Category: Mexico

Mexican homebuilder Geo and lender Volkswagen Leasing are expected to issue local peso debt today in separate transactions. Geo plans to place up to MXP2bn in A minus 2010 notes via Banorte and Santander, at an expected rate of TIIE plus 150bp-160bp. Volkswagen Leasing is set to price MXP2bn in AAA rated 2011 notes via ING and BBVA.

Controlladora Comercial Mexicana (CCM) and Banorte have agreed to start a joint venture to offer financial services to customers in CMM’s supermarket chains. The MXP1.3bn banking venture is expected to start operations in the second half of 2008 and will be 51% controlled by CCM and 49% by Banorte. The agreement is aimed at providing banking services to CCM’s lower-income customers, who largely lack financial services, the companies said. Other Mexican retailers have entered the banking business, including Organizacion Soriana, with Banamex, and Wal-Mart, which started its own bank last year.

Dubai developer Nakheel is buying a 50% stake in the One&Only Palmilla resort in Los Cabos, Mexico. It did not disclose the exact price paid for the 172-room luxury resort and golf course, but gives the resort’s total enterprise value at $315m. Nakheel is purchasing the stake held by several entities affiliated with the Whitehall Street Real Estate Funds, a series of real estate opportunity funds sponsored and managed by Goldman Sachs Group. The remaining 50% is owned by Fort Lauderdale-based developer Kerzner.

S&P has cut to A minus from AAA a MXP550m 2032 UDI-denominated deal from Libramiento Matehuala, after cutting guarantor XL Capital. The deal is still on CreditWatch negative, which it was dropped to at the end of January. S&P adds that it may cut the deal further if XL falls again.

Three peso-denominated bond transactions are expected in Mexico this week. Volkswagen Leasing plans to price Wednesday MXP2bn in AAA rated 2011 notes via ING and BBVA. The same day, homebuilder GEO plans to place up to MXP2bn in A minus 2010 notes via Banorte and Santander. It expects to come at TIIE plus 150bp-160bp. Theatre operator MM Cinemas is scheduled to follow Thursday with MXP1bn in A minus 2013 notes via Santander, expected to fetch TIIE plus 170bp-185bp.

Mexican homebuilder Corporacion Geo is preparing an issue of up to MXP2bn in floating-rate notes, to price Wednesday. Guidance on the issue, which may include 2011 or 2013 notes, has been given at 150-160bp over 28-day TIIE. Proceeds from the A minus deal will help repay short term debt, as will a MXP300m issue coming due in March. Santander and Banorte are managing the sale.

Mexico’s central bank completed its first ever UDI bond exchange Wednesday, but only managed to buy back 17% of the $1.1bn it offered to swap. “The response was less than what we had offered,” Alicia Nunez, a director for public credit operations at Hacienda, tells LatinFinance. “It’s just a question of supply and demand. We believe in giving the market a chance to migrate towards the more liquid issue.” Banxico bought back $184.2m worth of 4.5% 2025 UDI-denominated bonds and offered in exchange 4.5% 2035 UDI-denominated bonds. An auction for the buyback price for the 2025s resulted in the issuance of $179.6m of the more liquid 2035 UDI notes. The central bank’s next auction date, March 5, could bring a similar offer for inflation-linked or fixed-rate peso-denominated bonds.

Calgary-based generator TransAlta has agreed to sell its Mexican assets to InterGen Global Ventures for $303.5m in cash. Intergen, a generator co-owned by the Ontario Teachers’ Pension Plan and AIG Highstar Capital, will buy TransAlta’s 252MW gas-fired plant in Campeche, a 259MW gas-fired plant in Chihuahua and all their associated commercial arrangements. The transaction is subject to regulatory approval in Mexico and is expected to close by mid-year. The shedding of its Mexican assets is the culmination of a strategic review period for TransAlta, which expects to take a C$55m-C$65m Q1 charge reflecting the difference between the purchase and sale prices. It plans to use a significant portion of the proceeds to buy back shares.

Calgary-based generator TransAlta has agreed to sell its Mexican assets to InterGen Global Ventures for $303.5m in cash. Intergen, a generator co-owned by the Ontario Teachers’ Pension Plan and AIG Highstar Capital, will buy TransAlta’s 252MW gas-fired plant in Campeche, a 259MW gas-fired plant in Chihuahua and all their associated commercial arrangements. The transaction is subject to regulatory approval in Mexico and is expected to close by mid-year. The shedding of its Mexican assets is the culmination of a strategic review period for TransAlta, which expects to take a C$55m-C$65m Q1 charge reflecting the difference between the purchase and sale prices. It plans to use a significant portion of the proceeds to buy back shares.