Category: Mexico

Spanish developer Acciona has won the bid to build the expansion of the Campeche XXI convention center in San Juan de Campeche, southeastern Mexico. Acciona says it will invest MXP220m in the expansion of the building. The project features electrical and sanitation facilities for the complex, as well as rooms for data and voice recording.

Moody’s has chopped the issuer ratings of the Mexican municipality of Tonala to Baa1 on the local scale and B1 on the global scale. The rating change was prompted by a continued deterioration in financial performance over the last few years, the agency says. This has translated into large borrowing requirements and tighter liquidity levels. “The new ratings also take into account the absence of major contingent liabilities, as well as the municipality’s narrow economic base and large infrastructure needs,” Moody’s adds. The outlook incorporates a low likelihood that the involvement of some municipal officials in a corruption case will directly affect the municipality’s credit.

Fitch has put Mexico’s B minus rated Sanluis on rating watch negative owing to a weak liquidity position. The firm had $23.2m of cash and marketable securities on its balance sheet at the end of March 31 and is also susceptible to deterioration in the US auto industry, particularly light truck vehicles. “Cash-on-hand plus cash flow generation may be insufficient to continue amortizing debt in the near-term,” says Fitch. Amortizing debt for the next three fiscal year consist of $35m in 2008 (full year), $36m in 2009, and $93m in 2010. “Difficult credit market conditions, beyond management’s control, have delayed the company’s ability to complete a bond offering announced in October of 2007, which has been put on hold awaiting credit market improvement. However, financial performance deterioration in 2008 may complicate the company’s ability to refinance its debt,” says Fitch. It expects to resolve the review in the next 3-6 months. Sanluis is the world’s largest producer of leaf springs, supplying GM, Ford and Chrysler. It operates in the US, Mexico, and Brazil.

Iberdrola Finanzas, a unit of Spanish Utility Iberdrola, plans to launch this week a roadshow supporting the issue of up to MXP3.5bn in bonds. Iberdrola, which has a strong track record for developing power generation facilities in Mexico, is aiming for up to MXP1.5bn in 2018 fixed-rate bonds denominated in pesos or the UDI inflation-linked unit, and up to MXP2bn in floaters at a shorter tenor. Banamex and BBVA are managing the sale, expected to occur by the end of the month.

Credit Suisse is changing its view of Mexico rates, calling for a tightening because of inflation. “We are changing our call on monetary policy for Mexico for next week’s meeting. We now estimate that the central bank will tighten monetary policy by 25bp next Friday (20 June) to 7.75%,” says the shop. CS does not foresee the start of a tightening cycle but says future policy changes will continue to be data dependent.

Mexican construction company ICA has won the bid for the construction of a new line of the Mexico City metro, according to the city’s government. Mexico City will invest MXP17.5bn in the new line that will be the largest in Mexico, it says. Mexican builders Alstom Mexicana and CICSA will also participate in the project, the government adds. Construction is expected to start July 3 and conclude in December 2011, the city adds.

Michigan-based food and animal safety company Neogen has opened a new subsidiary in Mexico. The new entity, named Neogen Latino America will be headquartered in Mexico City and distribute the company’s food and animal safety products throughout Mexico, Neogen says. The new company will also work with the US and Mexico on programs to ensure the safety of food products that move across the border from either country, Neogen adds. Jose Noriega, the former president of Biotecnologia Industrial, will manage the new company and own a minority interest.

Mexican retailer Soriana is expected to price up to MXP5.5bn in 2012 floating-rate bonds today. If the maximum is reached, it would represent the largest non-structured Mexican issue of the year to date among non-financial institutions. The issuer has not given any indication of the target spread over the 28-day TIIE. “This will be a good experiment,” says a DCM banker away from the deal. “With the volatility this year, we haven’t seen many big deals.” Inbursa, JPMorgan and Banamex are managing the transaction. The AA/Aa2 issue is the first from a MXP15bn shelf to help finance the December acquisition of rival Grupo Gigante for $1.35bn plus inventories and rent. Soriana is expected to place the remainder of the shelf this year, according to Moody’s, to take out about MXP18bn in a bridge.

Ideal, the infrastructure builder and operator owned by Mexican billionaire Carlos Slim, has priced a MXP7bn 3-tranche securitization of highway concession revenues. The issuer had filed for up to MXP11bn, but scaled back after demand for transaction – still the largest of the year thus far in the local markets according to Dealogic – reached only a little bit over what was placed, according to a banker on it. A MXP1.5bn 2015 floating-rate tranche priced at TIIE plus 28bp, a MXP1.3bn 2036 fixed-rate tranche came at 10.50%, and a MXP4.3bn-equivlant UDI-denominated 2036 tranche priced at 5.69%. The bonds are backed by future flows from the Champa-La Venta, Libramiento de la Ciudad de Toluca, Tijuana-Mexicali and Tepic-Villa Union toll roads. It is the first master trust in the Mexican market structured so additional roads can be added at a later date, according to a banker managing the transaction. Credit Suisse and Inbursa ran the AAA rated deal.

Mexican petrochemical company Mexichem is planning a three for one share split and a capital raise via a primary share offer, it says in a filing with the Mexican stock exchange. The issuance and split, which have to be approved by stockholders, seek to finance Mexichem’s expansion and maintain the company’s financial flexibility, it adds.