America Movil (AMX) returned to the dollar bond market for $2bn, pricing competitively to its curve and adding to the EUR1bn ($1.25bn) raised in Europe last week. “We thought there was a good window right now. Last week we had just had the first information out of Europe in a long time that was positive. We thought that was going to be reflected in the markets, which it was,” CFO Carlos Garcia Moreno tells LatinFinance. The wireless provider controlled by Carlos Slim priced a $1.25bn 2022 tranche at 99.490 with a 3.125% coupon to yield 3.185% or UST+168bp, at the tight end of 170bp (+/- 2bp) guidance. A $750m 2042 tranche priced at 98.244 with a 4.375% coupon to yield 4.482% or UST+188bp, at the tight end of 190bp (+/- 2bp) guidance. The 10-year bond traded at 165bp in the aftermarket, and the 30-year at 185bp, according to investors. Garcia Moreno highlights that rates were attractive at the 10 and 30 year maturities, and that AMX wanted to reset the long end of its curve, as it felt the yields there were not representative of how new bonds should price. He says the tranches priced close to flat to the issuer’s dollar curve. “America Movil can come to market in size at almost no concession between 10 and 30-year bonds in the middle of the summer, and with problems in Europe. This is a classic example of defying expectations if the issuer is a high quality issuer, because people will want that deal and need EM exposure,” says a California-based EM investor following the deal. Demand reached $7bn, from 350 accounts. At least 80% of the deal was allocated to US accounts, with the remainder mainly to LatAm and European buyers. Raising funds this week and last allows AMX to reach investors ahead of what Garcia Moreno expects could be a wave of borrowers in the next 2-3 weeks. America Movil will use proceeds to address $3.2bn recently drawn on revolving credit facilities used in its acquisitions in Europe. America Movil has in the last month wrapped up the purchases of a
Category: Regions
AMX Readies MXP Program
America Movil plans to launch as soon as this month a program for the regular issuance of peso-denominated bonds, its CFO says. “We intend to come to market regularly, probably once per quarter. We will be issuing bonds to be placed with both international and domestic investors, utilizing the Europeso format. This time, instead of an isolated issue, it will be a program of regular issuance in the market,” Carlos Garcia Moreno tells LatinFinance. The program should be about 5-years, he says. He declines to comment on the total size, noting only that it will be “meaningful.” The Mexican telecom is in the process of selecting a group banks. “It’s going to be a hugely important program that I think will be the first of its kind worldwide,” the official says.
Credito Real Approaches MXP Bond
Mexico’s Credito Real is targeting a July 18 pricing for a new 3-year domestic floating rate bond of up to MXP1bn ($74m). The deal had originally been expected in March. Proceeds will be used to refinance short-term debt. BBVA is managing the sale, rated A/A on a national scale.
Ecuador Takes Multilateral Funds
Bogota-based multilateral FLAR has approved a 3-year loan of $514.5m for Ecuador, which will be used to finance the sovereign’s balance of payments. The loan has a one-year grace period and an interest rate of Libor plus a margin of between 3.6% and 4.0%. Last month, S&P raised Ecuador’s credit rating to B from B minus, citing the country’s growth prospects and the government’s willingness to pay debt. “The upgrade reflects the perceived improvement in the government’s willingness, as well as capacity, to service its debt due to improved financing options and higher oil production and economic growth prospects,” the agency says.
US Developer Eyes CCD
Hines, a Houston-based real estate company, is planning to raise funds in Mexico’s certificado de capital de desarrollo (CCD) market, according to regulatory filings. The transaction, whose target size has not been specified, would create a fund to invest in the development of commercial and residential properties throughout Mexico. The CCD should be 10 years in length, extendable by up to 2 years. The return structure would be similar to other CCDs — principal plus a preferred return, with remaining proceeds divided 70% to investors and 30% to the managers. BBVA and Credit Suisse are managing. Hines has $36bn AUM globally, and has been active in Mexico since 1992. Real estate investment vehicles are expected to boom in the next few years, with investors now having Fibra real-estate income trusts, CCDs and IPOs to choose from. At least three Fibras are in the pipeline, bankers say, following Fibra Uno’s debut for the class. Property developer Vesta is preparing an approximately $300m IPO to price July 18.
CAF Approves Argentina Project Funds
CAF has approved $400m in funding for Argentina, it says. A 15-year, $250m loan is aimed at the provincial road system via its Programa de Desarrollo Vial Regional II, and a 12-year, $150m wastewater-related loan will go to the Programa de Infraestructura de Saneamiento del Norte Grande, it says. The loans pay Libor plus a spread that CAF charges. The road funding will be for more than 200km of roads, largely in Formosa, Misiones, and Santiago del Estero provinces. The water program will target low-income users, with the goal of upping coverage and sanitation services.
Citi Leads DCM at Halfway Point
Citi led the LatAm DCM tables through the end of June, according to Dealogic, followed by HSBC and Itau. The US bank booked $12.6bn in volume from 52 deals in the first half when cross-border and local market deals are considered, ahead of HSBC ($8.2bn from 42) and Itau ($6.9bn from 41). Citi also claimed the lead when cross-border deals only are considered ($7.4bn), and when local market deals only are considered ($5.1bn). “Business has become fungible across product lines in the region, and we move pretty fluidly from one type of issuance to the other. Issuers are pretty agnostic about what they do, they just want the best terms,” Chris Gilfond, co-head of LatAm DCM at Citi, tells LatinFinance. Overall volume in the market remained on a pace to top last year’s record regional total. Cross-border volume in the region reached $54.2bn in 1H 2012, up from $45.3bn in 1H 2011, and marked the highest half-year volume on record, boosted by an aggressive first quarter. Volume with local market deals included was also higher, hitting $79.9bn, compared to $72.9bn in the corresponding period of 2011. “There is a really solid pipeline of business that should get done. It may need to wait a month or two in terms of finding the right window, but I’d expect something like second quarter volume in the third quarter,” Gilfond says. He expects DCM volume this year to exceed 2011’s total, both in terms of cross-border volume and combined cross-border and local market volume. In particular, appetite for global local-currency transactions should return, with deals appearing in between bouts of volatility. Brazil, Mexico and Peru led the region in 1H 2012, accounting for 54%, 22% and 6% of total volume respectively, Dealogic says. Citi also led in terms of DCM revenue, booking $52m, or 16.7% of the fee pool. The bank was followed by HSBC and JPMorgan, with $26m (8.5%) each.
Compartamos Preps Domestic Issue
Mexico’s Banco Compartamos is preparing to issue up to MXP1.5bn ($112m) in the domestic bond market, according to a regulatory filing. The microlender will issue 5-year bonds in its fourth issuance under a MXP6bn program. Bancomer, Banamex and HSBC are managing the sale. The bank is rated AAA/AA on a national scale. Compartamos last visited the local bond market in August 2011, when it sold MXP2bn in 2016 domestic bonds at TIIE+85bp.
Eventual Sigma IPO Likely: Alfa
Grupo Alfa sees an IPO for its Sigma Alimentos food products unit within the next few years, its CFO says. “At some point, when there are more growth projects in our portfolio, not specifically next year, but in the next few years, you could see Sigma coming out to the market,” Ramon Leal tells LatinFinance. New Mexican equity issuers have been hard to come by in recent years, but Alfa has been doing its part. The MXP10.44bn ($794m) IPO of its Alpek petrochemicals unit in April was the country’s first since July 2011. “Companies that are benefitting today from the growth of Mexico, that are mid-sized companies above $1bn, which are many in Mexico, are likely to get financed in the capital markets. I don’t think you will see a rate of issuances similar to Brazil, but you will start to see more companies coming to the market. The diversification of sources of finance will include for many Mexican companies the capital markets and the Bolsa in Mexico,” the official says.
Edenred Adds in Brazil
Edenred has expanded in Brazil through the acquisition of food voucher issuer Comprocard, it says. The French corporate services provider is spending EUR24m ($30m) on the Brazilian, as it continues to target growth in the emerging markets. Comprocard issues around EUR100m in volume annually. Edenred has operated in Brazil since 1976, and is also present in Argentina, Chile, Mexico, Peru, Uruguay and Venezuela.