Category: Regions

Grupo Bimbo says it has prepaid $300m towards a $600m revolver facility due July 2010, using its own resources. After the prepayment, Bimbo’s debt totals MXP37.0bn and the total debt to Ebitda ratio is 2.5x. CFO Guillermo Quiroz says the company continues to generate strong free cashflow, following expansion of the US business. “This enables us to fulfill our commitment of maintaining a healthy credit profile while sustaining sufficient flexibility in our balance sheet, he adds.

Mexican development bank Banobras plans to acquire up to 20% of Macquarie’s new infrastructure fund – which is about to be listed in Mexico through the sale of Certificados de Capital de Desarollo (CCD) – Alonso Garcia Tames CEO of Banobras, tells LatinFinance. It is the first such allocation by the state infrastructure development bank, but Garcia Tames says it falls within Banobras’ mission of supporting infrastructure projects, and calls it a “very attractive investment.” “[CCDs] are a very good investment, and will access resources that are now being channeled into other areas,” he says of the asset class as a whole. Macquarie is in the final stages of negotiating the CCD with investors, bankers on the deal say, and should price before the end of the year. It is targeting a size of up to MXP10bn, according to regulatory documents, at 10 years maturity, according to bankers. Credit Suisse is leading the Macquarie transaction. CCDs, issued by the Farac road concession and Wamex so far this year, are instruments listed on Mexico’s bond markets that offer equity-like exposure to investors, principally domestic pension funds.

Mexican media company TV Azteca is preparing to sell $40m in 1-year dollar bonds linked to the MXP, according to investors, who say yield guidance is 8.75%-9.00%. The 8.25%-coupon note will pay interest and principal adjusted to the central bank’s interest rate at the time each payment is due. Proceeds will be used for general corporate purposes. BCP Securities is managing the sale, which is not rated.

Fitch has lowered Mexico’s sovereign debt rating to BBB from BBB+ in a move analysts say has largely been priced in by the markets. “The global economic and financial crisis and falling oil production have accentuated weaknesses in the sovereign’s fiscal profile, including the high oil dependence of public sector revenues, a narrow non-oil tax base and a limited fiscal cushion,” the agency says. These factors limit Mexico’s ability to cope with future shocks, it adds. The recent tax reform measures were a positive development, but not enough, \ as oil will likely still account for over 30% of total government revenues, observes Fitch. “The hype around the news [of the downgrade] far exceeded the [market] reaction. Mexico trades like a BBB country and has done so since the beginning of the year,” RBS says in a report. JPMorgan agrees, though it adds that a downgrade from S&P is not priced in at all. The shop does not believe S&P will lower Mexico any time soon. S&P rates Mexico BBB+ with a negative outlook.