Scotiabank Tuesday raised MXP2.67bn in Mexico, short of the MXP3.5bn it was aiming to issue and wide to expectations. The bank issued a $2.312bn 5-year at TIIE plus 40bp and a MXP358m 7-year at TIIE plus 49bp. Price talk for the AAA rated bonds had been in the 35bp area for both tranches according to an investor. Another investor adds that several banks have already issued this year, and so the buyside has sufficient AAA rated and bank paper. The bonds were issued to refinance MXP2bn that was due in September, MXP700m maturing in November and MXP800m due in December, according to investors. Meanwhile, Banco Compartamos was oversubscribed, as investors considered the spread and the AA rating attractive. The microfinancing bank that lends only to women issued a 2015 bond at 130bp, with the book 1.6x oversubscribed and closed in under an hour, according to a banker at sole lead BBVA Bancomer. Guidance had been 125bp-135bp, refined from an earlier 130bp-140bp over TIIE. The bonds are 50% amortizing in the 4th year and 50% amortizing in the 5th year. Compartamos was sold to banks, private banks and asset managers. It is the longest tenor issued by the bank, with previous bond issues only going up to 3 years, adds the banker. Proceeds will be used to extend its lending portfolio.
Category: Regions
Televisa Returns With 10-Year Jumbo
Televisa Tuesday issued a much anticipated MXP10bn local 10-year that had been expected September 9 but was cancelled at the last minute. The book was 1.3x oversubscribed and the bonds priced in line with guidance of Mbonos plus 135bp, says a banker at one of the leads. The main buyers were institutional investors, including Afores, private banks, investment funds and insurance companies. A month ago, investors said they were expecting the issue to price at about 120bp. At that time it was said that the bond issuance was cancelled because of volatility in local markets, and there was talk of Televisa seeking a dollar tap instead. However, some have since speculated that the offer was pulled because the issuer would have had to disclose an investment made in Univision. Televisa said October 5 it is investing $1.2bn in Univision, the US Spanish language broadcaster, in a deal that implies an equity valuation for the target of around $2.3bn. The market rewarded the buyer, sending Televisa stock up 13.75% on the day. HSBC and Santander managed the bond sale, rated AAA on a national scale. Proceeds will be used to strengthen the company’s financial position.
White & Case Names Mexico Partner
US-based law firm White & Case has elected Mexico City-based Sean Goldstein as partner in its global project finance practice. He has experience representing sponsors in a wide variety of infrastructure and energy projects as well as in asset finance work. Goldstein is one of 35 new partners elected for 2011.
PDSVA to Offer New Bonds, Swap
PDVSA says it will sell $3bn of 2017 bonds in the local market, with further details about the offer due October 18. As with previous government offerings, investors will be allowed to buy the dollar-denominated bonds with VEB. The offer is directed at individuals and businesses with the “sector productivo nacional” designation. The state-backed oil company also plans to offer holders of its 2011 bonds an opportunity to exchange them for 2013 bonds, with further details to be announced in coming days. PDVSA does not name banks, through Citi is rumored to be on the transaction.
Total and Gazprom Partner in Bolivia
French oil company Total has signed a farm-out agreement in which it will transfer a 20% interest in Bolivia’s Ipati and Aquio licenses to Russia’s Gazprom. As a result, Total, the operator, will hold a 60% stake, Argentina’s Tecpetrol 20% and Gazprom the other 20%. Terms of the deal were not disclosed. Total has been active in Bolivia since 1996 and produced 20,000 barrels of oil equivalent per day in 2009.
IMF Stymies Bolivia Bond Comeback
The IMF will be doing a study of the financial system in Bolivia next March or April, meaning the country’s planned bond issue will not take place until 2012, finance minister Luis Arce tells LatinFinance. Bolivia had been planning to do its first bond issue in 70 years mid-2011. Arce adds that CAF is helping to co-ordinate the transaction, but bookrunners, size and spread have not yet been discussed. “We want do the bond issuance to position Bolivia in international capital markets and demonstrate the country’s macroeconomic strength,” says Arce. “Interest rates are low and the economy is well managed. After 15 years working to overcome the debt crisis, we have not defaulted on payments, and have reduced our external debt from $4bn in 2006 to $2bn, so now is a good opportunity to issue a bond,” adds Arce. The finance minister says a bond issue would lead the way for corporates to also be able to tap the market. “The economy is growing but the financial system isn’t so we expect this to help develop the capital markets as Bolivia only really has money markets, not capital markets,” adds Arce. Proceeds will go towards strategic government projects. Over the next 7 years, Bolivia plans a $32bn investment program, and Arce says it already has 40% of the funding. It is looking for $17bn to come from overseas investment. Projects include generation and export of energy to Brazil and Argentina, a fertilizer plant and infrastructure. The latter includes a motorway to the northern region of the country to access natural resources. Funding for its projects will come from a mixture of public, private and PPP investment.
Cemex Agrees to Acquire Ready Mix
Cemex has agreed to acquire Ready Mix USA’s interest in two joint ventures between the companies. Cemex, the Mexican building materials company, will spend around USD360m on the transaction and consolidate USD17m worth of debt held by the joint ventures. The deal is expected to be completed in September 2011. The assets operated by the JVs include cement plants in Alabama and Georgia, and 10 sand and gravel pits, 149 concrete plants and 20 block plants located in Arkansas, Mississippi, Tennessee, Alabama, Georgia and Florida. The companies do not return calls seeking comment.
Elementia Plots Local Bond Issue
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.
Interacciones Plans Covered Bond Spree
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.
Mexican Banks Fill Local Pipeline
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.