Category: Regions

Multinational food company Nestle says it will invest MXP5bn ($390m) in Mexico over the next 3 years. It aims to strengthen its production capacity and infrastructure in that market, said CEO Paul Bulcke during the World Economic Forum meetings in Davos, according to a company statement. A major part of the MXP5bn will be invested in the Nescafe soluble coffee plant in Toluca. Nestle will increase the facility’s capacity by 40%, which will make it the biggest soluble coffee plant in the world.

Mexican chemical producer Mexichem has agreed to acquire the fluor unit of INEOS Group, a UK-based manufacturer of petrochemicals. The transaction is estimated to be valued at around $300m-$350m, or 5x Ebitda, according to a Mexico-based equity analyst who covers Mexichem. The analyst also estimates that this acquisition will contribute to a sales increase of 7%-14% to Mexichem. The buyer is paying cash for the asset. “Mexichem has the resources to pay without increasing its debt levels because in late 2009 it issued $350m in bonds,” the analyst says. Moody’s says that the acquisition will not affect Mexichem’s Ba1 rating or its stable outlook. Meanwhile, an INEOS spokesman in London says that the divestiture of the fluor unit is part of the company’s efforts to strengthen the balance sheet. He adds that Barclays advised the seller.

Starved of sizeable domestic corporate issuance for months, Mexican investors today are set to get a chance to fill up on an expected MXP10bn-MXP15bn in new Pemex bonds. The state-owned oil producer can choose at the time of the sale between 5-year MXP-denominated floaters and 10-year fixed-rate notes in MXP or UDIs. Proceeds are marked for debt repayment, investment and general corporate purposes. BBVA, HSBC and Santander are managing the sale, rated AAA on a national scale. As with its pair of MXP10bn issuances in April and May of 2009, Pemex offers a hefty transaction that could help open up local DCM, as last year’s dispute between institutional investors and issuers over bond covenants and sale protocol has made it tough for all but the county’s bluest-chip corporate borrowers. It would be the first corporate offering in Mexico since Holcim Apasco priced a 2013 MXP950m trade receivables securitization in December, according to LatinFinance data.

Tiendas Comercial Mexicana has again extended the period for its local debt exchange offer, it says, to March 2. Parent Controladora Comercial Mexicana seeks to extend its maturity profile as it recovers from crisis-related derivative problems. The retailer is offering holders up to MXP1.5bn in new 2016 notes in exchange for 5 series of outstanding bonds with nearer maturities. The new bonds are rated BB on a national scale and should be issued following close of the offer. Comerci has not indicated the acceptance rate to this point. Ixe is managing the transaction.

Mexico’s Coca-Cola Femsa (KOF) has sold its first dollar bond since 1996, upsizing to a thirsty crossover base and pricing through the sovereign. “For the first time in a while dollar bonds were cheaper [than Mexican pesos],” Ian Craig, KOF’s director of corporate finance and treasury tells LatinFinance. He adds that KOF had been monitoring the markets for several months and began to see attractive levels in December. Those involved in the trade claim it was the lowest-ever pricing on a 10-year LatAm dollar credit. The A3/A minus $500m bond was upsized from $400m on $2.5bn in demand, bankers on the deal say. The bulk went to high-grade investors, looking for a pickup to similarly-rated developed credits. EM accounts saw no incentive to participate in paper yielding 55bp inside UMS. The largest bottler of Coca-Cola beverages in LatAm priced at 99.491 with a 4.625% coupon to yield 4.689%, or UST plus 105bp, the tight end of 110bp area guidance. It was heard trading up around 1.5 points at the close Tuesday. Craig estimates the bottler could have sold $100m more, but was satisfied with growth to $500m. The deal went to about 150 accounts, he says, with the “great majority” US high-yield. About 95% placed with US-based accounts, a banker managing the deal says, with 55% going to asset managers and 30% to insurance companies. BofA-Merrill Lynch and Goldman Sachs were the leads, following a 4-day “non-deal” US road show last month. Proceeds are earmarked for refinancing debt and general corporate purposes. Craig says KOF has $300m in maturities across all currencies to meet this year. The bottler’s rating is higher than Mexico’s due to 31.6% ownership by Coca-Cola and a history of financial support to KOF from north of the border, says Fitch. It is 53.7% owned by Femsa SA, which last month exchanged 100% of its Femsa Cerveza beer unit for 20% of Heineken. KOF sold $200m in 10-year bonds in 1996, according to Dealogic and has borrowed 5 times since in the Mexican domestic

Capital Gold, a New York-based gold miner operating in Mexico, says it has been authorized to list common stock on the NYSE AMEX exchange. Capital Gold had been working on listing on the NYSE AMEX for a few months. In October, company president John Brownlie told LatinFinance this was in the planning stage. The company applied for the listing January 25. Market cap on the TSX is CAD168m. It is trading in the US under the symbol CGC. Prior to listing on NYSE, it also traded on the OTC Bulletin Board under the symbol CGLDD.