Category: Regions

As expected, Mexico’s central bank cut its monetary policy rate by 25bp to 4.5%, but analysts are divided on the need for further loosening. The bank says it is pausing the easing cycle and that future actions will be in line with the balance of risks for activity and inflation, with the latter targeting 3.0% by the end of 2010. Goldman Sachs believes that choosing to pause is better than concluding the easing cycle. “In our opinion, the recession will prove deeper than expected, therefore inflation is likely to continue to decline toward 4% by end 2009, thus enabling Banxico to resume modest easing in 3Q2009,” Goldman says. In Credit Suisse’s view, “additional rate cuts would materialize only if 12-month inflation came in below the low end of the central bank’s inflation forecasts for upcoming quarters (4.75% for 3Q and 4.00% for 4Q), which we view as improbable.”

Mexichem plans to sell up to MXP153.6m new shares to pay down debt and obtain working capital. The Mexican petrochemicals maker’s shareholders will vote on the sale August 3. If the maximum amount were sold at Friday’s closing price of MXP16.13, the transaction would raise MXP2.47bn.

Shareholders in Mexico’s Grupo Famsa approved a capital increase of MXP1.2bn at a Friday meeting. In a filing, Famsa says it will issue 109.1m new class A common shares at MXP11 each. The controlling shareholder has agreed to buy half of the new shares, while the other half will first be offered to the other existing shareholders, the company said. Famsa said earlier this month that proceeds of the capital increase will be used for working capital and to reduce debt. The A shares closed at MXP15.36 Friday.

Ideal has filed for a new securitization of toll road concessions, in a follow-up to a MXP7.1bn transaction it brought last year. The Mexican builder and concessionaire controlled by Carlos Slim is preparing a less ambitious deal of up to MXP2.4bn through a combination of UDI and floating-rate MXP-denominated bonds due 2019, the second piece of a MXP50bn program. A roadshow should start as soon as this week, says an official familiar with the offer. As in last year’s successful transaction, the bonds will be backed by revenues from the Champa-La Venta, Libramiento de la Ciudad de Toluca, Tijuana-Mexicali and Tepic-Villa Union toll roads. The trust holding the concessions represented an innovation for Mexico in that new roads may be added to it, though none have yet. Last year’s leads Inbursa and Credit Suisse are back in the driving seat and a deal is expected as soon as late August. A recent MXP2.2bn 2-year deal from Cemex has offered hope that Mexican investors may be ready again for ABS. However, Ideal is more conservative on tenor this time, and it is scaling back the tenor to 10 years and leaving tranche allocations to be decided on the day of sale. Last year, it sold 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%.

Mexico cable operator Megacable says it named Alonso Andrade as its new CFO and administrative officer after Cesar Lau resigned from the post effective July 30 following 12 years with the company. Lau, who worked on the company’s IPO and several acquisitions in recent years, will pursue other projects, says Megacable. Andrade, the new CFO, was formerly finance chief at Perot Systems Services of Mexico for more than 2 years. He had also held positions at Servicios Financieros Integrales, Grupo Mezgo, and Carterpillar Financial, among other institutions. Alonso Andrade has an accounting degree from Universidad La Salle and earned an MBA from Instituto Tecnologico y de Estudios Superiores de Monterrey, and has an advanced management degree from Instituto Panamericano de Alta Direccion de Empresas.