Category: Mexico

The State of Mexico is readying MXP3.6bn in five infrastructure projects, with the first set to begin bidding in July. The MXP1.3bn Vial Urbano road in Toluca will be launched this summer, along with a hospital and cultural center, followed later by two other road projects. The projects are being staggered – with the last road deal expected by September – to avoid clogging the market for financing, explains state finance secretary Luis Videgaray. Banobras expects to support the deal, following its success with a debut guarantee for State of Mexico’s MXP27bn refinance, its president Alonso Gracia Tames tells LatinFinance. After providing a first loss guarantee for the state in May, Banobras is looking to aid badly needed state-level infrastructure projects, he adds. “The role we can play is to provide instruments to facilitate channeling resources to states and municipalities,” he says. Garcia sees Banobras primarily providing performance guarantees for future PPPs at the pre-operational stage and also guarantees protecting sources of revenue once a project is operating. “There is a need for investment in smaller projects that when summed are of great value and that support the basic needs of the population,” the official says.

The third large toll road concession in Mexico’s Fonadin infrastructure investment fund – commonly known as FARAC III – could be announced in the next few months. The government, now preparing to accept bids on the second package, had given later estimates, of around the end of the year. “I think it could be ready very soon,” says Alonso Garcia Tames, president of Banobras, which is now preparing to structure the second package. “Hopefully in the next couple of months we’ll be announcing something. The package will include roads in the Northeastern part of the country. Tames adds that Banobras is eyeng financing for a MXP3bn expansion of a road connecting Guadalajara and Colima, for which it is the concessionaire, expected to be designated in the fourth quarter.

A chunky MXP4.39bn securitization from TMM Maritima, the offshore rig servicing contractor, has been pushed back by a week and is now set to price between July 1 and July 9, says a banker on the deal. The delay is due to pending paperwork at the exchange, he adds. The bonds have a 20-year final, 14-year average life, with duration of roughly 9 years. A range of 195bp-215bp over 28-day TIIE has been set, but bankers say market conditions will almost surely lead to a pricing above 200bp. The notes are backed by Pemex contracts. Value Casa de Bolsa is leading.

Mexican microfinance lender Financiera Independencia landed MXP784m in 3-year local bonds, marking its first issuance of long term debt. The Sofol, which went public on the Bolsa in November, raised less than the maximum MXP1bn it had detailed in a filing. A banker on the deal says the proceeds fell within the expected range of MXP500m-MXP1bn, established in the past week when market conditions worsened. The A/A+ bonds came at 28-day TIIE plus 190bp, roughly at the midpoint of the 180bp-200bp range, says the banker. HSBC and BBVA led.

VW Leasing, the Mexican leasing arm of Volkswagen, is set to launch a MXP2bn 3-year note today via Santander and Inbursa. The deal will have a floating rate coupon. “This is the type of the deal the Mexican market needs more of,” says one local DCM executive. Having a foreign-backed issuer adds credibility to the transaction, he says. Bankers say this type of company could represent a growing portion issuance in Mexico.

Mexican infrastructure operator Pinfra has won a 30-year concession to build, operate and maintain the MXP2.7bn Atlacomulco-Palmillas north of Mexico City. The 54-kilometer, four-lane highway will communicate with existing highways to connect Mexico City with the major industrial hubs of Toluca and Queretaro, Pinfra says. “This project will be of great importance for the center of the country,” the company adds.

Entertainment company CIE is plans to sell MXP500m in 2010 floating rate bonds. The gaming operator is looking to refinance existing short-term debt, according to an investor relations officer. The transaction is rated A+/A3 on a national scale and expected as soon as Friday. It is the second offering from a MXP3bn shelf.

Mexican telecom giant Telmex Internacional, the entity recently spun off from Telmex, hopes to approve a plan to buy back up to MXP10bn in shares. The company called for a shareholder meeting on July 9 to discuss the deal. Separately, the Mexican company is heard eyeing Telecom Argentina, Brazil’s Global Village Telecom and Chile’s Grupo GTD as possible acquisition targets, according to bankers familiar with the company. Telmex Internacional is understood to be the largest spin-off ever done in LatAm, valued at $16bn.

Mexican retailer Grupo M has raised $100m in a 2-part loan facility for its Central American operations. Dutch development bank FMO provided a $35m 7-year loan, while Citi underwrote and syndicated a $65m 5-year piece at Libor plus 400bp. Six commercial banks participated in the syndication. “This syndicated loan with Grupo M is a landmark and unique transaction in Central America due to the amount committed and the legal structure in which seven jurisdictions were involved,” says Jorge Mora, a vp at Citi involved in the deal.

US treasury secretary Henry Paulson will today attend a meeting in Mexico hosted by finance minister Agustin Carstens. Paulson joins finance officials from LatAm, the Caribbean and Canada as well as heads of the IMF, World Bank and IDB to address a range of economic issues and areas of regional cooperation. The meetings will cover the global and regional economic outlook, the role of international financial institutions in the region and areas of strategic cooperation.