Mexico-based private equity shop Nexxus Capital has made its first closing of $70m on its Nexxus V fund, says director Roberto Terrazas. He expects to raise an additional $50m-$70m before a final closing in March. Fundraising efforts are targeting international institutional investors, Terrazas says. A previous fund, the Nexxus IV CCD trust, closed with $220m in October. Nexxus’ funds acquire minority or majority stakes in Mexican mid-market companies.
Category: Regions
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Ecuador Upgraded by Moody’s
Moody’s has upgraded Ecuador’s ratings to Caa2 from Caa3. The outlook is stable. “Ecuador should be able to secure sufficient financial support from China, the Andean Development Corporation and the Inter-American Development Bank and to access local funding from the Ecuadorian Social Security Institute to cover most of its funding needs,” the agency says. It adds that Ecuador’s government has expressed a commitment to honor its $650m global 2015 bonds.
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Mexico Prices MXP25bn Bond
Mexico has received over MX60bn in demand for the MXP25bn 6.50% 2021 syndicated bond it issued on Tuesday, according to bankers on the deal. The 6.50% coupon priced at 92.39 to yield 7.44%. Almost half the demand came from Afores, with insurance companies, banks and private banks also participating. Alejandro Diaz de Leon, head of public credit for Mexico’s Hacienda, says he is satisfied with where the bond priced, given recent market volatility. Given the volatility in the market recently it was tighter than last year’s 10 year bond in February of last year. HSBC, Santander, BBVA Bancomer and Banamex are joint bookrunners on the deal. Last year, Mexico sold MXP60bn at 5, 10 and 30-year maturities, kicking off with a MXP25bn 10-year in February.
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ICA 10-Year Prices in Line
ICA, the Mexican infrastructure construction company, raised $400m in a 10-year NC5 yesterday. The 8.900% coupon priced at 98.545 to yield 9.125%, in-line with guidance in the low 9 area. The offering had a book of close to $800m, according to a banker on the deal. ICA had originally been heard going out with a perp, but changed tack after receiving a tepid response. A New York-based EM-investor says the market had been comparing ICA to Cemex, as both are considered plays for Mexican construction. But ICA had been expected to price through Cemex, since it is considered a stronger credit. Cemex has a 2020 trading at around 8.50 – 8.70. “I think they shot themselves in the foot a bit with the failed perp,” the investor says. Another New York-based investor who passed on the deal says ICA’s high leverage made the issue less compelling. BAML, Morgan Stanley and Santander are leads on the deal. ICA is rated Ba3/BB minus. Proceeds will be used to repay outstanding secured debt and general corporate purposes.
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BNP Opening Colombia Bank in April
BNP Paribas plans to officially open a bank in Colombia in April, the French bank’s head of LatAm Louis Bazire tells LatinFinance. A banking license is required to trade the Colombian peso, which BNP will do along with offering FX swaps and derivatives. BNP will use the opening to sound out a possible strategy for lending to local companies in pesos. Bazire says BNP will need to have confidence in the currency before considering lending long term in pesos. He adds that Colombia is a good investment opportunity and does not view it as overbanked. “Our timing is good,” says Bazire. BNP already has 40 people in its Colombia rep office. It offers wholesale finance and specialized retail products like consumer credit and insurance. The Colombia bank is part of a number of regional initiatives planned for this year. “We’re growing our platform everywhere,” says the senior banker. Bazire says BNP plans to open a Brazil equity brokerage as a stepping stone towards a primary equity business. And in Mexico, the bank is starting a Sofom to gain access to the peso market. Bazire notes that LatAm and Asia are the fastest growing parts of the bank, though he concedes that the region still yields just 3% of global revenue. BNP aims to double LatAm revenue by 2013, says the banker.
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America Movil Launches Exchange Offer
Mexico-based America Movil has put out an exchange offer for almost $1.3bn of Telmex notes, it says in a filing on the Mexican stock exchange. It is offering to swap $798.4m of outstanding Telmex 5.50% senior notes, due 2015, for new America Movil 5.75% senior notes due 2015. It is offering holders $980.69 in new bonds per $1,000.00 principal, if they accept before the March 3 early deadline, and $950.69 after that. It is also offering to buy back $500m of outstanding Telmex 5.5% senior notes due 2019 in exchange for 5.0% senior notes due 2020. It is offering holders $1,018.33 per $1,000.00 principal, if they accept before the March 3 early deadline, and $988.33 after that. The new America Movil notes will be guaranteed by America Movil’s subsidiary, Radiomovil Dipsa, known as Telcel.
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Colombia Rates Kept at 3.0%
Colombia’s central bank kept its rate unchanged at 3.00%, in line with market expectations. It says that inflation, at 3.17%, while higher than expected, is still in the middle of the target range. Celfin says inflation spiked in December and that January may see similar numbers. But Celfin says the jump in inflation is being caused by supply side factors that would not be affected by a rate increase. Morgan Stanley says that stable but modest growth and a strengthening currency should keep inflation at bay and allow the central bank to remain on hold through the year.
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Mexico to Price Local Bond Today
Mexico is expected to issue a new 6.5% 2021 syndicated bond today, according to bankers on the deal. The bond sale is expected to be for up to MXP25bn, say market participants. HSBC, Santander, BBVA Bancomer and Banamex are joint bookrunners on the deal. Last year, Mexico sold MXP60bn at 5, 10 and 30-year maturities, kicking off with a MXP25bn 10-year in February.
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Bimbo Looks to Issue Dollar Bond
Mexico’s Bimbo will look to issue $500m-$750m in 7-year or 10-year bonds this year, with a deal potentially happening in Q2, the baker’s corporate treasurer Roberto Cejudo Pascual, tells LatinFinance. “Proceeds of this potential transaction will be used for refinancing purposes and to re-pay the revolver facility we could use for the Sara Lee acquisition once this acquisition gets clearance from the authorities,” says the CFO. “We will use the credit lines from the fully committed $750m credit facility we took out in June 2010 and balance sheet to buy the Sara Lee assets in case the acquisition materializes, and then use the potential upcoming bond issue to re-pay this,” adds Cejudo. Cejudo adds that issuing bonds in dollars will help to broaden the investor base and will help match the future dollar-denominated cashflows. Banks have not yet been assigned as bookrunners for the bond issue. Cejudo adds that Bimbo is also considering taking out a syndicated loan for the same purpose, but this will probably not happen until late this year. Grupo Bimbo announced that it would acquire the US bakery assets of Sara Lee for $959m in November.
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Colombia Rates Seen on Hold
Colombia’s central bank is expected to keep its monetary policy rate at 3.00% today. Bank of America Merrill Lynch says the rate will stay on hold as recent COP depreciation has lessened the probability of another rate cut, although well-contained inflation expectations provide room to do so. Barlcays agrees, but says that it expects increasing disagreement at the central bank regarding the beginning of the normalization cycle.