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.
Category: Regions
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UBS Rebuilds LatAm Team
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.
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Nyrstar Acquires Peru Mines
London-based miner Nyrstar says it has acquired the Contonga and Pucarrajo mines in Peru for $23m cash plus $16m debt. The mines contain zinc, lead, silver, gold and copper deposits, the company says. Contonga processes about 660 tons of ore per day and Pucarrajo has the capacity to process about 1,100 tons per day, but has been shut down since June 2009 due to cash constraints, Nyrstar says. The buyer intends to ramp-up both operations to a combined capacity of more than 2,000 tons per day of ore by the end of 2012, resulting in annual production of approximately 40,000 tons of zinc in concentrate, 4,000 tons of lead in concentrate, 1,000 tons of copper in concentrate and 1.5m troy ounces of silver.
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Pricing Heard on CFE MXP Bonds
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.
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Investors Smile on Bancolombia Tier 2
Bancolombia has sold the first non-sovereign cross-border debt deal from Colombia in over 8 months, $620m in 2020 Tier 2 bonds at the tight end of guidance. Colombia’s largest bank took advantage of last week’s successful sovereign bond and overall positive sentiment post-election to drum up nearly $3bn in orders. The Baa3/BB+ issue came at 98.418 with a 6.125% coupon to yield 6.341%, or UST plus 337.5bp, versus 337.5bp-350.0bp talk. It was upsized slightly from $600m. The bond traded up 1.5 points in the gray Monday afternoon, say investors. “Subordinated debt allows for exposure at a higher yield to the highest quality banks in the region,” says a New York-based participating EM account, spotting the concession at about 12.5bp. A banker on the deal says the concession accounts for an extension and subordination versus the bank’s existing 2017s trading at UST plus 315bp. The bank’s board approved a COP1.2trn ($640m) equivalent issue earlier this year. It plans to use proceeds for general corporate purposes. BofA Merrill Lynch and JPMorgan managed the sale, after running investor meetings in the US and Europe last week. It was the bank’s first dollar issue since 2007, when Bancolombia sold $400m in 6.875% of 2017s through JPMorgan and UBS.
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Positive Outlook for Ecopetrol
S&P has changed the outlook on Ecopetrol’s BB+ rating to positive from stable after a similar move on the Colombia sovereign. The action, says S&P, reflects the state-owned oil company’s leadership in the country’s oil and gas industry, low production costs and its proven access to the capital markets. Ecopetrol said last week it plans to invest $80bn from 2011-2020, with the aim of producing 1m barrels per day (bpd) of oil by 2015. The amount implies a significant pickup to spending in recent years, and should also boost the issuer’s capital markets needs.
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Mexico Leaves Rate Unchanged
Mexico’s central bank has left its monetary policy rate intact at 4.5%, in line with market expectations. Barclays says the bank’s statement includes a “fairly tranquil reading of external conditions and slightly more upbeat look on the domestic demand.” This, says the shop, should limit rate cut speculations in coming months, though it does not believe this signals imminent intentions to begin normalizing monetary conditions. Barclays expects unchanged rates until Q2 2011. Morgan Stanley notes that the MXP has weakened from its April levels of around MXP12.20/USD, reducing the need for the bank to adjust the rate.
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TMM Plans Local ABS
Mexican maritime logistics provider TMM plans to issue a MXP10.5bn ABS July 27, according to a banker at Value Casa de Bolsa, which is managing the transaction. The 2030 bonds, rated AA on a national scale, would pay a spread over TIIE and were planned to replace MXP9bn in 3 outstanding service contract receivable securitizations. They will also be used to refinance smaller bank debt and working capital. In the largest and most recent of the 3 prior deals, TMM sold MXP4.39bn in 2028 bonds at TIIE plus 219bp in July 2008. TMM has a fleet of boats servicing offshore oil rigs, in addition to other transportation and port operation business lines.
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Televisa, Inbursa Exit Volaris
Grupo Televisa and Inbursa have sold their stakes in Mexican low-cost airline Volaris to an investor group made up of Indigo Partners, Discovery Americas and several individuals including Pedro Aspe and Emilio Diez Barroso Azcarraga. Televisa says it got $80.6m for its 25% holding, which it bought in late 2005 for $49.5m. Evercore Partners and Caoba Capital advised Volaris.
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Canacol Sees Opportunity in Colombia Listing
Canada-based oil company Canacol Energy, which plans to list its shares in Bogota in the next few weeks, hopes to become Colombia’s next oil play, following in the footsteps of Pacific Rubiales, vice president Kevin Flick tells LatinFinance. “Retail investors are investing in Pacific Rubiales and looking for the next oil play in Colombia. There is a lot of opportunity for us to ride the paved road,” he says. Canacol is working with Citi, the same bank that advised Pacific Rubiales on a listing. Looking beyond Bogota, Flick is enthusiastic about the integration of Colombia’s stock exchange with those in Lima and Santiago, which some say could happen by the end of the year. Flick says the integration would provide access to larger liquidity pools and lower financing costs. Canacol trades on the TSX Venture Exchange. It has a market cap of CAD366m and 333.3m shares outstanding.