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.
Category: Regions
OHL Eyes Mexico Spinoff
Spanish builder Obrascon Huarte Lain is preparing a listing of its Mexico assets, a deal which would give Mexico’s market the large IPO it has been awaiting for years. OHL is analyzing the possibility, and says it has not made a firm decision to go ahead. It has hired Credit Suisse, Santander, BBVA and UBS for a sale, according to market sources, and should make a decision to go or not in the next few days, with an eye on a deal before the end of November. There is no indication of how much of its Mexican operation OHL would float, but market sources expect a deal of $500m-$1bn equivalent. OHL is an active road builder and concessionaire throughout LatAm. In Mexico, it is building the Bicentenario elevated Mexico City toll road, Libramiento Norte de Puebla road, and latter phases of the Circuito Exterior Mexiquense road, and owns 100% of each, according to OHL. It also operates the Circuito Exterior Mexiquense Phase I road, Carretera Amozoc-Perote road and Toluca International Ariport, of which it owns 87%, 55% and 33%, respectively.
Ixe Raises Hybrid Note
Mexico’s Ixe has added to the subordinated portion of its capital structure, selling $120m in junior subordinated notes, according to a source with knowledge of the matter. The bank priced the B+ 2020 bonds at par with a 9.25% coupon, according to the source. Goldman Sachs managed the sale. The bank’s only previous dollar bond, according to Dealogic, was a $120m 9.75% perpetual bond in 2007, also managed by Goldman. Ixe and larger Mexican bank Banorte were the subject of rumors last week regarding a merger, or sale to Banorte.
Mexico Samurai Takes Time
Mexico’s Samurai bond should happen towards the end of this month, the sovereign’s public credit head Gerardo Rodriguez tells LatinFinance. “We are working on the transaction, of course, and there is some discussion with investors, but we don’t have anything finalized yet,” he adds. Rodriguez declines to comment on talk that price discussions are in the range of the yen swap plus 50bp-60bp. The sovereign is expected with a 10-year bond of around JPY150bn yen ($1.8bn), guaranteed by JBIC. Nomura, Mitsubishi UFJ Morgan Stanley and Mizuho are managing the sale. Mexico’s December 2009 Yen bond sale raised JPY150bn in 2019s to yield 2.22%, or yen swaps plus 80bp.
Moody’s Chops Su Casita Debt
Moody’as has downgraded the ratings of Mexico mortgage lender Hipotecaria Su Casita’s senior unsecured debt and global scale local currency to Ca from Caa2. The ratings are on review for possible downgrade. The action follows the company’s announcement that it had presented a restructuring plan for all its debt to its debt-holders. Holders of MXP6.75bn in long-term notes denominated in pesos and dollars would receive MXP1.5bn in new 5-year debt guaranteed by non-operating assets, paying annual interest of interbank rate TIIE plus 250bp, MXP550m in new 3-year instruments guaranteed by non-operating assets, and MXP500m in 10-year subordinated convertible bonds with rates of 3%-8% representing 10% of the restructured company’s capital upon conversion as well as capital equal to 19.98% of the restructured company. Moody’s says this is a distressed exchange, which it considers a form of default.
BTG Heard Discussing SWF Stake Sale
Brazil-based investment bank and asset manger BTG is heard to be in talks about a private equity capital raise with Singapore sovereign wealth fund GIC. “We are discussing with GIC, among others,” says a senior BTG official. He declines to comment on the size of the stake being sold, other than to say, “It’s significant.”
Morgan Stanley Launches Mexico Platform
Morgan Stanley has set up a sales and trading team in Mexico and will launch its full broker-dealer offering by Q4, Dario Lizzano, director of LatAm equity research for Morgan Stanley tells LatinFinance. “In terms of market share we expect to be in the top 3 in 18 months’ time,” says Lizzano. The expectation that there will be an increase in trading volume locally and clients wanting on-the-ground expertise are among reasons to open a broker dealer, says Lizzano. “Today, the average daily trading volumes of LatAm equities are taking place 50% in local markets and 50% in ADR,” says Lizzano. “We expect growth in capital market activity to be faster at a local level and in 5 years plus we expect volumes to be 60% locally and 40% ADR,” he adds. Lizzano adds that Morgan Stanley wants a presence in Mexico in particular because it believes pension funds and other institutional investors will substantially grow equity exposure. The sales and trading team is led by Miguel Machado, who relocated to Mexico in the summer. Prior to this he was a senior sales person for the LatAm desk in the London office for 5 years. Victoria Mas will be the senior sales person. She joined in July from BBVA Bancomer, where she worked in the Mexico institutional equities sales team. Javier Diaz Rivera, hired in August, will be responsible for equity trading. He was previously in the equity trading division at Merrill Lynch for 10 years, where he worked as a senior trader on the LatAm equity desk in the Mexico and New York offices. Nikolaj Lippman was hired in August and will be the Mexican country analyst. He joined from Bankinvest Asset Management, where he was chief portfolio manager for 9 years, and reports to Guilherme Paiva.
Copec Pursues Proenergia
Chilean energy company Copec says it has launched an offer to acquire 4.9% of Colombia’s Proenergia Internacional for about $237m in cash. Copec already owns 47.2% of the target. On May 14, Copec acquired 100% of AEI, which gave it its stake in Proenergia. At that time, Copec revealed its intention to buy the additional stake. Proenergia has 53% of SIE, which owns 89% of Terpel’s business in Colombia. Copec will buy the shares in the Colombian exchange. Corredores Asociados will handle the transaction.
Provimi Buys Into Mexico
Dutch animal nutrition company Provimi has acquired NASSA, Nutricion y Alimentos de Sonora in Mexico. A spokesman for Provimi declines to comment on the price of the acquisition, revenues of the target company, bankers advising on the deal, or whether Provimi would be interested in making additional acquisitions in Mexico or LatAm. He adds that it was funded by cash on hand. NASSA represents the first acquisition for Provimi in Mexico. It already generates EUR180m from its businesses in Argentina, Colombia and Brazil, where it says it operates the local market’s largest animal nutrition company. Provimi’s last acquisition was in Colombia in 2008.
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.