The Mexican state of Oaxaca has raised MXP1.947bn ($140m) through the sale of a domestic bond. The 15-year bond priced at TIIE+135bp, wide of TIIE+125bp-130bp price talk. Proceeds are marked for infrastructure investment and to repay debt. Interacciones led the transaction, rated AAA on a local scale.
Category: Regions
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Colombia Set for Rates Decision
Colombia’s central bank is scheduled to decide today whether to alter the 4.75% benchmark interest rate. An eventual raise in the rate is expected, but many analysts predict a hike next year rather than what would be a second consecutive increase today, in its final meeting of the year.
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EDP Stake Sale Decision Seen In Days
Portugal is expected to announce in a matter of days the winning bidder of a 21.35% stake in Energias de Portugal (EDP), and will choose from a group of potential buyers including Brazil’s Eletrobras and Cemig. A final decision is expected to be released on December 22, a spokeswoman for the Portuguese government-controlled energy company says. “At this point the process remains in the study phase,” she adds. Aside from the Brazilian utilities, Germany’s E.ON, and China’s Three Gorges have also submitted bids for a stake reportedly valued at EUR1.9bn. Last week, the Brazilian government decreed a change in the statutes of BNDES, allowing the development bank to finance Eletrobras’ bid for the EDP stake.
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Cabei Poised to Close Loan
The Central American Bank for Economic Integration (Cabei) is poised to close a $100m 3.5-year dual-currency loan this week through MLAs and bookrunners Mizuho and HSBC. The 3.5-year bullet loan is split into a $40m-equivalent yen tranche and a $60m dollar portion. Five Asian banks are heard to be participating on a loan that comes with an all-in margin of around Libor+160bp.
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BBVA Bancomer Reshuffles Top DCM Post
Ricardo Cano is heard leaving his position as BBVA Bancomer’s credit market head, with talk pointing to former UBS banker Antonio Castano as his possible replacement. Castano is currently director general of state development bank Nacional Financiera (Nafinsa) and like the bank’s recently appointed director general of global business, Alejandro Werner, he also worked at Hacienda in the early 2000s. Werner joined BBVA Bancomer earlier this year after three years as the country’s sub-secretary of finance. Castano, meanwhile, was hired by Nafin in early 2009 after working at UBS as an executive director in the LatAm DCM team and before that as deputy general director of public credit. Castano is heard leaving the government development bank on December 30, and is scheduled to commence a new role at BBVA Bancomer from January 2012. Cano started in the bank’s Mexico DCM group in 1997, and has held his current title since January.
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Fovissste Cuts Ribbon on New RMBS
Mexican government housing agency Fovissste has sold MXP4.309bn ($309.8m) in domestic inflation-linked bonds backed by mortgage loans. The 30-year UDI-denominated notes pay 4.60% and were priced at UDIbonos+283bp. The transaction was heard oversubscribed by 1.13x. Fovissste came wide to 4.50% area expectations and failed achieve the 4.45% seen on Infonavit’s MXP1.1bn 2039 issuance last week. Ixe managed Fovissste’s deal, rated AAA on a national scale. Fovissste had last sold MXP3.9bn ($317m) of UDI-denominated 2040 notes in August at 4.25%, or 296bp over UDIbonos.
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ING Sheds LatAm Jobs
ING has shed jobs across its LatAm trading, research and DCM groups as the bank moves to comply with Basel III rules and set aside money for capital requirements, says a person with knowledge of the situation. Approximately 20 odd employees are heard being let go in New York and to a lesser extend in Mexico. While the cuts are seen reflecting the diminishing importance of LatAm for the Dutch bank, ING isn’t retrenching altogether. It has kept some research, sales and some DCM people on board, including some in Brazil, and will continue to focus on local currency and interest rate products in LatAm. Its EM hard currency business, however, is being abandoned.
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Televisa Inks Spanish Equity Swap
Mexico’s Televisa has agreed to swap its 40.8% participation in Spain’s national broadcaster La Sexta for 14.5% of Spanish media holding company Imagina. The transaction will involve an equity stake swap with no money changing hands, Televisa says. Under the deal, Televisa will have the right to name 2 directors to Imagina’s 12-member board as well as participate with Imagina on joint content production projects. The deal also gives Televisa certain rights of first refusal to buy content and transmit sporting events. The transaction comes as Spain’s Antena 3 broadcaster moved to acquire La Sexta in a stock deal that would give La Sexta shareholders 7% of Antena 3, with an additional stake of up to 7% over a 5-year period subject to certain conditions. Televisa said that it will not receive Antena 3 stock given that its swap agreement contemplates surrendering its stake and rights to Imagina. A Televisa official could not immediately offer more details in terms of valuation of the assets swapped or which entities advised the companies. To advise on its own transaction, Antena 3 retained Morgan Stanley and Nomura, Deloitte and Ernst & Young as financial advisors, as well as law firms Clifford Chance and Ramon y Cajal. La Sexta hired Citigroup, KPMG and Ecija Abogados.
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El Paso Aims for 1Q Brazil Asset Sale
US gas company El Paso is expected to divest its Brazilian assets, along with the rest of its exploration and production business, by the end of the first quarter of 2012, says a person close to the transaction. Since the acquisition of El Paso by Kinder Morgan earlier this year, the pipeline company has been hawking its global E&P business in a sale that analysts estimate at $8bn. The bulk of the assets are the company’s US shale plays, but roughly 3% of the company’s total consolidated reserves, as measured in millions of cubic feet of natural gas equivalent, are located in Brazil, according to the company’s latest 10K filing. “The process is ongoing,” Bill Baerg, investor relations manager for El Paso, tells LatinFinance, referring to the sale. Baerg says the company plans to sell the bulk of its assets in one transaction but will have to seek different buyers if one single transaction is not viable. The company has retained Barclays and Evercore, the same firms that advised in Kinder Morgan’s $21.2bn acquisition of El Paso agreed in October. In Brazil, El Paso owns a 100% working interest in the offshore Pinauna and Camarao fields, a 25% stake in the Camarupim field and 35% stake in the Pescada-Arabaiana fields.
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Afores Seek Returns in EM
Mexican pension funds should be given greater freedom to diversify into growing EM economies rather than be limited to investments in sluggish developed nations, say participants at a recent Mexico-US Chamber of Commerce event in New York. Rules that emphasize foreign investments in the US and Europe make little sense at a time when such options often present more risks than opportunities. “How is it that Mexico’s [pension funds are] allowed to buy Greek debt but can’t invest in most emerging economies?” asks Alonso Cervera, managing director of emerging markets and fixed-income research at Credit Suisse. At the moment, Mexico’s pension funds can invest in 40 eligible countries, but only four of them are emerging markets, namely Brazil, Chile, India and China. Regulators are aware of the dilemma and have expressed a willingness to loosen such restrictions. “There is a huge opportunity to move money to EM economies or fast growing Asian economies,” says Pedro Ordorica, president to Mexico’s national commission for retirement savings CONSAR. “We are pushing legislators to remove one of the most challenging things for us. Perhaps in the next administration.” For now, the Afores can only allocate 20% of their portfolios in foreign assets and about 60.6% of that is invested in the US, followed by Brazil at 14%. Perhaps because of the limited options Afores have yet to reach their foreign thresholds, with just $11.5bn, or 9.63% of total assets under management, invested abroad. Of that amount, most is dedicated to foreign equity (77.2%), with 22.8% in debt. Mexican pension assets under management now stand at $119.5bn, or 11.5% of the country’s GDP.