Mexico’s Comision Federal de Electricidad (CFE) plans to raise up to MXP10bn ($776m) in a two-tranche domestic bond sale November 10. The proposed 5-year notes would pay a spread to the TIIE and 10-year notes a fixed-rate. The issuance falls under a MXP100bn program, for which Banorte-Ixe, BBVA Bancomer, Santander and HSBC have been hired. The government electricity monopoly’s most recent domestic bond was in June, when the issuer, rated AAA on a national scale, priced a MXP12bn ($911m) floating rate note via Banorte-Ixe, HSBC and Santander. CFE’s last foray into the international markets was a $750m 30-year bond done last year.
Category: Regions
Posted inDaily Brief
KOF Chooses CEO Successor
Coca-Cola Femsa (KOF) has named John Santa Maria as CEO, as of January 1, 2014, it says. Carlos Salazar, who has been CEO since 2000, is stepping down at the Coca-Cola bottler at the end of the year. Santa Maria is COO at KOF’s South America division, and has been with the company 18 years. Salazar is moving over to Femsa – the beverage and convenience store company that owns 50% of KOF – to become CEO. Current Femsa CEO Jose Antonio Fernandez is to leave the position and become executive chairman of Femsa’s board.
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Colombia Holds Rates
Colombia’s central bank held rates at 3.25% during its bank meeting Friday, in line with market expectations. It cites global economic conditions and interest rate considerations as factors in its decision. Itau says in a note following the decision that it expects the central bank to likely cut 25bp in December. It adds that it does not anticipate hikes in 2014.
Posted inDaily Brief
Mexico Cuts Again
Mexico’s central bank cut rates 25 basis points Friday, taking interest rates from 3.75% to 3.50%, largely in line with market expectations. However, it did surprise the markets with language suggesting the cut would be the last for a while. This month’s decision, which followed a 25bp cut that surprised the markets last month, takes into consideration factors including weakness in the global economy, the US Federal Reserve’s actions and slower-than-expected growth in emerging economies. “The forward guidance offered at today’s meeting is consistent with our view that, absent signs that the expected recovery is gaining no traction, the short easing cycle would end today with a 25bp cut, given the already low and simulative level of nominal and real rates,” says Goldman Sachs in a note following the decision. Itau says it doesn’t expect policy rates to change “at least until 2015.”
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Peruvian Lender Reaches General Syndication
Peruvian commercial bank BanBif is heard to be launching general syndication of a $100m, 3-year bullet loan this week. Further details on the terms have not yet been disclosed. This is BanBif’s first syndicated loan in the international markets. Bladex is leading the trade finance-related deal, with Citi and Santander committed as MLAs. The IFC earlier this year made a $50m equity investment in BanBif, which is rated BBB minus.
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Salsa Maker Plans Domestic Bond
Grupo Herdez is planning to issue up to MXP5bn ($388m) in Mexico’s domestic bond market November 12, according to people familiar with the transaction. The maker of salsas and other food products plans 5-year floating and 10-year fixed-rate tranches. The issuer is rated AA on a national scale. Proceeds will be used to improve Herdez’s debt profile and for general corporate purposes. BBVA Bancomer and HSBC are managing. The borrower’s last domestic deal was a MXP600m 2015 done in 2011 at TIIE+60bp.
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Mexican Miner Targets RegS
Mexican copper miner Cobre del Mayo is looking to raise funds in the dollar bond market, according to people following the process. The B3/B issuer plans to begin meeting investors Tuesday, visiting six cities in North America, Santiago, Hong Kong, Singapore, Switzerland and London. Jefferies, BCP Securities and Nomura are managing the RegS-only sale. Cobre del Mayo operates the Piedras Verdes open-pit copper mine near Alamos in the state of Sonora.
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Mexico Expected to Keep Cutting
Analysts are largely expecting another 25bp cut when Mexico’s central bank meets today. Last month, authorities cut interest rates 25bp to 3.75%, surprising the market. Goldman Sachs says another 25bp rate cut would make sense today, though also gives a 20% probability to a 50bp cut. “Not only will time reveal important information for the proper calibration of monetary policy (e.g., whether the recovery of demand is indeed firming) but also rushing to accelerate the pace of cuts to 50bp without any prior guidance could destabilize the FX market and capital account portfolio flows,” it says in a note ahead of the meeting. Barclays is another shop expecting a cut, calling for a 25bp cut today and another 25bp in December. Colombia’s Central Bank is also set to meet today.
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Pemex Returns for Ex-Im Backed Bonds
Pemex has sold a $350m bond backed by the US Export-Import bank, according to people familiar with the trade. The 2024 bond with a 5.53-year average life priced at par with a 2.29% coupon, equal to MS+66bp and in line with 66bp-area guidance and earlier 70bp initial price thoughts. Proceeds will be used for general corporate purposes. BNP Paribas and Credit Agricole managed the sale, rated AAA. The sale follows a $750m floating-rate US Ex-Im backed deal in September, in which the issuer paid Libor+43bp.
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Wamex Prepares Second CCD
Mexican private equity manager Wamex is preparing a new certificado de capital de desarrollo (CCD) transaction, according to regulatory documents. The issuer has not defined a target amount for the 10-year fund that will make use of capital calls to grow. As with Wamex’s first CCD, the fund will target Mexican businesses in the middle market, which it defines as having sales of MXP500m ($39m) to MXP1.5bn per year. The manager is offering investors a return structure featuring principal plus a 10% preferred return, followed by the 80%-20% distribution typical of private equity. Banorte-Ixe is managing, with ING as structuring agent. Wamex raised MXP750m in its first CCD transaction in 2009, before reopening in 2011 for MXP667m.