Mexico’s BBVA Bancomer will today look to issue up to MXP5bn in 3 year bonds, according to investors. The self-led deal is rated AAA on a national scale. Investors expect the bonds to price at between 25bp and 35bp over TIIE. BBVA is sole lead.
Category: Regions
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Trinidad Bank to Meet Buyside
First Citizens is set to meet fixed income investors. The second largest bank in Trinidad, which also operates in Barbados and St. Lucia, is visiting the US and Europe Friday through Tuesday. Though the meetings have been set up as “non-deal,” a Moody’s report suggests the bank seeks to raise $200m at a maturity yet to be defined. JPMorgan is managing the process. The BBB+/A2 bank has a $100m 2011 bond due in February. Its most recent bond deal was a $100m 2012 sold in 2005 through Bear Stearns, according to Dealogic.
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Pemex Mulls Colombia, Chile Bonds
Mexican state oil producer Pemex is considering an array of currencies for its next bond issuance, including debuts in LatAm local currencies, Mauricio Alazraki, MD of finance and treasury, tells LatinFinance. “We could issue in euros, pounds sterling or dollars,” he says. “Chilean or Colombian pesos are also an option. As these markets are closer it is easier for investors there to understand Pemex than say for example Australian investors,” he adds. Bonds in CLP or COP would mark a debut for the quasi sovereigns in a LatAm local market other than MXP. Pemex did a lot of pre-funding in 2010, so in 2011 it will only have to raise $2bn-$3bn this year. In Q2 or Q3, Pemex will look to do a plain vanilla bond issue for between $1bn and $2bn, according to Alazraki. He adds that it will not be necessary to pre-fund 2012. In 2011 Pemex will look to issue between MXP15bn and MXP20bn in Mexican local markets. Around 17% of Pemex’s debt is bank debt, excluding ECAs, and around $3.3bn of bank debt is maturing in 2011. “In May a syndicated loan for $1.5bn is expiring so we could go to the bank market, it could prove very attractive,” says Alazraki. “However, the tenor with bank debt is not that attractive. We may do a small syndicate, or a club deal or bilateral loans totaling around $1bn,” says the official. He adds that potential banks for bookrunners would be those with a strong local presence, and the loan could be in dollars or Mexican pesos.
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IMF Ups 2011 LatAm Growth Outlook
The IMF has lifted its forecast for growth in LatAm and the Caribbean to 4.3% this year, from a 4.0% prediction made in October. It has meanwhile trimmed the 2012 outlook by 0.1% to 4.1% regional expansion. The region grew by 5.9% last year, following a 1.8% dip in 2009. “In many emerging economies, activity remains buoyant, inflation pressures are emerging, and there are now some signs of overheating, driven in part by strong capital inflows,” says the fund. In its latest World Economic Outlook update, the IMF revises upwards its global output target to 4.5% expansion in 2011, about 0.25% more than what it was predicting last year.
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Vena Resources Plans Share Issue, Spin-off
Toronto-listed miner Vena Resources, which operates in Peru, says it is planning to issue units at CAD0.50 each and sell them via a private placement, with each unit consisting of a common share and half a common share purchase warrant. Each warrant will entitle the holder to purchase 1.00 common share of the company at a price of CAD0.75 per warrant share. Vena has not determined how much money it intends to raise. Canadian investment bank M Partners and Celfin’s Peru office are handling the issue. A banker at Celfin says a roadshow has begun and will probably end within the next 3 weeks. Institutional investors in Chile, Peru, Colombia and abroad are being contacted, he says. The amount of units and funds Vena finally decides to raise depends on investor demand, the banker says. Ricardo Carrion, MD for capital markets at Peru-based Kallpa Securities, says that Vena’s most advanced project, the Azulcocha zinc project, will require between $15-$30m to bring to production. Separately, Vena has announced that it is reviewing strategic options for the 75% stake it holds in its uranium subsidiary Minergia, including a spin-off. A study Kallpa performed in 2010 valued Minergia at around $18m, Carrion says, noting that the value may have increased as uranium prices have appreciated. Website UXC.com, which tracks uranium prices, says the price per pound of uranium, priced at $68 per pound on January 25, is up 70% since June. Carrion believes a spin-off would be positive for Vena, as investors are seeking to invest in specific commodities rather than in a company that exposes them to a combination. He predicts that this could become a trend among companies that mine different metals. Among companies in Peru that could explore spinning off units to unlock their full value, he says, is Zincore Metals. “The company’s focus is zinc, but about a year ago they found copper deposits in one of their properties. it would make sense for them to spin the copper deposits into a separat
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Mexico Readies Local Bond Syndication
Mexico has begun meetings with investors ahead of a new 6.5% 2021 syndicated bond sale, the finance ministry says. It does not give the exact pricing date or the size of the offering, noting only that it will be in Q1 and be reopened at primary auctions beginning in Q2. Last year, Mexico sold MXP60bn at 5, 10 and 30-year maturities during 2010, kicking off with a MXP25bn 10-year in February. It introduced the syndication formant with that sale in order to give its local benchmarks instant liquidity and index eligibility, as well as broaden the investor base. Santander, BBVA Bancomer, HSBC and Banamex are managing the sale.
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ICA to Price Perp Friday
Mexico’s ICA is expected to price a $300m-$400m perpetual bond Friday, according to a person with knowledge of the transaction. A price around 9% is the target, he adds. The bonds are callable in 5 years and rated Ba3/BB minus. BAML, Morgan Stanley and Santander are leads on the deal, which is being roadshowed in New York, Boston, Singapore, Hong Kong, Switzerland and London this week, ending Thursday.
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Mexico ABS Seen Picking Up
Mexico’s securitization market is set to have a good year, as the Mexican economy stabilizes, according to S&P. However, any potential financial uncertainty could dissuade investment in new issuance. “Overall 2011’s structured debt issuance will be similar to 2010,” it says. Issuance in 2010 was $8.7bn equivalent. Mexican structured finance issuance in 2010 was made up of 34% RMBS, 22% ABS, 36% future flows, 4% synthetics and 4% partial credit guarantees. The issuance and performance of ABS is expected to remain strong. “For auto loans, trade receivables, and consumer loan transactions, we don’t anticipate any ratings actions in the short term (6 to 12 months),” says S&P. Issuance activity of synthetics and PCGs is expected to be similar in 2011 compared to 2010, with transactions adding up to $166.8m. S&P expects Infonavit and Fovissste to continue to issue large amounts of RMBS. In 2010, 9 transactions of loans originated exclusively by Fovissste and Infonavit were rated, with the total number of RMBS declining 24% since 2009. The construction sector is expected to continue to face challenges, as in 2009 and 2010, and as a result so are construction loan securitizations. During 2010 S&P withdrew 11 ratings, and downgraded 6 because they failed to pay back principal on time. Securitization of new assets, such as guaranteed consumer loans and microloans are also expected this year. The agency adds that it anticipates new participants in the market and fewer negative ratings actions. In total, considering all types of issuance, S&P downgraded 45 series and affirmed 35 ratings during 2010.
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Gruma to Shed Banorte Stake
Mexico’s Gruma plans to sell most of its 8.8% stake in Banorte, it says. The tortilla maker plans to sell up 141.9m shares in the bank in the US, Mexico and other markets, with the option of a 14.2m greenshoe. Based on Monday’s MXP54.82 closing price, Gruma would raise up to MXP8.55bn. Books are set to close February 9, with pricing announced February 10. The shares to be offered represent 7.7% of Banorte, lowering Gruma’s holding to 1.1% from 8.8%. Banorte, BBVA Bancomer, Morgan Stanley and UBS are managing the sale.
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Penoles Denies Fresnillo Sale Rumors
Penoles has denied rumors it is considering a sale of its Fresnillo subsidiary. According to a statement on the Mexican bolsa, the Mexican mining company says neither the parent nor subsidiary is for sale.