Category: Regions

Mexican retailer Grupo Famsa has raised a $44m euroclearable CP issue. The 1-year discount note pays an 8% yield at maturity. Proceeds are being used to help finance retail purchases of white goods by customers. The deal was placed largely with retail accounts, says a banker on it, including family offices and private banking. Famsa’s last visit to the market was a MXP1bn offering of 2012 cebures at TIIE+250bp via Ixe. Last week’s CP was led by US-based broker Atlas One, which acted as placement agent. Execution Finance, a Mexico-based shop, was Famsa’s financial advisor.

Telmex is targeting October 28 for the sale of MXP4bn-MXP6bn in domestic floating-rate bonds. The phone operator is planning 2014 and 2016 tranches. The exact size has not been indicated, but bankers managing the transaction say Telmex is looking for MXP4bn-MXP6bn. Inbursa and Banamex are managing the sale, rated AAA on a national scale. Proceeds will help refinance a 4.75% coupon $950m dollar bond due next year, and cover general corporate purposes. In July, Telmex sold MXP8bn in 2011 bonds at TIIE plus 74bp and 2013s at TIIE plus 95bp. Also, its Telmex International spinoff – which sold MXP5bn in the local markets in September – filed to increase its 5-year shelf to MXP20bn from MXP10bn.

New York-based miner Capital Gold, whose assets are in Sonora, Mexico, is planning to list on the NYSE “within the next few months,” says newly appointed president John Brownlie. The company’s stock trades on the TSX and has a market cap of roughly $150m. Brownlie also says the company is finalizing a letter of intent to enter a joint venture with an exploration company that operates in Durango, Mexico. “We would ultimately own the company’s assets,” he adds, saying that full ownership would take a few years. Capital Gold, which Gammon recently pursued unsuccessfully, could also consider offers from other potential acquirers when it achieves its full shareholder value, however, Brownlie indicates his focus is on growing the company. He believes Capital Gold is undervalued compared to peers. While the peers are valued at an average of 1.00x NAV, Capital Gold is valued at 0.60x NAV, says the president.

The World Bank has approved a $1.5bn loan to Mexico aimed at developing public policies to support stimulus of the economy while strengthening the framework for long-term sustainable growth. “In order to achieve this, regulatory, monitoring and financial frameworks will be developed for low greenhouse emissions evolution of the urban transport and energy sectors, key to generate a low carbon growth model,” says the multilateral. The deal is a single tranche development policy loan with a variable-spread loan at 6-month Libor, to be paid in 17 years with a 16.5 year grace period. A 0.25% disbursement fee was agreed. The project is expected to be completed by May 2011 and includes investment in clean and renewable energy, transport and associated technology.

Mexico’s IDEAL has finally brought the sequel to last year’s jumbo toll road concession securitization, selling MXP2.4bn in 2019 bonds. The Mexican builder and concessionaire controlled by Carlos Slim priced a MXP1.4bn peso-denominated floating-rate tranche at TIIE plus 175bp, and a MXP1bn UDI denominated-piece at 5.33%. The deal – which was filed in July and expected ever since – saw a “healthy oversubscription,” according to a banker managing it, and went mostly to Mexican institutional investors. The bonds have an average life of about 7 years, and will be backed by revenues from the Champa-La Venta, Libramiento de la Ciudad de Toluca, Tijuana-Mexicali and Tepic-Villa Union toll roads. This is the same trust as last year’s deal, which represented an innovation for Mexico in that new roads may be added to it, though none have been yet. Credit Suisse and Inbursa managed the sale, rated AAA on a national scale and part of a MXP50bn program. Last year, in much different market conditions, IDEAL sold MXP7.1bn in bonds, including MXP1.5bn in 2015 notes at TIIE plus 28bp, MXP1.3bn in 2036s at 10.50% fixed, and MXP4.3bn-equivalent in 2036 UDI-denominated bonds at 5.69%.

Controladora Mabe has sold $350m in 2019 bonds, upsized from $300m. The Mexican white goods manufacturer saw about $900m in orders, according to a banker on the deal, and went to about 100 accounts. The bond priced at par with a 7.875% coupon, flat to 7.875% area guidance, and was heard trading level to 0.5 firmer in the gray Wednesday afternoon. “They did well considering the heavy supply this week,” says a DCM banker away from the deal. He notes that being the only Mexican cross-border credit this week helped it stand out, as did scarcity value. The deal is Mabe’s first since a $200m 6.5% of 2015 sold in 2005 through ABN and Citi. Bank of America-Merrill Lynch and HSBC managed this week’s sale. Mabe plans to use proceeds to refinance debt. General Electric owns 48.4% of Mabe, and is also a JV partner for supplying ranges, refrigerators and other products in the US.

A growing band of entities hoping to issue Mexican Certificados de Capital de Desarollo (CCDs) find themselves waiting for investors to understand the new asset class before committing. “The Afores want more due diligence than they do with bonds,” says a banker managing one, adding that roadshows are also taking longer. “We were not quite ready yet,” says an investor at one of the major Afores, who asks not to be identified. He notes that there are a lot of new deals to consider and that Afores are still very conservative, despite credit markets rallying since the crisis and investment rules being relaxed. Issuers are looking to follow ICA and Goldman Sachs’ MXP6.55bn transaction that was done earlier this month to take out Red de Carreteras de Occidente (Farac I) road concession debt, the first issuer under the new structure. Both bankers and investors note that Afores were more familiar with the Farac asset, and toll roads in general, than some of the other projects being pitched under the CCD structure – which allows Mexico’s pension funds to take private equity-like risk through a special type of debt security. Three are still hopeful of getting done before the end of the month, according to bankers managing them. They include Wamex and Macquarie, both through Credit Suisse, and a restaurant chain project from Grupo House, through HSBC. Issuers not as far along, including Marnhos Infraestructura, Tres Marias and Geo Maquinaria, look likely set for November at the soonest, according to bankers managing them. Intermediaries also say that the first movers will get best terms, adding that supply of capital for such projects is fairly limited.