Category: Regions

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.”

Mining giant Grupo Mexico has announced it plans to merge its American Mining Corp. (AMC) unit with Southern Copper and Asarco. As part of the deal, Grupo Mexico says Southern Copper shareholders will get 1.237 shares of AMC common stock for each share of Southern Copper common stock held. Santander equity analyst Victoria Santaella says that while the deal values Asarco at $6.8bn, she believes the unit’s fair value is $3.4bn. She adds that the fusion is negative for Southern Copper shareholders. “We regard this transaction as expensive for Southern Copper stockholders as the value assigned to Asarco is very high . . . thus lowering the upside potential on the stock.” However, she says it is good news for Grupo Mexico’s investors, as the company is monetizing Asarco after regaining control of the company for less than $1bn 7 months ago. Actinver equity analyst Karla Pena says the deal is only “marginally positive” as the merger will only bring savings through streamlining of management. “Instead of having 2 separate entities with separate management teams, there will only be 1 management team now,” she explains. Morgan Stanley is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom is acting as legal counsel to Grupo México and AMC.

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.