Amercia Movil plans to sell up to MXP6bn in 2013 bonds denominated in pesos and in the UDI inflation-linked unit. The transaction could come as soon as Wednesday, depending on regulatory approval. The issuer rated AAA on a national scale plans to use proceeds for working capital. Inbursa and HSBC will manage a peso-denominated transaction of up to MXP3bn, while Inbursa and Merrill Lynch will run a similarly sized UDI deal. Latin America’s largest wireless provider sold MXP2.5bn in 2018 bonds at 8.11% in March. America Movil has some $500m in maturities coming in the second half of this year and 2009.
Category: Regions
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Liverpool Brings Refinance
Mexican retailer Liverpool has priced MXP1bn in local 2018 bonds at par to yield 9.36%. The proceeds will repay MXP640m in short-term debt taken out this year and MXP392m in long term debt due in October. Banamex led the deal rated AAA on a national scale.
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Grupo Saltillo to Sell Houseware Unit
Mexico’s Grupo Saltillo has agreed to sell its Cinsa houseware unit to a group of Mexican investors for MXP600m. The buyers, who agreed to a price of 6.6x Cinsa’s MXP91m Ebidta, were not disclosed. The sale is part of Saltillo’s effort to focus its efforts on construction. Proceeds will pay down debt, reducing Saltillo’s liabilities by 22%. Seale & Associates advised Saltillo.
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Ortiz, El-Erian Join IMF Reform Panel
Mexico’s Guillermo Ortiz and Pimco’s Mohamed El-Erian have joined an IMF committee to assess the adequacy of the fund’s framework for decision making and advise on modifications. The fund has long been struggling to redefine itself, particularly as most EM nations no longer need its support. The panel is considering whether there is need to reform the institutional framework through which members’ voting power is actually exercised. The committee, chaired by South Africa FinMin Trevor Manuel, also includes: Michel Camdessus, Kenneth Dam, Sri Mulyani Indrawati, Robert Rubin and Amartya Sen. They are due to report findings by April 2009, with concrete proposals due the following September.
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Colombia Must Diversify Trade: Fitch
The approval of FTAs and regional blocs are important for Colombia as it needs to diversify trading partners, according to Fitch. “Institutionalization of Colombia’s trade and financial linkages as well as diversification of its export base across markets and products are needed for the country to sustain higher export revenues, foreign direct investment and productivity growth,” the agency says. “This would allow for a faster convergence of Colombia’s solvency ratios with those of higher-rated sovereigns, boost trend economic growth and improve fiscal sustainability and in turn benefiting Colombia’s creditworthiness,” Fitch adds. Colombia remains vulnerable to US economic slowdown and a decline in commodity prices, as almost 40% of exports are sold to the US and close to 50% of its export basket is based on primary products. “Colombian exports are increasingly sensitive to its relations with Venezuela and Ecuador, two countries with low credit ratings, heterodox policies and economic volatility,” adds Fitch. However, FTAs alone do not trigger an immediate upgrade in sovereign ratings or the granting of investment grade status, Fitch says. “Recent experiences of FTAs in the region, such as Chile and DR-CAFTA, demonstrate that countries do benefit from FTAs through both productivity enhancements and structural reforms, which can ultimately strengthen a sovereign’s creditworthiness,” the agency states.
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Cement Maker Underwhelms with Downsized Loan
Grupo Cementos Chihuahua (GCC) managed to close a 5-year loan it brought over the summer without changing pricing on the pricing, but it had to settle with 70% of the funds originally sought. The Mexican cement producer was seeking $200m but met resistance from a stringent lending community. It chose to close the facility, which pays Libor plus 125bp, at $140m. Bankers close to the deal say the tenor was difficult for Mexican corporates and pricing was not quite juicy enough to convince many participants. BBVA led, with ABN AMRO, Wells Fargo, JPMorgan, Barclays and EDC taking tickets of various sizes.
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Mexico Plans Urban Mass Transit Push
Mexico’s National Infrastructure Fund (Fonadin) is planning to launch a program to support the development of urban mass transit systems, such as buses, subways and commuter rails. “Fonadin will provide technical assistance and funding,” says director Federico Patino. He adds that Fonadin will be able to assist state and local governments with studies to determine the right type of project, as well as running bidding processes among private sector participants. It will also be available for equity investment and the guarantee of debt products. Patino says total size has not been set. The program has already identified more than 20 potential projects, and has selected four pilot ventures to test it. Among the first will be a BRT, or Metrobus, project in the city of Guadalajara – similar to the system running in Mexico City, which is modelled on those in Curitiba, Brazil. The program should be formally initiated within the month.
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Financiera Independencia Poaches from CS
Mexican microfinance lender Financiera Independencia has appointed Didier Mena Campos as CFO, replacing Juan Garcia Madrigal, who is leaving to pursue personal endeavors. Prior to joining Financiera Independencia, Mena was an MD at Credit Suisse where he was co-responsible for CentAm investment banking and certain financial institutions in Mexico, the company says. In June, Financiera Independencia landed MXP784m in 3-year local bonds, marking its first issuance of term debt.
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Mexican and Argentine Banks Fall Short
The only banks to do very badly in this year’s LatinFinance sustainable banking study in association with Madrid-based consultancy Management & Excellence (M&E) are Mexico’s Inbursa – part of Carlos Slim’s empire – with a very low CSR score, and state run Banco de la Nacion Argentina (BNA), which ranks very low for governance. BNA is the only bank to receive zero points in all areas of human resource compliance with international standards, including International Labor Organization guidelines and human rights policies. Inbursa comes in second to last and appears to be one of the few major financial institutions worldwide without any contact data for investors. According to M&E, sustainability is the best predictive instrument investors can get because it looks at systems which determine the numbers. And according to M&E, equity in companies rated highly for sustainability actually outperforms benchmarks. “If you want to know what is going to happen tomorrow in a company, look at its management systems, i.e. its sustainability,” says William Cox, managing director at M&E. “The best indicator of a company’s sustainability, not CSR, is a full ranking based on an internal audit.” Sustainability includes diverse practices like customer service, compliance with Basel capital accords, membership of sustainability initiatives, engagement in sound financial management and reporting, certified management processes, implementation of codes of ethics and environmental protection. (For the full report, see www.latinfinance.com)
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Su Casita Wants to Offer More Products
Su Casita has filed for a change of status that would allow it to offer a broader range of financial services. The Mexican mortgage lender would become a multiple purpose finance company, known as a Sofom, an upgrade from its current designation as a limited purpose company, or Sofol. The Sofom license would enable Su Casita to provide products outside of its core mortgage business, such as credit cards and personal loans. The change comes after majority shareholder Caja Madrid announced in July that it would buy the 60% stake it did not already own in Su Casita for $342m.