Category: Regions

Mexican conglomerate Alfa has received a $100m commitment from Inbursa for its $600m 3-year syndicated loan, according to bankers with knowledge of the transaction. This follows on from bank meetings in New York on Tuesday and Mexico on Friday of last week. Credit Suisse and HSBC are managing the deal. It will close syndication on 7 December, and signing is expected by December 15, according to bankers with knowledge of the transaction. It is heard to be offering a spread of 300bp over Libor on a leveraged grid for its syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A banker away from the transaction described the spread as being attractive to the lender. The bank meeting on Tuesday in New York was well attended by banks from Europe and Asia, as well as from the US, according to a banker away from the deal. Alfa’s purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. BAML advised Eastman while HSBC worked on the buyside. Fitch downgraded Alfa subsidiary Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase.

A group of Vitro’s bondholders has commenced involuntary Chapter 11 cases against the Mexican glassmaker’s US subsidiaries that are guarantors of its bond debt, Vitro says. The glassmaker claims the group, calling itself the Ad Hoc Group of Vitro Noteholders, represents approximately $75m, or less than 5%, of the company’s dollar debt. The holders, however, say in a separate statement that their group now represents more than $635m (52%) of the $1.2bn debt, and that it opposes Vitro’s current restructuring plan. Vitro had launched the plan November 1, claiming it has the support of its largest creditor. The deal offered cash and new securities to holders of its $300m in 8.625% of 2012 bonds, $216m in 11.750% of 2013s and $700m in 9.125% of 2017s. The offer, expiring December 1, is intended as a step toward achieving a debt restructuring to be carried out under Mexico’s Concurso Mercantil process. Vitro said at the time of launch that creditors could expect a 68%-73% recovery. Rothschild is Vitro’s financial advisor on the process. Vitro says its operations are not affected by the bondholder group’s actions, and maintains its plan to pursue the exchange and the Concurso process. Barclays capital continues to see a heightened risk of litigation that could potentially add significant additional time to recovery, it says in a note. It recommends holders who intend to enter the exchange should consider selling instead, as current levels are roughly equivalent, in terms of time value of money, to participating in the proposed restructuring.

Grupo Bursatil Mexicano, the Mexico-based brokerage firm, will issue MXP300m in 3-year bonds on 3 December, according to the issuer. The bond is to replace outstanding debt, for the same amount, which matures at the beginning of December. The bonds will pay a spread over TIIE and have an AA rating on a national scale. Bursatil is managing the deal itself.

Railroad operator Kansas City Southern de Mexico has received acceptance from holders of $139m of its outstanding 2013 bonds and $31.6m of its 2016s, it says, as of the November 16 early deadline of a tender offer. KCSM had offered holders of the $175m outstanding 7.625% 2013s $1,040.63 per $1,000.00 principal before the November 16 early deadline and $1,010.63 after. Holders of the $150m in outstanding 12.500% 2016s were to receive $1,240.00 per $1,000.00 principal prior to November 16, and $1,210.00 after. The offer expires December 1. Bank of America Merrill Lynch is managing. KCSM has said it plans an unspecified “debt transaction” to fund the offer. Kansas City Southern is rated B1/BB.

Mexican conglomerate Alfa will close syndication for its $600m 3-year bullet facility on 7 December, and signing is expected by 15 December, according to bankers with knowledge of the transaction. It is heard to be offering a spread of 300bp over Libor on a leveraged grid for its syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A banker away from the transaction described the spread as being attractive to lender. The bank meeting on Tuesday in New York was well attended by banks from Europe and Asia, as well as from the US, according to a banker away from the deal. The bank meeting in Mexico will take place today. Credit Suisse and HSBC are the leads. Alfa’s purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. BAML advised Eastman while HSBC worked on the buyside. Fitch downgraded Alfa subsidiary Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase. On a pro-forma basis, Fitch estimates that Petrotemex’s total debt-to-Ebitda, including 12 months of Eastman assets operations, could reach 3.3x in 2010 before gradually decreasing. This compares negatively with a total debt-to-Ebitda ratio of 2.2x for the 12 months to June 30, and falls outside Fitch’s prior leverage estimate of 2.0x-2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business as it gains PET market share in North America.

Ally Credit, Fonacot and Grupo Kuo are expect to issue in the Mexican domestic market next week. Ally Credit, the auto financing company, is expected to issue a MXP1bn 1.5 year bond on 23 November at a spread of TIIE plus 150bp via Ixe and Scotia, says a banker at 1 of the leads. The bonds are rated AAA on a national scale. The use of proceeds is for automotive loans. The following day Instituto del Fondo Nacional para el Consumo de los Trabajadores (Fonacot), will issue up to MXP2.5bn in 3 year bonds. Bancomer and Scotia are bookrunners. The guidance is 40-45bp over TIIE, according to a banker at 1 of the leads. The use of proceeds is o expand its consumer loans. The bonds are rated AAA on a national scale. Grupo KUO is looking to issue MXP700m of 5 year bonds in on 25 November. Guidance is heard at between 260bp and 270bp over TIIE. The bonds have a BBB + rating on a national scale, which 1 investor says is tight, given the company’s rating. IXE is the bookrunner on the deal. Proceeds will be used to refinance liabilities and for other corporate purposes. KUO has holdings in the consumer goods, chemical and automotive industries.

CFE has delayed its MXP10bn 4-year floating and 10-year fixed rate bond until 1 December, according to a banker on the deal. Banamex, BBVA Bancomer and ING are bookrunners on the deal. The bonds are rated AAA on a national scale. The transaction had been planned for mid November, but the issuer decided to delay the offer to await a less crowded market, adds the banker. The transaction is the first in a new program. Investors still expect the Mexican electricity authority to price at 30bp over TIIE for the 4-year and 120bp-130bp over Mbonos for the fixed tranche. The use of proceeds is for general financing purposes. It is also issuing a MXP450m 2 years 8 months bond, in a re-opening of a previous bond issue, as part of previous shelf. The bond will be issued via Ixe and Banamex. The bonds are rated AAA on a national scale.