An October 7 daily brief entitled “Mexico Reported on Yen Road” incorrectly identifies one of the managers on an upcoming Mexican bond transaction. Mitsubishi UFJ Morgan Stanley is one of three managers.
Category: Regions
Posted inDaily Brief
Davivienda Issues Local Bonds
Colombian bank Davivienda issued COP500bn ($208m) in local bonds in 4 series. A COP91.6bn 2-year tranche pays 1.10% over IBR, a COP92.3bn piece pays 1.31% over IBR, a 5-year COP120.2bn pays 3.14% over IPC, and a 7-year COP196.1bn tranche pays 3.63% over IPC. Total demand for the AAA rated notes soared to 3.1x the amount offered, says a banker away from the deal. Davivalores, the bank’s brokerage, managed the sale.
Posted inDaily Brief
Ixe Cancels Mexicana Flight
Ixe does not plan to continue in Grupo Mexicana de Aviacion’s restructuring process, it says. The bank had previously said it was considering a small stake in the airline, if it was able to successfully reorganize its finances and resume operations. Bankrupt Mexicana stopped operations earlier this year, with holdco Tenedora K, a company formed by Mexico’s Grupo Industrial Omega and Grupo Arizan, buying control from owners including Ixe.
Posted inDaily Brief
Mexican Gym Winded on First Day
Grupo Sports World traded down 1.5% to MXP15.75, the day after pricing 53.6m shares at MXP16.00 to raise MXP857m.The Mexican bolsa dropped 0.33% on the day. The Mexican health club chain formerly owned by private equity fund Nexxus Capital says 1,657 investors bought the deal, 54% of them institutional. The deal represents a 61% float and Sports World claims it is the first pure fitness company to publicly trade in LatAm. The exit represents the third stock market exit for Nexxus, which keeps about a 20% stake, and will “maintain a significant influence in the company,” Sports World says.
Posted inDaily Brief
Volkswagen Leasing Taps Mexican Market
Volkswagen Leasing on Wednesday issued MXP1.5bn in 4-year bonds, after receiving an order book that was 5x oversubscribed, according to a banker on the deal. “There is deep demand in the market for this tenor, and the transaction also shows that appetite has returned for bonds issued from this sector,” says the banker. The leasing unit of Volkswagen’s Mexico operations will pay a spread of 60bp over TIIE, the low end of 60bp-65bp guidance. Banamex and ING were joint leads on the deal, rated AAA on a national scale. Proceeds will be used to finance lending.
Posted inDaily Brief
Peru Surprises With No Change
Contrary to market expectations, Peru’s central bank left its monetary policy rate unchanged at 3.00%, citing a small drop in inflation. Morgan Stanley forecast it would tighten by 25bp to 3.25%, a lower hike than the 50bp increase seen in August and September, due to low inflation, which is around 2.0%. Barclays also expected a 25bp hike, with the rate ending at 3.5% by the end of the year. Bank of America Merrill Lynch expected the bank to continue the trend with a 50bp hike.
Posted inDaily Brief
Brazil’s Talent Group Sells to Publicis
France’s Publicis Groupe says it will acquire a 49% stake in Brazilian advertising agency the Talent Group. Publicis also received options that could lead to a majority stake in the future. According to press reports, the $110m deal implies a $220m valuation for the EUR50m revenue company.
Posted inDaily Brief
Conduit Capital Investing In Mexico
NY-based private equity firm Conduit Capital plans to invest about $100m to build 2 hydroelectric plants in Mexico, say sources close to the shop. One of the projects, Cerro de Oro, will generate about 14MW and the other, Veracruz, will generate about 30MW. Construction should be completed in about 2 years. About half of the funds will come in the form of equity and the rest from bank financing. Conduit is already in talks with several banks, the sources say without disclosing names. The equity portion will come from the Latin Power III fund and Asergen, Conduit’s partner in the projects. The firm, which has plans to open an office in Mexico, is also seeking to invest in wind projects, but no specific plans have been revealed.
Posted inDaily Brief
DF to Fund MXP38bn Subway Expansion
Mexico City’s Sistema de Transporte Colectivo (STC) expects to approach financial markets to help fund part of a MXP38bn expansion of its metro. Construction and development of the city’s new subway line, Linea 12, will consist of 2 separate funding packages, STC’s finance director Miguel Angel Avila tells LatinFinance. The first, which is estimated to come in at around MXP20bn, will finance construction and development of the line’s basic infrastructure. It will use a mixed financing structure funded by city and federal taxes. The second package – to build the trains, buy service equipment and maintain the safety and efficacy of the line – is expected to cost some MXP18bn over the next 17 years. Distrito Federal will issue a dual tranche 4-year 8 month and 9-year 8 month deal next week, via Deutsche, for up to MXP2bn. The funds are slated for infrastructure spending, at least part of which will go toward Linea 12 construction, according to a banker at Deutsche.
Posted inDaily Brief
Ixe Preps Hybrid Bond
Mexico’s Ixe is preparing to issue $120m in 10-year junior subordinated bonds, according to Fitch, which assigns a B+ rating. Goldman Sachs is heard managing the new bond sale, of which the timing is unclear. The bank’s only previous dollar bond, according to Dealogic, was a $120m 9.75% perpetual bond in 2007, managed by Goldman. “Ixe has adequately faced the tough recent operating environment by maintaining good asset quality, sound capital levels and ample liquidity despite continued growth in overall business volume,” Fitch says, noting also relatively limited loss absorption capacity, high borrower and risk concentrations and challenges associated to rapid loan growth and business diversification. Ixe and larger Mexican bank Banorte have been the subject of rumors this week regarding a merger or sale to Banorte.