Category: Mexico

Despite hopes of a decoupling from the US, LatAm is very exposed to the continued storm from the subprime crisis, warns Mexican central bank governor Guillermo Ortiz. In a speech to the Felaban annual assembly in Miami, Ortiz addressed the increase in risk perception caused by a lack of transparency and drop in inter-bank liquidity. “The impact on Latin America is going to be very significant,” says Ortiz. While most of the region’s banks are not directly hit by the crisis, the wider fallout in the US economy is of most concern to LatAm. “This is really a very significant crisis in the US,” says Ortiz, adding that there are grave concerns about what will happen next. The governor trotted out the decoupling argument touted by the bulls, adding, “I don’t buy that theory . . . A recession in the US will have a momentous impact on the rest of the world, and for sure in Latin America,” says Ortiz. The governor also struck out at the complicity of the rating agencies, likening them to conflicted appraisers being paid by house sellers to get the best valuation for their home. Analysts fear that US bank losses in subprime will bleed out over the next few years, eventually totaling hundreds of billions of dollars. Pimco’s Bill Gross told CNBC Monday that losses could amount to another $250bn over the next two years.

Mexican autoparts maker Nemak plans to issue MXP2.5bn in bonds on or around November 15, according to a banker on the deal. The offering will be split into a 2014 bullet FRN basis TIIE, and a 2017 bullet tranche that could be fixed or floating. The amounts of each remain to be set. Proceeds will repay a term loan. Banamex, BBVA and HSBC are leads. That same week, Ferrocarril Mexicano is expected to price about MXP2.5bn in bonds, consisting of a 2014 floating-rate tranche and 15-20-year fixed. The proceeds will refinance old debt. BBVA, IXE, and Banamex are leading. “The local market is back,” says a banker mandated on the deal. “The pipeline that was there before the summer has returned, along with additional issuers wanting to execute before year end.”

Aluprint, the Mexican packaging company, has closed a $135m 7-year dual currency loan. The borrower and its joint bookrunners GE Capital and Rabobank gave lenders the option to lend in pesos or dollars and close to $55m worth of the total came in local currency. Out of the box, the loan pays 375bp over Libor or TIIE, on a leverage grid. MLAs include peso lenders Banamex, Banorte and Bancomer, as well as Bladex. Unicredit, Allied Irish Bank and Invex came in with retail tickets.

Advent International has acquired 100% of Grupo Gayosso, the Mexican funeral services company, from private investors in a $317m leveraged buyout. The transaction was funded with equity provided by Advent and $195m in acquisition financing led by Scotiabank and Ontario Teachers’ Pension Plan. Besides a senior term loan and working capital facility, the financing includes a $40m subordinated loan with an 8-year bullet payment. Gayosso offers a complete range of funeral products and services through a nationwide network. “We see significant opportunities to grow by acquiring incumbent players in key cities not served by Gayosso and by opening new facilities in select locations,” says Alfredo Alfaro, a partner in Advent’s Mexico City office. Advent predicts consistent long-term growth in the Mexican funeral services market. In conjunction with the buyout, Advent has appointed a new CEO of Gayosso, Rafael Obregón, and named one of its operating partners, Kenneth Budde, to the company’s board. Obregón was previously CEO of Casa Herradura, the tequila producer. Gayosso is the latest acquisition by Advent’s $1.3bn Latin American Private Equity Fund IV.

Advent International has acquired 100% of Grupo Gayosso, the Mexican funeral services company, from private investors in a $317m leveraged buyout. The transaction was funded with equity provided by Advent and $195m in acquisition financing led by Scotiabank and Ontario Teachers’ Pension Plan. Besides a senior term loan and working capital facility, the financing includes a $40m subordinated loan with an 8-year bullet payment. Gayosso offers a complete range of funeral products and services through a nationwide network. “We see significant opportunities to grow by acquiring incumbent players in key cities not served by Gayosso and by opening new facilities in select locations,” says Alfredo Alfaro, a partner in Advent’s Mexico City office. Advent predicts consistent long-term growth in the Mexican funeral services market. In conjunction with the buyout, Advent has appointed a new CEO of Gayosso, Rafael Obregón, and named one of its operating partners, Kenneth Budde, to the company’s board. Obregón was previously CEO of Casa Herradura, the tequila producer. Gayosso is the latest acquisition by Advent’s $1.3bn Latin American Private Equity Fund IV.

Fresh from a successful dual-tranche dollar tap, Mexican mobile heavyweight America Movil is looking to raise debt in pesos. “We’ll probably do a little bit in Mexico,” America Movil CFO Carlos Garcia Moreno tells LatinFinance. He declined to specify terms, other than to say that a floater would be short dated and a fixed rate issue likely be longer than 5 years. Garcia suggests that another dollar issue is unlikely for a while, and that America Movil will continue to alternate between the bond and bank market depending on relative pricing. “We’ll keep our eyes open in other markets,” he adds. The cash rich telecom returned to market after a 2-year absence Wednesday to raise $1bn to help fund capex, a recently announced dividend and an acquisition in Jamaica. It included a $600m 10-year at 99.633 with a 5.625% coupon to yield 5.673%, or 135bp over Treasuries, and a $400m 30-year at 99.047 with a 6.125% coupon to yield 6.195%, or 155bp over. Guidance was 135bp area and 155bp-160bp and the bonds were heard trading around re-offer by the close. “In terms of absolute costs, we got a very very good deal,” says Garcia. “The spread was right on the money.” According to the borrower, some high grade accounts rotated into America Movil from US telecom exposure. Joint leads were Credit Suisse and Goldman Sachs.

Fresh from a successful dual-tranche dollar tap, Mexican mobile heavyweight America Movil is looking to raise debt in pesos. “We’ll probably do a little bit in Mexico,” America Movil CFO Carlos Garcia Moreno tells LatinFinance. He declined to specify terms, other than to say that a floater would be short dated and a fixed rate issue likely be longer than 5 years. Garcia suggests that another dollar issue is unlikely for a while, and that America Movil will continue to alternate between the bond and bank market depending on relative pricing. “We’ll keep our eyes open in other markets,” he adds. The cash rich telecom returned to market after a 2-year absence Wednesday to raise $1bn to help fund capex, a recently announced dividend and an acquisition in Jamaica. It included a $600m 10-year at 99.633 with a 5.625% coupon to yield 5.673%, or 135bp over Treasuries, and a $400m 30-year at 99.047 with a 6.125% coupon to yield 6.195%, or 155bp over. Guidance was 135bp area and 155bp-160bp and the bonds were heard trading around re-offer by the close. “In terms of absolute costs, we got a very very good deal,” says Garcia. “The spread was right on the money.” According to the borrower, some high grade accounts rotated into America Movil from US telecom exposure. Joint leads were Credit Suisse and Goldman Sachs.

Gas Natural has won the auction to acquire a portfolio of EDF electric generation assets in Mexico, it said in a statement. The package includes five combined-cycle gas-fired plants totaling 2,233 megawatts, their operating company Comego and the 53km Gasoducto del Rio pipeline. The Barcelona-based utility plans to fully finance the $1.45bn acquisition through debt. The deal is expected to be completed by the end of the year following approval from Mexican and French authorities. The transaction will be earnings accretive from the first year, Gas Natural said. Gas Natural is now Mexico’s second-largest private power generator. JPMorgan ran the sale for EDF, while UBS advised Gas Natural.