Category: Mexico

Mexico expects the third highway concession package from its MXP270bn Fonadin national infrastructure fund to be bid by the end of the year, head of public credit Gerardo Rodriguez tells LatinFinance. Mexico will have further details out in a few months. Materials for the second, so-called “Pacific Package” were distributed in February. It incorporates some existing roads – Guadalajara-Tepic, Mazatlan-Culiacan and Aeropuerto Los Cabos-San Jose del Cabo – and a few others to develop the Mazatlan bypass, Culiacan bypass, Guadalajara southern bypass, Compostela-Puerto Vallarta and San Jose del Cabo-Cabo San Lucas. The third concession is also expected to mix greenfield and brownfield projects. The first package from Mexico’s Fideicomiso de Apoyo para el Rescate de Autopistas Concesionadas (FARAC) trust was sold in 2007 to Empresas ICA and Goldman Sachs Infrastructure Partners. The MXP37.1bn loan package secured was the first such international financing done in pesos, and the biggest local currency syndication the LatAm project market has ever seen. Lenders holding big peso tickets nervously await a swift takeout, but Rodriguez says the project will want to accumulate a track record before coming back to market.

In an April 6 brief entitled, “Mexico’s TRIG Readies $1bn PF,” the bank on Peru LNG’s project finance was incorrectly stated. The leads are BBVA and Socgen.

Credit Suisse, Mexico and Cleary Gottlieb were among the big winners at last night’s LatinFinance 20th Anniversary Gala Dinner & Awards Ceremony in Miami. Following is a list of winners presented at the event.

A $1bn project finance package for Tren Interurbano de Guanajuato (TRIG), a light railway system in the eponymous Mexican state is heard forthcoming in the next six weeks, say bankers close to the process. The 10-year financing, being led by WestLB, is a refinancing of existing project debt. A substantial portion of the new debt will also come via a subordinated tranche, says the banker. The new package is to be rated and will include a guarantee by German ECA Hermes. ICA and Siemens’ Mexico arm are the two engineering shops working on the project. Pricing and tranche sizes are still forthcoming. The deal is among a handful of large projects in the works across the region, and one of several deals being led by WestLB. Others include Peru LNG, Transalta, and Buenaventura Port.

A $1bn project finance package for Tren Interurbano de Guanajuato (TRIG), a light railway system in the eponymous Mexican state is heard forthcoming in the next six weeks, say bankers close to the process. The 10-year financing, being led by WestLB, is a refinancing of existing project debt. A substantial portion of the new debt will also come via a subordinated tranche, says the banker. The new package is to be rated and will include a guarantee by German ECA Hermes. ICA and Siemens’ Mexico arm are the two engineering shops working on the project. Pricing and tranche sizes are still forthcoming. The deal is among a handful of large projects in the works across the region, and one of several deals being led by WestLB. Others include Peru LNG, Transalta, and Buenaventura Port.

Credit Suisse, Mexico and Cleary Gottlieb were among the big winners at last night’s LatinFinance 20th Anniversary Gala Dinner & Awards Ceremony in Miami. Following is a list of winners presented at the event.

The board of Mexico’s Grupo Aeroportuario del Centro Norte (OMA) has approved a MXP300m share repurchase. The total adds to a MXP1bn amount authorized for share repurchases last year. It is unclear how the repurchase will be funded.

Despite the economic crisis in the US, the Mexican economy will experience moderate expansion in 2008, according to Credit Suisse, forecasting growth at an average annual rate of 2.4% in 2008, down from 3.3% in 2007. The Mexican government reported that the monthly GDP proxy rose 4.2% year-on-year in real terms in January and 0.9% relative to December (non-annualized), after adjustments, says the shop. “These were surprisingly strong figures, considering that real GDP growth averaged 3.3% in 2007,” CS says. The available data for early 2008 supports the thesis that the Mexican economy is more resilient than in the past. “It’s still early, but so far, so good,” the shop says.

Mexico’s sale of $1.25bn in notional value of warrants was well bid Thursday, highlighting robust investor interest in rotating from legacy hard currency paper into domestic debt. The transaction, which continues Mexico’s ongoing liability strategy, gives the option to exchange UMS bonds denominated in foreign currency for domestic notes. Warrants with a notional value totaling $1bn allow investors to swap 21 series of USD, EUR, Deutsche Mark and Italian Lire denominated notes for 2014, 2017 and 2036 Mbonos priced at $23.00 each, versus a $17.50 minimum. The second series, totaling $250m and swapping the same 21 series for 2017 and 2035 bonds denominated in UDIs – the first time UMS has offered the inflation-linked unit in a warrant deal – priced at $19, versus a $10 minimum. Demand reached $3.2bn for the first series and $962m for the second. The price was lower than the estimates given before the sale, such as $48 and $41 expected by Lehman. However, more important than the price, notes a DCM banker away from the deal, was the oversubscription, as the value is in the exchange of foreign debt for domestic, rather than in cash collected in the sale of the warrants themselves. The exchange will occur October 9. Barclays and Merrill Lynch managed the transaction.

The Mexican banking system has maintained sound performance, and the outlook remains adequate for the foreseeable future, Fitch says in a report. However, strong loan growth domestically has affected delinquency ratios, and global capital markets conditions put pressure on the cost of credit and funding, as well as liquidity. “While continued asset quality deterioration may be of some concern, banks with the worst-performing retail portfolios are gradually tightening lending acceptance criteria, while risk-adjusted profitability remains sound,” the agency says. Fitch expects adequate performance from the major banks, spurred by continued double-digit loan growth, despite the likelihood that profitability will decline from recent historic highs.