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.
Category: Regions
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.
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.
Colombian Bank Upsizes Local Bond
Banco Popular has sold COP400bn ($213m) in Colombia’s domestic bond market, upsizing from COP250bn, according to people familiar with the sale. It sold a COP191bn 18-month bond paying 2.09%, a COP105bn 2015 at 3.10%, and a COP104bn 2018 at 3.89%. The bonds are rated AAA on a national scale. Banco Popular led the deal with a group of banks, including Casa de Bolsa, Corredores Asociados, Acciones de Valores, Serfinco, Ultrabursatiles, and Credicorp.
Peru Scores Second BBB+
Fitch has upgraded Peru to BBB+ from BBB, it says, owed to strong growth, stable finances, and overall macroeconomic performance. A “track record of policy coherence and credibility,” as well as “fiscal and external financing flexibility” underpins Peru’s strong shock absorption capacity. “Continued pragmatism under the Humala administration and a steady progress on reforms suggests that the risk of a marked departure of economic policies has reduced,” the agency says. Despite forecasting a slowdown to 5.4% in 2013, Fitch expects Peru’s GDP growth to be one of the strongest in the BBB category during 2013-2015, boosted by mining investment flows and a doubling of copper production by 2016. Peru’s government debt level is low relative to rating peers, and is expected to decline to 18.9% of GDP in 2013, likely approaching 15% by 2015. The outlook is stable. The new Fitch rating joins BBB+ and Baa2 marks.
OHL Places Mexico-Linked Convert
Spain’s OHL has sold EUR100m ($139m) in bonds convertible into shares of its OHL Mexico subsidiary. The infrastructure specialist announced Wednesday morning a reopening of the issue, originally sold in April, to offer EUR75m of the 2018 bonds that pay a 4.0% coupon. The transaction was upsized to EUR100 and priced at 102.0, according to Dealogic data. The bonds are convertible at the holder’s discretion into OHL Mexico shares at a price of EUR2.72 per share, according to regulatory filings. OHL Mexico shares closed at MXP34.06 ($2.62), or EUR1.90, Wednesday. UBS managed the transaction, which follows the original EUR300m sale in April.
Evercore Hires NY Banker
Evercore has hired Fernando Soriano as a senior managing director leading the firm’s LatAm cross-border advisory services, it says. Soriano is to be based in New York and joins from BNP Paribas, where he was most recently head of corporate finance for Mexico. He has also worked at Hill Street Capital, Salomon Smith Barney and Lehman Brothers.
CAF Raises $200m with Private FRN
Corporacion Andina de Fomento (CAF) has raised $200m through a private placement, Gabriel Felpeto, CAF’s director for financial policies, tells LatinFinance. The AA minus/Aa3/A+ supranational lender’s 2015 floating-rate note priced at par with a coupon of Libor+53bp. Bank of America Merrill Lynch was sole lead. The deal follows a EUR200m 2033 transaction sold in the German market in September, which priced at 95.643 with a 3.625% coupon to yield 3.944%. Felpeto says while CAF’s funding needs are taken care of for the year, the borrower will continue to look at the USD, EUR and other markets for possible prefunding opportunities.
Cabei Names Capital Markets Head
The Central American Bank for Economic Integration (Cabei) has hired Ricardo Rico Franco as head of the capital and financial markets department, it says. He comes to the role from the Fondo Latinoamericano de Reservas (FLAR). Jorge Cortes had been acting head of the department.
Popular Heads to Bond Market
Banco Popular plans to sell up to COP250bn ($133m) in Colombia’s local bond market today, with the ability to upsize to COP400bn, it says. The Colombian bank can choose from an 18-month IBR-linked tranche, a 2-year IPC-linked tranche and a 5-year IPC-linked tranche. The bonds are rated AAA on a national scale. Banco Popular leads the deal with a group of banks, including Casa de Bolsa, Corredores Asociados, Acciones de Valores, Serfinco, Ultrabursatiles, and Credicorp.