Mexico plans to tap local debt markets to maintain development of its minerals and metals sector, the government’s mining chief tells LatinFinance. The Fideicomiso de Fomento Minero (FIFOMI) aims to make loans to support the mining sector totaling $500m equivalent this year, rising to $1.1 billion by 2012, says Norberto Roque, Mexico’s mining coordinator. It will source extra funds from domestic capital markets. FIFOMI recently did a MXP300m issue of short term certificados de credito, through Scotiabank. “Next year, we’ll do not just certificados de credito, but a securitization of the portfolio,” says Roque. In 2009, FIFOMI is planning to place structured bond issues of MXP500m-MXP1bn in size with a 3-5-year tenor, market conditions permitting. “Depending on the demand for our credit, we need to be parri passu with the issuance,” says Roque. Loans of some $680 million are planned for 2009. Roque adds that the domestic debt deals will not carry a government guarantee. “Since the government is not putting in money, we’ll use the markets to get liquidity for the fund to be able to lend more,” says Roque. FIFOMI lends to mining SMEs – including operators, equipment providers and other support companies – with a view to strengthening the supply chain. Loans are for a tenor of up to 5 years and an average size of MXP1m, priced basis TIIE. FIFOMI has lent over $300m so far this year to SMEs and Roque describes the loan portfolio as “healthy” with no problems.
Category: Regions
Cement Maker Shops Short MXP Bond
Cemex plans to sell up to MXP2bn in 2010 floating-rate notes in the Mexican market as soon as September 24. Proceeds from the deal rated A+ on a national scale will repay short-term bank credit paying Libor+35bp that was used to refinance debt. HSBC is managing the transaction. The sale would be the 10th from a MXP30bn shelf, and follow a MXP1bn 2010 bond priced in April at TIIE+36bp via ING and Santander. The choice of such short tenors for such a respected name highlights the reluctance of the local buyside to take on any long term commitments in the current choppy market.
Panama Canal Gets Pre-emptive Rating
Moody’s has assigned a prospective rating of A2 to the approximately $2bn in senior debt expected to be issued by the Panama Canal Authority (PCA) to fund its expansion program. The rating for the wholly-owned unit of the Ba1 rated government of Panama is supported by the canal’s position as a unique infrastructure asset that is competitive and unlikely to be replicated, says Moody’s, which also lauds an exceptionally strong operating position. The $5.25bn 5-year construction will be executed through a series of contracts for excavation, dredging and other discrete components. The most complex segment, the construction of the third set of locks, will be undertaken through an all-in design-build contract which is expected to be awarded in December at the earliest. The PCA plans to borrow $2.25bn to fund the project, with the remainder coming from revenues. It has not made any firm decision on debt financing, but has received more than $2.25bn in loan offers from multilateral banks, including $500m each from the IDB and IFC. Assuming it stays on budget – far from certain in a deal of this scale – PCA may not need the rating.
America Movil Calls on Locals
Mexican telecom America Movil scored MXP5.1bn in new debt in the local market Wednesday raising 5-year paper across two tranches. The deal was printed amidst turbulent external market conditions that saw Telemar pull its $1.5bn offering of 5- and 10-year notes. A MXP3bn tranche of 2013 notes via HSBC and Inbursa came at Cetes plus 55bp, a handful of basis points wider than expected, say bankers on the deal. A second 5-year UDI-denominated tranche via Merrill Lynch and Inbursa worth MXP2.1bn came at 60bp over the 5-year udibono, with an all in cost of 4.10%. “The company is always very price sensitive, so it chose to raise slightly less in UDIs to secure the 60bp spread,” notes one banker close to the deal. Still, bankers say the amount of total proceeds is in line with the MXP5.0bn America Movil was hoping to secure. The 50% oversubscription for the UDI tranche and the 30% in additional MXP orders indicate demand was sufficient to close the deal. America Movil returned to the local market to secure shorter-dated paper because of volatile conditions in the dollar market, say bankers. The company, rated AAA on a national scale, is among LatAm’s most seasoned borrowers. It plans to use the proceeds for working capital.
Mediterraneo Moves on Mexican Lender
Privately held Mexican mortgage lender Credito Inmobilario is set to sign an agreement that could lead to a sale of a stake in itself to Spain’s Credito Ahorros Mediterraneo, Gerardo Tarras, Inmobiliario’s CFO, tells LatinFinance. The initial pact, to be announced within a week, will involve Inmobiliario managing some of Mediterraneo’s operations in Mexico, says the executive. But Mediterraneo may also end up purchasing a stake in Inmobiliario by the end of the year or later, adds the CFO. The lender is controlled by GMAC-RFC Mexico and a group of private investors led by Gerardo Sierra, who purchased 55% of the lender for MXP924m in 2005. Inmobiliario attained Sofom status in 2006.
Mexican Bolsa to Sign Chile Link
The Bolsa Mexicana de Valores (BMV) is signing a trading link up with Chile’s bolsa this week, BMV president Guillermo Prieto Trevino tells LatinFinance. Prieto adds that the BMV does not expect to be acquired by the Bovespa, which is seen more as a partner than a competitor. Large non-Latin exchanges looking to establish a foothold in LatAm are more likely to be eyeing the BMV as a target, says Prieto.
Moody’s Gives Bancoppel Thumbs Down
Moody’s has downgraded Mexican retail bank Bancoppel’s rating to Ba3 (stable) from Ba2. Its long-term local scale rating was also knocked down to A3.mx (stable) from A2.mx, says the agency. The downgrade is based on the relative difficulty the bank’s parent, retailer Coppel, would have in supporting it as the corporate entity undergoes reorganization, adds the agency.
IIRSA 5 Bonds on Deck
Ecuadorian concession operator Hidalgo & Hidalgo, through its Peruvian subsidiary CASA, is preparing to launch $260m in bonds to finance the fifth and final leg of Peru’s Interoceanica highways, or IIRSA Tramo 5. Through the Interoceanica V Finance vehicle it will sell $85m in 2020 bonds, $100m in 2030 bonds and $75m in 2030 zero-coupon notes. The deal features the basic characteristics of the CRPAO structure, in which Peru’s government guarantees payment on notes issued from a trust. Fitch rates the bonds BBB minus, BNP Paribas is leading the deal, having structured previous financings for Peruvian toll roads. The transaction is heard to include novel features like a delayed draw, which adds flexibility to the borrower’s access to funds. In a typical CRPAO structure, notes are issued from a trust and proceeds sit in a remote vehicle, which feeds cash in increments to the concessionaire as it meets construction milestones.
Chile’s Molymet Preps MXP Bonds
Molymet is preparing to sell MXP1.5bn in 2018 peso bonds as soon as today, according to a regulatory filing. The company had considered issuing a MXP500m tranche denominated in the UDI inflation-linked unit, but has apparently opted for straight MXP notes. The metals processor plans to use proceeds to repay two export loans due Wednesday: a $147m loan from Banco de Chile that pays 3.36% and a $46m loan from Scotia at 3.23%. The transaction is to be the first sale of bonds in Mexico by a Chilean company, according to Dealogic. The issue is rated AA by S&P and AA+ by Fitch, both on a national scale. Banamex is leading the offer. Santiago-based Molymet operates a molybdenum processing facility in Cumpas, Sonora, in northwestern Mexico.
Su Casita to Retap Bridge Loan Bonds
Mexican mortgage lender Su Casita plans to sell MXP500m in 2014 bonds backed by construction bridge loans. The deal is be a retap of a MXP1.2bn offering in March. It will add MXP425m to a MXP1.13bn tranche which priced in March at TIIE plus 120bp, and MXP75m to a MXP197m subordinated tranche, also done in March at TIIE plus 160bp. Proceeds will fund Su Casita’s mortgage loan business. Ixe, bookrunner on the original, is managing the new sale, expected this month.