Category: Regions

Mexican homebuilder Sare has named Gabriel Terrazas as CFO. He joins from Boutique advisory firm Consultores Convixion, where he worked with Sare. Prior to Convixion, he was a banker at BBVA Bancomer. Terrazas replaces Alberto Vaz, who steps down for personal reasons.

Defaulted mortgage lender Metrofinanciera has filed to have a US court recognize its Mexican concurso mercantil filing under US chapter 15. One of the first companies in Mexico to restructure under the concurso mercantil bankruptcy laws, Metrofinanciera’s local bankruptcy plan was approved in June. It is being advised by Bank of America Merrill Lynch.

Mexican airport operator ASUR says Mexicana’s suspension of activities could have an adverse effect on its business. The group, which operates 8 airports in the Southeast of Mexico including Cancun, says flights operated by Mexicana represented 10.26% of ASUR’s income in the 7 months to July 31. However, ASUR adds that it cannot yet define the extent to which its business will be impacted because it does not yet know whether competing airlines will increase flights as a result of Mexicana no longer operating.

Mexican cement company Cemex has completed the sale of 11 assets in Kentucky to Bluegrass Materials Company for $90m. The package consists of 7 aggregates quarries, 3 resale aggregate distribution centers, and a concrete block manufacturing facility. Cemex acquired the assets in 2007 as part of the Rinker Group acquisition. The cement maker plans to use proceeds from the sale to reduce its outstanding debt and to enhance its liquidity position. Fitch recently upgraded its outlook on the company’s B rating to positive, citing debt-reduction efforts. Cemex’s debt load fell to $17.2bn as of June 30, from $21.2bn a year earlier, says Fitch.

Mexico’s state of Oaxaca has secured a MXP500m loan from Banorte. The facility is payable through a trust, to which the state pledges future flows from a portion of participation revenues received from the federal government, which in this case is 7%. The loan has a maturity of 10 years, with a 1-year grace period and will pay 155bp over TIIE. It has a Baa2 rating on a national scale from Moody’s, reflecting creditworthiness of the state of Oaxaca, as well as a trust structure based on “an irrevocable notification to the federal treasury regarding the transfer of rights and flows of participation revenues to the trustee,” says Moody’s. It adds that estimated cashflows generate a relatively high debt service coverage ratio compared to peers. Cashflows are expected to provide a 6.5x coverage during the lowest point during the life of a loan in a base case scenario, and 5.4x in a stress case scenario, says Moody’s. It adds that there is a moderate level of reserve funds, which give a 2x debt service coverage of the highest months over the life of the loan and provide a solid cushion against payment delays. The last rating action on State of Oaxaca by Moody’s was in 2007, when it gave a Baa3 rating to an enhanced loan given by Scotiabank, also for MXP500m.

Fitch has upgraded Bio-Pappel, known as Corporacion Durango until July 1, to B from CCC, as a result of improved liquidity. The Mexican paper company generated $54m of cashflow from operations during the last 12 months and has built its cash position to $88m as of June 30, says the agency. It has $266m of total debt, of which $250m is in 2016 senior guaranteed step up notes. The outlook is stable. Durango filed for bankruptcy in 2008 after missing a $26.5m interest payment on its senior notes. Through a restructuring, it was able to reduce leverage from $522m to $250m in 2009. Rothschild advised on the restructuring.