Cemex is preparing a domestic market securitization of accounts receivable at its Cemex Mexico and Cemex Concretos units. The details are still being hammered out, but the Cement maker is expected to offer MXP2.3bn 2011 bonds, according to an S&P report rating the deal AAA on a national scale. Bankers on the deal expect it in the coming weeks. It is the first such deal Cemex has done in the public markets. Ixe is managing the sale.
Category: Regions
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PRI Win Sends Mexico Markets South
The Mexican Bolsa is down 1.3% at 23,742 and the MXP weakened to MXP13.25 the day after opposition PRI emerged victorious at mid-term congressional elections, with about 40% of the national vote. Fitch believes the outcome of the Mexican mid-term elections could lead to reform inertia. Credit Suisse seems to agree, saying that president Calderon and his ruling PAN party will likely face a challenging battle in the lower house when trying to push through major reforms in the remaining term of this administration, as they will likely require an even larger degree of cooperation from the triumphant PRI than the shop had envisioned. Nevertheless, Fitch points out that with the PRI eyeing the 2012 election, limited cooperation on reforms cannot be ruled out, especially those that strengthen the fiscal base. However, the agency cautions that the PRI may not be ready to assume the partial political cost of reforming the tax system at a time of a deep domestic recession.
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Colombian Munis Prep “Water Bonds”
Colombia’s Grupo Financiero de Infraestructura is preparing to sell Wednesday up to COP187bn ($89m) equivalent in “bonos agua” on the domestic market, on behalf of a trust supporting a group of small municipalities. The 19-year notes will be denominated in the UVR inflation-linked unit and pay a fixed rate up to 8%. The issue is the first from a UVR2bn (about COP375bn) program, under which the country’s state and municipal level governments can access credit to fund water and waste improvements. In the transaction, structured by boutique Konfigura, 45 cities and one state will pledge future revenues to the trust to guarantee repayment of the bond. “The object is to extend credit to very small entities that wouldn’t normally have access to the markets,” Andres Florez, Konfigura partner, tells LatinFinance. He adds that the transaction is the first of its kind in Colombia, and modeled after similar structures in Europe and other regions. The idea is to have 1-2 bond issuances per year, he says, as well as add new governments to the trust. Corredores Associados is managing the sale.
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ICA to Break Ground in Mexican Equity
Mexican infrastructure developer is scheduled to price its share offering of 150m units on Thursday, reopening the long-dormant Mexican equity market. The company is raising the targeted MXP3.47bn ($262m) in cash to help finance the acquisition of new concessions. The 150m figure includes a 15% greenshoe option by underwriters Merrill Lynch and Santander. BBVA Bancomer is a co-lead on the local tranche. Some 91m ordinary shares are planned for the international offer and 39m locally.
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Peru Issues From Position of Strength
Peru has retapped its 2025 bonds for $1bn, following an announcement that it will make an early payment on Paris club debt to France and Italy. The BBB minus/Ba1 rated sovereign reopened the 7.350% notes at 103.827 to yield 6.950%, or UST plus 343.6bp. Guidance had been given at 7% area Monday morning, and the issuer built a $4.7bn book. The 2025 – originally offered in 2005 – was seen trading last week to yield around 6.7%, according to investors and bankers away from the transaction, indicating a reopening concession of about 25bp-35bp. A banker on the deal meanwhile spots it at 20bp. Peru opted to reopen the 2025s, rather than the 2019s sold earlier this year, as it was an issue originally used to pay Paris Club debt, say bankers on the deal, also highlighting the advantage of replacing euro debt due 2010-2015 with longer dollar debt. “Reaching longer may have been challenging but it was a measured extension that worked out well,” says a DCM banker away from the deal, noting the 16-year tenor – the longest LatAm deal so far this year – is good for the market. “Peru is issuing from a position of strength. It has done a good job preparing for a difficult period,” says a LatAm-dedicated investor who participated, calling the pickup to the existing bonds “decent, if not great.” JPMorgan and UBS managed the transaction. Peru sold $750m of the 2025s in July 2005 through JPMorgan and UBS, and added $500m in December through Citi. Peru’s government says it plans to pay France and Italy about $850m equivalent in mostly euro-denominated debt with the proceeds. Peru’s total Paris Club debt at the end of the first quarter was $3.89bn. Peru sold $1bn in new 2019s in March, marking its first cross-border sale in almost 2 years.
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World Bank Breaks LatAm Loan Record
The World Bank (WB) says it committed a record $17.1bn to LatAm and Caribbean countries in the financial year ended June 30, up 70% versus the previous fiscal year and a record-breaking amount. “Requests for assistance from the World Bank rose sharply this year, and we expect this to continue well into 2010, as the pace of recovery is far from certain,” says Bank president Robert Zoellick. The total includes a tripling to $14bn in commitments from the IBRD and IDA, mostly to Brazil, Mexico, Argentina, Peru and Colombia. The IFC doubled in FY09 the number of investments in the region, supporting 122 projects in 21 countries, with a contribution of $3.3bn, of which $775m was in syndicated loans. The IFC also doubled its trade finance guarantees to the region to $825m, while MIGA provided $33.9m in guarantees.
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Famsa to Raise Funds from Shareholders
Mexico’s Grupo Famsa plans to ask investors to approve a capital increase of MXP1.2bn at a July 17 shareholders meeting. The controlling shareholder of the retail and banking group has indicated his intention to contribute at least MXP600m in fresh capital during the 15-day subscription period. The starting date and pricing details will be unveiled after the shareholder vote. Proceeds would be used for working capital and to reduce debt. Famsa shares closed Thursday at MXP12.90.
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Mexican Lender Readies ABS
Mexican lender Consupago is set to sell Tuesday up to MXP1bn in bonds backed by a pool of consumer loans. The 2014 issue rated AAA on a national scale will pay a spread over the TIIE benchmark. The pool is composed of more than 62,000 loans given to government workers to make consumer purchases. Deutsche Bank is managing the sale.
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Emgesa Sells COP400m Bonds
Colombian generator Emgesa has sold COP400m ($191m) in bonds on the domestic market. The unit of Spain’s Endesa priced COP92.2bn in 2104 fixed-rate bonds at 9.27%, as well as COP218.2bn in 2018 bonds at the IPC inflation rate plus 5.90% and COP89.6bn in 2021 bonds at IPC plus 6.10%. The book reached almost COP950bn, according to brokers managing it. Citi, Correval and Corredores Asociados were leads on the transaction, rated AAA on a national scale. Other Colombian issuers in the pipeline include Grupo Financiero de Infraestructura and Banco Davivienda.
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China Development Bank Plans Rio Office
The China Development Bank plans to open a LatAm rep office in Rio de Janeiro, according to a statement from the state governor. The bank aims to open its office by the middle of 2010 and has expressed interest in investing in ports, steel mills, energy and projects related to the 2014 World Cup soccer tournament in Brazil, as well as Rio’s bid for the 2016 Olympics. The Chinese government-backed lender has this year agreed to lend up to $800m to BNDES and $10bn to Petrobras.