Category: Regions

Issuers looking to price CCDs in Mexico’s domestic market are optimistic that a few deals can price in the coming weeks, including a Promercap fund as soon as this week. The private equity fund is said to be “a matter of days” away from closing, according to people following the transaction. The exact size has not been finalized, though the deal is expected at a similar size to previous private equity CCDs, at about MXP1.0bn-MXP1.5bn. Credit Suisse is managing the transaction for the PE firm founded by Fernando Chico Pardo. Also waiting in the wings is an infrastructure fund from LatAm Capital Advisors, a subsidiary of MBIA, through Banamex. It is heard aiming for the first week of August. Two real estate-focused deals are then seen following, as Prudential Mexico looks to close a 10-year deal of up to MXP6.5bn through BBVA, and AMB finalizes a MXP3.3bn 10-year transaction through Banamex and Actinver. Several others are also in the pipeline, including private equity fund CCDs from Darby and Protego. With institutional investors pooling resources to study deals, issuers have had to wait several months to close transactions, though as more price the turnaround time is gradually decreasing, participants say.

BNY Mellon has named Juan Carlos Morales as president of its Mexico unit and general manager of its corporate trust businesses in the country. Morales, who has become a member of the company’s LatAm management committee, will be based in Mexico City. He reports to Rene Boettcher, BNY Mellon’s Chairman of Latin America, and Sonia Chaliha, managing director of the Global Americas region for BNY Mellon Corporate Trust. Morales joined the shop in 2004 and was most recently CFO of BNY Mellon Wealth management. BNY Mellon has $1trn in assets under management.

Mexican state owned utility CFE has raised MXP5bn at the tight end of guidance amid large oversubscription, according to bankers on the deal. “The substantial demand is a sign of strong liquidity in the market and that market participants in Mexico are very comfortable with CFE’s risk,” says one. The utility had been looking to raise MXP3bn-MXP5bn in bonds. CFE reopened an existing 2019 bond at 7.15% or Mbonos plus 120bp for MXP1.75bn, after receiving MXP8.87bn worth of orders. Guidance was Mbonos plus 120bp-130bp. The new 2020 floater priced at TIIE plus 45bp, versus TIIE plus 45bp-55bp talk. The MXP3.25bn floating rate tranche received MXP14.98bn worth of demand. Both tranches are amortizing, with an average life of 5 years, which Mexico-based investors say make the deal particularly attractive. Banamex and BBVA Bancomer managed the sale, rated AAA on a national scale. The 2019s were sold originally in August 2009 for MXP3.4bn, and reopened in March for MXP2.4bn at Mbonos plus 120bp at a yield of 8.05%. Last month, fellow AAA state-owned credit Pemex priced MXP5bn in a reopened 9.1% of 2020 bond to yield Mbonos plus 113bp.

BBVA Bancomer is planning to sell 10 year fixed-rate notes denominated in Udis on Mexico’s domestic market, according to a regulatory filing. The sale, rated AAA on a national scale, is scheduled for an unspecified date in August. Proceeds will be used to boost general liquidity, according to the documents. The deal could be for up to MXP10bn equivalent, according to a report from Scotia Capital. The issuer last came to the domestic market in June 2009, when it raised MXP2.6bn in 10-year floating rate tier 2 notes, priced at TIIE plus 130bp, says Dealogic.

To counter a slew of senior LatAm investment banking defections, UBS has been quietly staffing up in a variety of product areas. Rafael Calderon started this week as a Mexico City-based director of investment banking for Latin America. He was previously at Rothschild. Since the start of the year, the Swiss bank has recruited some 37 bankers at a variety of levels for equity, FICC and investment banking. Among them are FICC MDs David Cannon, David Hobert, Diego Rivero, IB MD Kim Matthew, and several equity research analysts. “Yes, we’ve lost a few people over the last few weeks, there’s lots of competition,” Gerard Cremoux, co-head of LatAm investment banking at UBS, tells LatinFinance. “But hiring 37 people shows that net-net we are growing, and we’re growing very fast,” he adds. UBS continues to scout talent, mainly for Brazil and US-based positions. According to Cremoux, since UBS bought Brazilian brokerage Link Investimentos for BRL195m in April, it has jumped to fourth by market share of cash equity trading market, from seventh previously. And UBS says it will boost that by transferring its share of the business to Link. “I am very confident that we get to number three once we start to move our flow. So we will have a market share that is going to be bigger than JPMorgan and Merrill Lynch and Santander. It’s going to happen before the end of the year,” says Cremoux. UBS recently lost investment banking MD Francisco Salas to Citi. The move follows the exit of several senior LatAm investment bankers. They include Alejandro Matoso who went to Morgan Stanley, Luis Castro who quit for BofA Merrill Lynch, and Rodolfo Molina who quit for Jefferies.

Mexican state-owned utility CFE will come to the domestic market Wednesday with a dual-tranche deal worth up to MXP3bn. CFE aims to reopen outstanding 8.85% of 2019 fixed-rate bonds as well as sell new floaters due 2020. Price talk on the fixed rate tranche is heard at Mbonos plus 120bp, and TIIE plus 50bp for the floating rate tranche, say investors looking at the deal. Both tranches are amortizing, with an average life of 5 years, which Mexico-based investors say makes the deal particularly attractive. The 2019s were sold originally in August 2009 for MXP3.4bn, and reopened in March for MXP2.4bn at Mbonos plus 120bp. Banamex and BBVA Bancomer are managing the sale, rated AAA on a national scale. Last month, fellow AAA state-owned credit Pemex priced MXP5bn in a reopened 9.1% of 2020 bond to yield Mbonos plus 113bp.