Category: Mexico

Mortgage lender Hipotecaria Credito y Casa plans to place June 11 up to MXP1bn in floating-rate 2012 bonds backed by construction bridge loans. Barclays and Santander are managing the AAA sale. Also expected by the end of the month are a MXP700m 3-year floating-rate issue from Vitro, through Ixe, and a 3-year issue from Volkswagen Leasing for up to MXP2bn, via Santander and Inbursa.

Mexico-based cement multinational Cemex has scored a major coup in the debt markets by raising a $1.05bn perpetual bank loan – the first of its kind in LatAm – LatinFinance has learned. The seasoned visitor to the markets has issued perpetual bonds in the past – the latest tap for EUR730m in May 2007 – getting equity treatment that allows Cemex to raise low-cost funds with a much gentler impact on leverage ratios than a plain vanilla bond. With a perpetual loan, however, the accounting treatment is untested. The facility was raised by New Sunward Holding, a Cemex subsidiary, with a club of banks, led by structuring agent HSBC, as well as Santander and RBS as joint lead arrangers and bookrunners. The deal pays Libor plus 100bp in the first 18 months and steps up to Libor plus 200bp in months 18-36. Starting in year 5, the margin steps up again, presumably to much higher levels. ING and Caja Madrid are MLAs. The deal is guaranteed by Cemex.

At first blush, a $1.05bn perpetual loan facility for Mexico-based cement giant Cemex appears to be an act of clever financial engineering – a move to potentially reduce short term debt with new obligations that have a minor impact on leverage. Cemex has repeatedly told investors that the goal is to get the net debt to Ebitda ratio to 3.0x by year-end. As of Q1, the ratio was 3.7x, up from 1.2x a year prior, and virtually unchanged from Q4. The company has also waived two bank covenants that require leverage to be at or below 3.5x, according to an analyst. “Their leverage is very high for the ratings category,” says Sebastian Hofmeister, vp at Moody’s’ corporate finance department in Mexico. “The rating is based on the assumption that leverage will come down quickly,” he adds. Moody’s rates Cemex unit Rinker Baa2 with a negative outlook, reflecting the credit profile of the parent. Cemex officials were not immediately available for comment.

Mexican export development bank Bancomext has sold two Chilean toll road concessions to Spain’s Global Via Infraestructuras, for $553m. The concessions, Sociedad Concesionaria Autopista del Aconcagua and Sociedad Concesionaria Autopista del Itata, were put up for sale in January and have concessions expiring in 2020. BNP Paribas and Nafin advised on the sale. Bancomext acquired the roads in 1998 from Mexican construction company Grupo Tribasa. In the same announcement, Bancomext said it completed the restructuring of $400m in debt Cuba owed to Mexico and is in the final stages of selling the World Trade Center in Mexico City.

Mexican company Camiones Andrade has won the bid for a sale of 356 trucks to transport gasoline and diesel to Pemex, the Mexican oil giant says. Pemex will invest MXP425m in the new units, the company says. The purchase is part of a strategic initiative aimed at increasing efficiency and safety in its operations, Pemex says. The trucks will be use for distribution purposes within Mexico, the company adds.

Last month’s State of Mexico refinance with the help of a Banobras first loss guarantee opens the door for other borrowers to leverage the state development bank’s rating. “This deal is very important because it opens up a new form of operating for Banobras,” Banobras president Alonso Garcia Tames tells LatinFinance. Garcia says Banobras is starting to assess which indebted states could benefit from guarantees, and he does not rule out applications beyond states and municipalities. “This a very efficient product that will help us support states in collaboration with the private sector,” says Garcia. “For project finance, we think this instrument could be very valuable,” he adds. This would apply to local and foreign firms working on projects in Mexico. “It’s a way for the development bank – instead of competing with the private sector – to collaborate with it,” says Garcia. The official adds that there are no new deals coming in the short term. Banobras is also working on a project to channel funds to Mexican municipalities, particularly less developed ones. Last year’s pilot in Michoacan paved the way for new projects underway in Chiapas and upcoming in Puebla, Oaxaca, Durango and Veracruz.

Spain’s Global Via has won a bid for 100% of the shares of SCADA and SCADI, two Chilean road concessionaries owned by Mexico’s export bank Bancomext, for $553m. BNP Paribas and Nafin advised on the auction. OHL, Abertis, Autopistas del Pacifico and CCR also participated in the auction process, the bank says. Global Via is a joint venture of Spain’s road developer FCC and savings bank Caja Madrid, focused on infrastructure, railroads, road concessions and port operations.

Following the success of a debut first loss guarantee venture with the State of Mexico’s jumbo refinancing, Banobras seeks more applications for its new product. Typically a creditor to states and municipality, the development bank’s function has been usurped by ample private liquidity. “We’re substituting that role with being a guarantor,” Banobras president Alonso Garcia Tames tells LatinFinance. State of Mexico last month wrapped up the final phase of a MXP25.2bn refinance, extending duration and slashing the price on 87% of its debt, using a 27% guarantee from Banobras. The enhancement was designed to get the state the best possible rating with the smallest possible commitment, says Garcia. In another new feature for Banobras, the bank was structuring agent on the state’s deal and also acted as intermediary on swaps to fixed rate. Even after paying for the guarantee, structuring and swaps, State of Mexico’s all in cost was a weighted average spread of 47bp over 28-day TIIE versus a 170bp spread before the refinance, according to Garcia. “It was more competitive for the state [than funding alternatives],” says the official, adding that it saves the state MXP2.4bn in debt service for the rest of the Calderon administration. “It’s a very important deal for the local markets because it shows the development of the Mexican market in the last few years,” he adds.

Mexico’s Grupo Ixe Financiera is heard close to agreeing to acquire the GMAC Financiera and GMCA Hiopotecaria units from Residential Capital. Negotiations between the niche Mexican bank and North American lender that has lost millions in the US subprime crisis were announced May 20. The assets of the combined units would be more than $1.7bn, according to S&P. This would promptly make Ixe a player in the growing Mexican mortgage market. The agency, however, has placed Ixe on credit watch negative, due to the high leverage – about MXP12bn in debt – that would come from the union.