Mexican mortgage and social services entity Infonavit plans to sell an up to MXP1.1bn ($82m) UDI-denominated RMBS in the domestic market this week. The 28-year security will be backed by Infonavit mortgages targeted at middle and high income borrowers. Pricing is scheduled for December 7. While official guidance has yet to be released, the issuer is heard considering an interest rate in the 4.5%-5% range. “This is a preliminary forecast as pricing is dependent on how the market is at the moment,” notes a person familiar with the transaction. Proceeds will be used to create new mortgages. Banamex is managing the sale, rated AAA on a local scale.
Category: Regions
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Mexico Holds Rates
Mexico’s central bank has left the benchmark interest rate unchanged at 4.5%. The bank based its decision on positive signs regarding domestic productivity and inflation, along with a continuing deterioration in the global economy, it says. “With respect to growth, Banxico discounts the fact that domestic aggregate demand has been improving recently,” say analysts at Nomura Securities. “In fact, it describes the balance of risks for growth as worse than before. Clearly, Banxico seems to be focusing on the downward revisions to Europe’s growth outlook, which is headed for a recession, and on the lower forecasts for the US economy by the Fed.”
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Banco de Bogota Preps Possible Take-Out
Banco de Bogota, Colombia’s second largest lender, will kick off global investor meetings in the US, Europe and Latin America this week. The debut borrower will see accounts in London and Santiago Tuesday, Boston and Lima Wednesday before wrapping up in New York and LA Thursday. Citi, HSBC and JPMorgan are leading the potential 144A/RegS transaction, rated Baa2. Banco de Bogota secured a $1.2bn 1-year bridge through those financial institutions to help it acquire BAC-Credomatic, a sizeable Central American bank that represents half of Banco de Bogota’s assets. Banco de Bogota’s CFO Maria Luisa Rojas Giraldo told LatinFinance in September the bank was looking at a $1bn 10-year bond to replace the bridge loan. Last month the bank was sounding the market with a $500m 3-year loan carrying a margin of Libor plus 225bp. The same banks were leading the loan transaction.
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VW Bank Prices MXP Debut
Mexico’s Volkswagen Bank has raised MXP 1bn ($71m) in a domestic bond debut, pricing a 3-year floater at TIIE + 50bp. Private banking accounts and mutual funds mostly participated, allowing the issuer to see 1.4 x demand. VW’s pricing is being compared to Daimler, which in September, priced a MXP1bn 3-year bond at TIIE+50bp. The car manufacturer then saw demand reach 1.4x and also priced against talk of TIIE + 40-50bp. “Despite volatility in the market, pricing shows there is liquidity in Mexico,” says in banker familiar. VW has a MXP7bn program, and is expected to become a frequent issuer going forward. The bonds, rated AAA on a national scale, will be guaranteed by parent Volkswagen Financial Services. HSBC and Santander managed the transaction.
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Peru’s BCP Strikes Deal with Colombian Brokerage
Banco de Credito del Peru has agreed to pay $76m for a 51% stake in Colombian brokerage Correval. Under the deal, Correval was estimated to have an enterprise value of $150m, Correval spokesman Mario Alejandro Nieto tells LatinFinance. Nieto says that Correval which was advised by JP Morgan, conducted a year-long negotiation process that finally reached fruition this week. Nieto could not offer any details on the valuation or whether the transaction was paid for fully in cash. BCP officials could not be reached for more details. Credicorp, the owner of BCP, said in a statement that MILA, the integrated market created between Peru, Chile and Colombia has prompted the financial institution to look for opportunities beyond its borders.
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Infonacot Prices MXP Securitization
Mexican state-run lender Instituto Fonacot has issued MXP1.665bn ($122m) in 3-year bonds. The transaction was 2.23x oversubscribed and priced at TIIE+65bp after generating some MXP3.6bn in demand. Scotia and BBVA Bancomer managed the transaction, rated AAA on a local scale. Infonacot last visited the local market in 2010, paying TIIE+39bp on a 3-year bond, via the same leads.
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Pemex Sees GDN Success
Mexico’s Pemex generated sufficient demand Thursday to double its targeted MXP5bn size to sell MXP10bn ($734m) in a debut 10-year global depository note (GDNs), marking the first corporate to issue under this format. With both foreign and local accounts tugging at leads sleeves, the borrower was not only able to price in line with its local curve, but come at a much larger size than it would typically achieve in the domestic market. “The big question was whether the bonds were going to come wider than the local certificados bursatiles, (but). the M+135bp seems to be line with local pricing,” says a rival banker. The government controlled oil company issued the maximum authorized, pricing the notes at par to yield 7.65% or Mbonos+135bp, in line with MBonos+135bp-140bp guidance. At least 60-70% of participation came from foreign investors who generated about MXP5bn in demand, with another MXP8bn coming from locals. “The structure makes a lot of sense,” says the banker. “You combine both investor bases, locals and foreigners, and get the ability to issue in size at no extra costs. It would be difficult to do MXN10bn 10-year in a pure local bond.” Citigroup is serving as depository bank for the local Mexican transaction, rated AAA on a local scale. Settlement is scheduled for December 7. HSBC, Morgan Stanley and Santander managed the sale.
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ISA Taps Domestic Market
Colombia’s ISA has sold COP300bn ($153.8m) in local IPC-linked bonds. A 12-year pays 4.47% and a 30-year 4.84%. The sale saw demand of nearly COP777bn. Citi, Corredores Asociados, Correval and Interbolsa managed the deal, rated AAA on a national scale.
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Petrobras Gives PDVSA More Time on $13bn JV
Brazilian oil company Petrobras has agreed to extend its deadline for Venezuela’s state oil company PDVSA to finalize its 40% participation in the Abreu e Lima refinery in Pernambuco. The $13bn energy joint venture has often served as a gauge of the strength of relations between the two countries. PDVSA has 60 days starting from December 1 to obtain the required loan guarantees for its share of the project from Brazil’s BNDES, a Petrobras spokesman tells LatinFinance. Under the terms of the deal signed in March 2008, PDVSA would take 40% stake and become a main crude supplier for the plant. The total investment was originally estimated at $4bn but this figure is now estimated at $13.36bn, the spokesman says. The refinery is expected to process Venezuelan heavy crude and to begin processing 230,000 barrels a day in December 2012, based on Petrobras’ estimates. The deal has often become fodder for political controversy on both sides of the deal. President Hugo Chavez has often publicly complained about the slow pace of the transaction, blaming Petrobras executives and at one point denouncing the loan guarantees as unnecessary.
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Luxottica Buys Brazilian Eyewear Maker
Italian luxury eyewear company Luxottica is moving to buy Brazilian eyewear company Grupo Tecnol, in a deal that gives it a foothold in a growing market. The company, which sells top brands such as Persol, Oliver Peoples and Ray Ban eyewear, will initially buy an 80% stake in Tecnol, with the remaining 20% to be acquired over a period of 4 years at pre-determined prices. The company estimates Tecnol’s enterprise value at EUR110m ($148.1m), but Luxottica officials declined to give additional information about the actual amount of the transaction, its valuation metrics or the advisors involved. The deal is expected to close in early 2012. Brazil’s growing middle class is an attractive client base for luxury brands and the primary reason for Luxottica’s foray into that market. Luxottica estimates that the South American country could soon become one of the top five markets for its wholesale division. Tecnol is a leader in the Brazilian eyewear business with net sales that reached the equivalent of EUR90m ($121.2m) in 2010, a compound growth rate of 14%.