Category: Regions

Moody’s has assigned a Ba3 rating to Elementia’s proposed MXP3bn senior unsecured 2015 notes and a Ba3 corporate family rating to Elementia with a stable outlook. The company manufactures semi-finished copper, aluminum products, fiber cement and concrete products mainly in Mexico and also in Central and South America, The proceeds of the issuance are expected to refinance about half of the debt from any existing $450m 5-year term loan. The ratings rationale is that the company has a solid market position, is in several markets and has modest financial leverage. It also has solid profit margins and expected stable earnings, says Moody’s. However, it adds that the company has a limited operating scale and business diversification and is also exposed to base metal cycles.

Mexico’s Grupo Interraciones, which specializes in sub-national and public infrastructure financing in Mexico, is looking to issue $2bn equivalent of covered bonds in local and international markets, and $280m of subordinated debt in the next 4 years, Gerardo Salazar, CEO of the bank tells LatinFinance. Banco Interacciones is looking to do 3 bond issues a year over this period. The bank is looking to issue the first covered bond before the end of 2010 for MXP3.5bn. It is eyeing maturities of 10-15 years. The deal will be the first covered bond to be issued in Mexico, says Salazar. International markets the bank would look at for further bond issuances are the UK and US. “Mexico is offering attractive yields, long term investments and has stable financial markets,” says Salazar. “We expect to be able to attract institutional investors, including insurance companies, local and international pension funds and mutual funds to our bond issues,” he adds. Salazar says 85% of Interacciones’ assets are in government debt. Nacional Financiera is structuring the deal.

Scotiabank, Banco Inbursa and Banco Compartamos, as well as the government of DF are all looking to issue bonds in Mexico’s domestic market this week. Scotiabank aims to issue up to MXP3.5bn in a dual tranche 5-year and 7-year. The self-led deal is rated AAA on a national scale. The bonds are being issued to refinance MXP2bn that was due in September, MXP700m maturing in November and MXP800m due in December, according to investors. Both tranches will pay a spread over TIIE. Elsewhere, Inbursa is set to auction up to MXP5bn 3-year bonds. The transaction is self-led, joint with BBVA Bancomer and is rated AAA on a national scale. The bonds will pay a spread over TIIE, expected at around 20bp, according to investors. The deal follows on from the bank’s August bond issue, its first since it was set up in 1993. The bank issued MXN5bn in 5-year paper, which paid a spread of TIIE plus 24bp. Meanwhile, Compartamos, the microfinancing bank that lends only to women, will issue 4-year bonds. Price talk is at 125bp-135bp, refined from an earlier 130bp-140bp over TIIE, say investors. The deal is rated AA minus on a national scale. BBVA Bancomer is bookrunner. Compartamos is the only deal considered attractive by Afores, because of the spread offered. “The other bank paper will only price in the low-to-mid-double digits, and this is mostly bought by other bank treasuries, so this is not attractive to the Afores,” says one investor. The government of the Distrito Federal will also issue a dual tranche deal, via Deutsche Bank, for up to MXP2bn. The maturities are 4 years 8 months and 9 years 8 months respectively. The first tranche will be floating rate and the second will be fixed rate. The bonds are rated AAA on a national scale with the funds destined for public works. Part of proceeds will go towards financing of the Line 12 of the subway system, according to a lead banker.