For an economy that has for years fallen short, a reversal of fortunes might finally be in store. Mexico’s domestic output is poised for the second year running to expand […]
Category: Regions
Posted inMagazine
HEALTHCARE: The right medicine
Latin America’s rapidly consolidating healthcare sector is poised to continue growing as the population ages and gets wealthier
Posted inMagazine
MEXICO: Heat of the moment
Rebounding growth and the promise of reform have turned many bullish on Mexico’s prospects – not least relative to Brazil’s. Separating hype from reality has scarcely been more important
Posted inMagazine
PEOPLE: Shuffling the decks
Dennis Holtzapffel has joined Espirito Santo as head of LatAm DCM. He left Jefferies in March, where he had been head of EM debt capital markets and syndicate for two […]
Posted inMagazine
PANAMA: Boom town blues
Economic growth in double digits, ambitious infrastructure and mining plans as well as a real estate boom. Yet despite vast public investment, the government’s popularity is still sinking
Posted inDaily Brief
Fund of Funds CCD Set for First Close
AGC Controladora is set to raise the first cash from a fund of funds certificado de capital de desarollo (CCD) transaction in Mexico’s domestic market. The private equity manager affiliated with US-based Northgate Capital is set to close the first MXP600m ($45m) portion of the fund, according to regulatory documents. It plans to raise up to MXP13bn through a 10-year fund, adding to the initial amount through capital calls. The transaction is being called the first fund of funds in the CCD market, though it will be able to make direct investments in Mexican companies in addition to other PE funds. Regulators’ decision last year to allow capital calls in CCDs ended a debate that had slowed issuance for the 2-year-old asset class. Many were optimistic this would lead to more deals, but market conditions have not cooperated. The ACG fund plans to invest in a variety of sectors, but the return structure varies somewhat from most PE fund-based CCDs. Investors receive their initial investment plus a preferred return equivalent to the Mexican Bolsa’s plus 500bp, before the managers take a 5% cut, with any remaining funds being divided between investors (95%) and managers (5%).Vector is managing the sale. Earlier this month, Corporcaion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, filed for a MXP1bn-MXP5bn ($71m-$355m) CCD fund investing alongside CMIC’s FdeF II fund, seeking investments in other funds targeting real estate, infrastructure and other areas.
Posted inDaily Brief
Pemex Continues Ex-Im Bond Issuance
Pemex has issued $400m in bonds backed by the US Export-Import bank, the second issuance under a $1.2bn program guaranteed by the American ECA. The latest batch of 2022 notes with a 5.71-year average life priced at par with a 1.95% coupon, landing inside Tuesday’s 2.00% yield. Pemex has now issued $800m under the program designed to include multiple issuances totaling up to $1.2bn, and aimed at US investors. Proceeds of the issue will be used for payments for US imports of goods and services purchased by Pemex and its subsidiary entities from US suppliers. Credit Agricole, Goldman Sachs and JPMorgan managed the sale, as they did Tuesday’s. In addition to providing a cheap and diversified source of funding, the deals under the program represents the first time an issuer has issued a US Ex-Im backed structured bond for purposes outside of aviation funding, according to bankers following the trade.
Posted inDaily Brief
Banco do Brasil Plans Yen Issuance
Banco do Brasil is preparing a yen-denominated bond, according to sources familiar with the matter. The bank has selected Bank of America Merrill Lynch, Banco do Brasil, JPMorgan, Mizuho and SMBC Nikko for the “euro yen” deal that would represent a departure from LatAm issuers’ preference for the Japanese retail-focused Samurai sales of recent years. The timing and details are unclear, but the sale is heard to be as soon as late July at perhaps $500m-equivalent for up to 5 years. The Brazilian bank issued $24m-equivalent in yen-denominated bonds in 1995, according to Dealogic.
Posted inDaily Brief
Colombia Expected to Hold Rates
Colombia’s central bank is expected to hold the country’s benchmark interest rate at 5.25% when it meets today. “The policy statement should maintain a broadly neutral bias but the language may turn more dovish given the deteriorating external backdrop and ongoing loss of domestic demand momentum,” says Goldman Sachs, among the banks forecasting a hold.
Posted inDaily Brief
Davivienda Capitalizes on Colombia Demand in Bond Debut
Banco Davivienda saw 6x demand for its first-ever dollar bond, taking advantage of demand for Colombian financial credit exposure. Colombia’s third largest bank drew $3bn in orders for the $500m 2022 and achieved one of the lowest-ever coupons in the LatAm Tier 2 bond space, according to bankers following the deal. The Ba1/BB+ subordinated bond priced at 99.441, with a 5.875% coupon, to yield 5.950%, or UST+437.5bp, pricing at the tight end of 6%-area guidance, which followed low 6% whispers. Some EM investors considered the Colombian blue chip’s deal fair value versus Bancolombia’s subordinated 2020 bonds, seen trading at around 5.35% yield. Leads were heard indicating that the bond came nearly flat to where a new Bancolombia bond would price. “Great deal for Davivienda as a new borrower and pricing a Tier 2 inside 6.0%. The book size shows strong demand for a Colombian pure play,” notes a DCM banker away from the deal. The bonds were trading up 1 point in the grey, according to a trader. Roughly 49% was allocated to US buyers, 29% to LatAm accounts, and 22% to Europe and less than 1% to Asia. The Colombian lender is looking to help fund the $800m acquisition of HSBC subsidiaries in El Salvador, Costa Rica and Honduras agreed in January, as well as general corporate purposes. Credit Suisse and JPMorgan managed the sale.