managed the transaction, which was delayed by a week. Iberdrola registered to sell up to MXP5bn in Mexican bonds and did a roadshow in June.

Food producer Sigma Alimentos is preparing to sell at least MXP1bn in 2018 fixed-rate bonds as soon as Thursday. The AA+ rated issuer has not set the exact amount of debt, to be denominated in pesos or the UDI inflation-linked unit. The proceeds will repay MXP1bn in 8.8% bonds issued in 2003, Sigma says in a filing, and bank debt. Banamex is managing the transaction.

Spain’s Grupo Lar will invest MXP1.3bn in a new housing complex located near Mexico City’s Paseo de la Reforma, the company says. The new development will include four apartment towers with a business center and other amenities. Construction is expected to start in Q4 of this year. Recently, Grupo Lar announced a MXP1.1bn, 469-unit complex in the city of Puebla.

Fitch has affirmed Mexico’s rating (IDR) at BBB+ with a stable outlook. The agency cited Mexico’s strong macroeconomic policy framework, well-entrenched macroeconomic stability, and healthy external finances as primary supports of the country’s investment grade ratings. Passage of structural reforms and further improvement in business climate indicators would be viewed positively, adds the agency. “Further improvement in fiscal and external solvency ratios as well as a reduction in the vulnerability of public finances to oil income could also boost sovereign creditworthiness,” says Fitch. A significant and persistent decline in oil production that compromises public finances, especially in a less favorable oil price environment, and results in higher public debt burden would be negative for the rating, says the agency.

The international finance arm of Spanish utility Iberdrola has postponed bond deal originally expected to price yesterday. The company now hopes to raise MXP5bn in peso-denominated bonds next week, say a banker on the deal. The foreign issuer is still sorting through regulatory issues, adds the banker. Iberdrola has filed to issue up to MXP3bn in 2013 floating-rate bonds and up to 2bn in 2018 fixed-rate bonds, rated AAA on a national scale. Banamex and BBVA are managing the sale. Although going has been rough in the dollar DCM markets, the Mexican market has in the past week seen homebuilder Sare price MXP462m in 2013s, component maker Xignux place MXP1.5bn in 2015s, and Grupo Posadas reopen MXP750m of its 2013 notes.

French conglomerate Alstom and its Mexican partners ICA and CICSA have signed a contract with the transport authority of Mexico City for supplying and installing all the electromechanical equipment on the new line 12 of the city’s metro for EUR330m. The company will supply the electrification, substations, operations control center and signaling, telecommunications and ticketing systems, system performance and testing, according to a statement. A launch is slated for mid-July 2008 and the project is expected to be finished by late 2011, according to Alstom. ICA and CICSA will be in charge of the engineering. The total cost of the project is an estimated EUR1.1bn.