Category: Regions

Mexico will announce this week a $300m greenfield airport project 100km south of Cancun called Riviera Maya, Banobras head Alonso Garcia Tames tells LatinFinance. Banobras is acting on behalf of the government as structuring agent, and could participate in the financing, depending on the developer, says Garcia. Banobras expects to see interest in the project from foreign as well as Mexican engineers and developers.

Moody’s says it has upgraded America Movil’s ratings to A2 from A3. The outlook is stable. The upgrade was based on the expectation that the Mexican telecom company will continue to be successful operating in an increasingly competitive environment and that this will translate into steady and strong cash generation and credit protection metrics. The upgrade also considers the longer-term benefits of acquiring Telmex and Telmex International, despite slightly weaker credit metrics after the merger. The agency says the company’s liquidity position shows strong coverage of working capital, capex, near-term debt maturities as well as dividends and tax payments.

Fitch has affirmed Grupo Senda’s B minus rating and removed it from watch negative, assigning a stable outlook. The agency cites the turnaround in the Mexico-based passenger transportation company’s operating and financial performance beginning in H209, as well as the improving business and economic environment in Mexico. It expects Senda to continue to benefit from improvements in the Mexican economy, which is expected to grow at least 4% this year, after a contraction of 6.5% in 2009. Ebitda for the first, second, third, and fourth quarters of 2009 reached MXP81m, MXP94m, MXP167m, and MXP187m, respectively. Ebitda improvement was driven by tariff increases of approximately 20% in H209 and resulted in margins of over 20%. However, Fitch says the cash position remains weak. As of December 31, Senda had MXP146m of consolidated cash and marketable securities and MXP375m in short-term debt. Additionally, Fitch says total net debt/Ebitdar increased to 5.5x as of December 31, from 4.7x at end-2008. Fitch expects the company to keep net-debt-to-Ebitdar around 4.0x-5.0x over the next 2 years.

EchoStar and joint-venture partner Mexican communications firm MVS Comunicaciones have abandoned an offer for Mexican satellite operator Satmex after holders of more than 50% of its second priority senior secured notes refused to back the deal worth up to $374m. The would-be buyers offered to inject $267m in cash and use another $107m of Satmex’s own cash to pay creditors and shareholders in exchange of 100% of the equity of a debt-free Satmex. However, holders of the debt and equity could not reach an agreement on how to divide the cash. First-lien creditors would not accept a haircut, shareholders wanted to get paid something and second-lien creditors balked at being squeezed on both sides, says BCP director of corporate research James Harper. “There is a sense that the holders of the first lien notes are not willing to give up anything,” he explains. He adds that the only alternatives left to Satmex are to continue operating while trying to finance construction and launch of at least 1 new satellite or find another buyer. He does not expect EchoStar and MVS to return with a higher bid. Harper, who declines to comment on BCP’s exposure to Satmex, says that to pay its debt, Satmex would need to continue operating. But of its 3 satellites, 1 is not functioning, another should be operational for about 11 more years and a third only has capacity to last for another 2.5 years, he explains. Satmex is still generating cash in these conditions, and in the last 12 months made $88m. It also has $110m-$120m cash but needs to get a new satellite to continue generating cash after 2.5 years. A new satellite, he says, will cost over $300m. Harper adds that there is also a risk that clients will abandon Satmex and seek another provider, as it knows that one of the satellites will not be working after 2.5 years. Satmex says it continues to study its strategic alternatives and restructuring options. Jefferies advised the note holders and Deutsche and Peter J. Solomon advised EchoSt

Mexican microcredit institution Financiera Independencia says it plans to issue up to $300m in USD denominated 2015 senior guaranteed notes. The 144a notes, to be issued in the US, will pay an annual interest rate of up to 11%, the company says in a statement to the Mexican stock exchange. A “non-deal” roadshow is happening now, with apparently no indication on size or price. A person familiar with the issuer says it will likely issue much less than $300m and price well south of 11%. Proceeds will be used to refinance debt and allow the Sofom to make strategic acquisitions. Bank of America Merrill Lynch and Morgan Stanley are leading the sale. Earlier this year, Financiera Independencia acquired Brazilian peer Finsol for MXP530m.