Mexico’s IGS has raised MXP1.80bn ($78m) in the certificado de capital de desarrollo (CCD) market, splitting the transaction into 2 separate CCDs to accommodate different investors’ interest in different projects. In what is a first for Mexico’s young CCD asset class, the real estate investor is issuing MXP575m in a 2021 CCD that will be more focused on industrial real estate assets, and MXP513m in a second to be more focused on residential investment. “Late in the process we had an impasse. Some Afores wanted more of one asset than the other, so we decided to make 2 CCDs,” Antonio Ruiz Galindo, CEO of IGS, tells LatinFinance. He explains that a good deal of the investments will still go to both CCDs. The CCD funds will account for part of a larger pool that is made up of 47% private investor cash and about 5% IGS’ own capital, to invest in residential, commercial and industrial real estate projects in Mexico. The industrial investments will be sale-leasebacks on existing properties, while the residential assets will be land to be used for low-income housing supported by government Infonavit and Fovissste. The commercial investment comes from a deal with Homex to develop the commercial spaces within the low-income residential developments. As much of the pipeline is ready, Ruiz says he expects 30% of the fund to be invested within 6-8 months. In a structure typical of CCDs, investors earn a return to repay their invested capital plus a preferred return, in this case 12%, with further proceeds divided 80% for investors and 20% for the manager. IGS expects overall returns of 18% for the industrial investments, 20% for commercial investments and 22% for residential investments, according to the prospectus. ING managed the sale, the first CCD placed since April. Bankers are hopeful that issuance will again pick up, noting the pause was mostly due to discussion with Afores regarding funding CCDs via capital calls, rather than the problems in the public equity markets. Se
Category: Regions
Inbursa Looking at MXP Issue
Mexico’s Banco Inbursa is keeping a close eye on the domestic bond market, to issue up to MXP6bn ($434m). It originally had plans to issue the 5-year floating rate bonds September 28. Banamex, Bank of America Merrill Lynch, and Inbursa are managing the transaction. The Carlos Slim-controlled financial group last visited the domestic market in July, when it priced MXP4.9bn 2014 bonds at TIIE+20bp, through Actinver, Bank of America Merrill Lynch, Inbursa, and Santander.
OSX Nears Finish Line
Five banks are heard signing up for OSX’s $850m loan to finance the construction of a floating production storage and offloading (FPSO) vessel OSX-2 in Singapore. The transaction is expected to close in October and is being led by ING, Itau and Santander. The loan has a 12-year final maturity with a 7-year average life, offering a margin L+425bp pre-construction and +410bp thereafter. Including the bookrunners, the deal now has 8 banks in total. This comes despite difficulties earlier this year when some banks were heard giving the transaction a wide berth amid euro-zone worries and higher funding costs. Bankers also expressed concerns over how the company, controlled by Brazilian magnate Eike Batista, lacked a track record. Against this backdrop, leads were forced to flex pricing up to L+425bp from 375bp pre-construction and to +400bp from 360bp thereafter.
Acciona Concesiones Eyes State Projects
Mexico’s Acciona Concesiones is looking to participate in several infrastructure projects in the Mexican states of Guerrero, Chiapas and Yucatan, said Sergio Suarez Morales, the company’s director of operations at Spanish infrastructure firm Acciona Concesiones. “We are working with the governments to structure the deals, but everything is still preliminary at this point,” he said. Acciona is looking to invest in long-term social infrastructure such as road and tunnel projects and is actively competing to participate in the office building space. Acciona Concesiones currently manages concessions for the Hospital Regional de Alta Especialidad del Bajio and the Universidad Politecnica in San Luis Potosi, both of which are operated under a public-private partnership scheme. Morales was speaking on the sidelines of the LatinFinance Infrastructure and Sub-Sovereign Finance in Mexico Summit held last week in Cancun.
Arca Continental Poised to Issue MXP
Arca Continental plans to issue up to MXP3bn ($214m) in the domestic market next week if market conditions permit, according to a banker on the deal. The Mexican bottler plans to issue a 5-year floating rate note and a 10-year fixed rate bond. BBVA Bancomer, Bank of America Merrill Lynch and HSBC are leads on the transaction, rated AAA on a local scale. The issuer last came to the Mexican domestic market in November 2010, when it priced a MXP3.5bn fixed and floating rate deal via HSBC.
Mabe Loses Investment Grade
S&P has lowered the credit rating of Mexican white goods manufacturer Controladora Mabe to BB+ from BBB minus, citing deteriorating credit metrics. “Its financial performance has deteriorated, mainly because of the significant decline in profits from Venezuela, a change in the company’s US exports to a product mix of lower-end products, and a slower-than-expected turnaround of a Brazilian subsidiary,” the agency says. Higher commodity prices, higher marketing expenses and slower global economic growth also hurt Mabe’s prospects. The outlook is stable.
Mexico Lacks Infrastructure Projects; Investor Says
The Mexican government is failing to provide a sufficient number of solid, long-term infrastructure projects to satisfy demand from investors looking to participate in public-private partnerships, said Alfonso Navarro, director at Spanish infrastructure firm Acciona Concesiones. This is an interesting twist to the Mexican infrastructure story which last year was lamenting the dearth of investors involved in this sector. Mexico has seen a rise in private investment in the communications, energy, water, health, education and security sectors over the last decade, but there are still not enough projects for the amount of available funding. “There is no uncertainty from the investor, but the Mexican government has been slow to make decisions. What used to take a month now takes three months,” added Navarro. According to RBS, the Mexican government plans to spend $201bn on infrastructure between 2009-2014. Navarro was speaking on the sidelines of LatinFinance’s Infrastructure and Sub-Sovereign Finance Summit in Cancun over the weekend.
Copec Targets all of Colombian SIE
Compania de Petroleos de Chile (Copec) plans to launch a public takeover bid for the 47.21% of Colombian energy investment company Sociedad de Inversiones en Energia (SIE) that it doesn’t own. The fuel distributor is offering COP12,700 per share for the 87.02m shares, meaning a COP1.105trn ($568m) purchase if all holders accept. The per share price matches what Copec paid Corficolombiana for a 7.85% stake last month, and represents a 0.32% premium to Monday’s COP12,660 closing price. The illiquid stock has risen 7.47% since the previous trading session on September 8. Copec says it has secured a $315m standby facility with JPMorgan to use in the transaction. The offer period is from October 10 to October 24. In September, Copec spent COP183bn on Corficolombiana’s stake, in a transaction following the 2010 purchase of Colombian fuel distributor Terpel.
Ideal Plans MXP Foray
Mexico’s Impulsora del Desarrollo y El Empleo en America Latina (Ideal) is preparing a domestic bond transaction. The Carlos Slim infrastructure vehicle is aiming for a MXP4bn ($288m) 2014 bond paying a spread over TIIE. The regulatory filings indicate an expected October 20 pricing. Inbursa is listed as the only lead at this point, though Slim companies usually add additional banks at a later date. The sale is not yet rated. Ideal had planned to raise MXP6.14bn in July through an equity follow-on via Banamex and Inbursa, but market conditions appear to have delayed this process, along with all other new issuance in the Mexican pipeline.
KCSM Amends and Extends
Transportation company Kansas City Southern de Mexico has amended and restated a $100m loan due 2013 by securing a $200m credit facility that expires 2016. JP Morgan and Bank of America Merrill Lynch, acted as joint lead arrangers. Those two banks along with BBVA also acted as joint bookrunners, while RBS, Citibank, Comerica Bank, Wells Fargo and Scotia Capital came in as lenders.