Category: Regions

Mexican airline Mexicana said last week it had cancelled flights from DF to Montreal and Calgary as a direct result of grounding actions requested by an unnamed creditor. “The airline considers that the measures taken by the lessor are legally unjustified and a direct consequence of erroneous information provided by different media outlets,” says Mexicana. It adds that it is working with authorities to resolve the issues as soon as possible to minimize any further disruption. Mexicana is considering filing for creditor protection as one of 3 options for keeping it operating, Reuters reported last week, citing the head of Mexico’s flight attendant union. It adds that the airline is in talks with at least 10 creditors in a bid to ease its financial troubles, according to spokesman Adolfo Crespo. Reuters cites Crespo saying that Mexicana has a $123m loan from Banorte and another $76m line from Bancomext.

Promecap has raised MXP2.75bn through a certificado de capital de desarrollo (CCD) transaction supporting a private equity fund, the first of two CCDs pricing Friday after a break in the market of several months. It is the largest-ever from a pure private equity fund. In the deal, the PE firm founded by Fernando Chico Pardo plans to make investments in debt and equity across a variety of sectors in Mexico, with a special focus on smaller assets poised to benefit from middle-class growth. The certificates priced at MXP100, and the return structure follows the industry standard model. Investors receive 80% of the fund’s proceeds and Promecap gets 20%, as long as the buyers’ initial investment plus a 9% preferred return is met, according to regulatory documents. The CCD has a 2020 maturity, which can be extended for a year up to 2 times, with consent of holders. Credit Suisse managed the transaction. Founded in 1997, Promecap had MXP15bn under management at the end of Q1. The deals from Promecap and AMB, which also closed Friday, follow a MXP1.46bn CCD from PE fund Nexxus Capital in March.

The second and third certificado de capital de desarrollo (CCD) transactions of the year have closed, including the first supporting a real estate fund. A MXP3.30bn deal from commercial real estate developer AMB, which closed Friday, is the largest so far of any kind this year. A MXP2.75bn transaction from private equity firm Promecap is meanwhile the biggest from a pure private-equity fund. Other funds are looking to soon follow, accessing the country’s liquid pension funds, as the asset class continues to grow and the process becomes more streamlined. The 2020 maturity AMB deal priced at MXP100 is extendable by holder agreement. The return structure follows the industry standard model – investors get 80% of the fund’s proceeds and AMB receives 20%. This assumes that the buyers’ initial investment plus a preferred return – in this deal 9% – is met, according to regulatory documents. AMB’s fund will mainly focus on industrial land in urban areas used for logistic purposes, according to its prospectus. The deal received 14% more in orders than the MXP3.3bn limit, according to bankers managing the transaction, and was placed with 26 investors, including a sizeable participation from the government’s Fonadin infrastructure fund. Banamex and Actinver were the leads. The next CCD in the pipeline likely to price is another real estate fund from Prudential, through BBVA Bancomer. It is expected mid-August at a size of up to MXP6.5bn, and should also include Fonadin participation.

Temasek Holdings, Singapore’s sovereign wealth fund, is planning a joint venture with Impulsora Mexicana de Desarrollos Inmobiliarios (IMDI) to develop housing projects across several Mexican states. “We saw this as an opportunity because the middle class in Mexico continues to grow, so there is the need for housing with master planning,” Lorenzo Gonzalez Bosco, MD for investment in Mexico tells LatinFinance. “We have reached an agreement with the developer and the joint venture will take place by the third quarter of this year,” he adds. The 2 parties will each commit $100m over 3 years. “IMDI is one of the best developers in Mexico with a high level of expertise,” adds Gonzalez. “We will work together on several housing projects starting with buying suitable land, followed by the construction phase, and then selling the developments.” Temasek established offices in Mexico in 2008, after it expressed an interest in investing in LatAm. The office is headed by Gonzalez, who was previously CEO of Barclays in Mexico. Temasek manages a portfolio of 186bn Singapore dollars ($137bn), focused primarily on Asia and Singapore.

Holders of Sanluis’ 7% 2011 bonds have asked for an acceleration of a $132m payment due 2011, the debtor says. The move follows the Mexican auto parts maker’s missing of an $88m June 30 payment on its 8% 2010 bonds. Sanluis was widely expected to default, with Fitch noting as much in March as it lowered Sanluis to C from CC, based on a dangerously low cashflow. When announcing the missed payment last month, the company said it would examine its alternatives. Sanluis says the operations at its suspension and brake units will not be affected by the defaulted payment, as their debt is subordinated to the debt payments that have already been restructured under a previous agreement with creditors.

Banco Inbursa, a subsidiary of Mexican financial group Inbursa, will issue up to MXN5bn in 5-year paper, in its first bond issue since it was set up in 1993. The bonds due August 2015, rated AA on a national scale, will pay a spread over TIIE. They are scheduled to be sold August 11. “Proceeds from this deal will be used to improve the bank’s liquidity profile and grow its credit portfolio,” says a banker on the self-led transaction. “Up to now, the bank has not had a debt program, so we are still in the process of sounding out investors about pricing.”