Mexican infrastructure operator Pinfra has delayed a MXP6.5bn securitization to refinance debt tied to the Mexico-Toluca (Mextol) toll road concession which had been set to price today. “It has been postponed, but the structure hasn’t changed, it’s still in the market,” Pinfra CFO Carlos Cesarman tells LatinFinance. He adds that the delay was caused by regulatory issues remaining to be straightened out, rather than external problems or choppy market conditions. ING is managing the transaction, which coincides with widespread volatility that has made investors much more selective and vigorous in their credit work. In addition, Banxico meets Friday, and analysts expect another 25bp hike. Local investors are still cash rich but they want higher returns to cover the uptick in risk, particularly for structured products, where “back to basics” is the mantra. Borrowers generally have been unwilling to concede sufficient spread. Pinfra had planned to sell around MXP6.5bn equivalent in 2030 bonds denominated in the UDI inflation-linked unit to replace some MXP5.57bn in UDI bonds issued in 2006. Funds remaining after the repurchase can be used for additional construction.
Category: Regions
Posadas and LaSalle Team Up for Hotels
Real estate player LaSalle Investment Management has signed a pact with Mexico’s Grupo Posadas to invest $60m in the development of eight of Posadas’ Fiesta Inn and One hotels. Under the terms of the agreement, Posadas will build and operate the hotels. In July, Grupo Posadas placed MXP750m in 2013 to yield TIIE+190bp. The issue was a retap of a MXP1.5bn deal sold in April to help fund the repurchase of dollar bonds.
Bolivia Not Affected by Referendum: Fitch
Ratings on Bolivia will remain unchanged after the referendum last Sunday, according to Casey Reckman, an analyst with Fitch. “The outcome from the referendum doesn’t necessarily resolve anything and doesn’t really change our view, because we already incorporate the general ongoing political instability in our current rating level,” she adds. “On the other hand, an easing of social tensions which results in improved governability, along with continued macroeconomic stability, could benefit Bolivia’s credit fundamentals,” Reckman says. Boosted by his victory at the polls, president Evo Morales announced yesterday that the country is seeking investors for two big gas fields in the country. Fitch currently rates Bolivia B minus, with a stable outlook.
Gold Fields to Invest $800m in Peruvian Mine
South African miner Gold Fields plans to invest $800m in the Cerro Corona gold mine located in Cajamarca, Peru’s state owned news agency Andina says. The mine is expected to produce 356,000 ounces of gold during the first year of operation and 375,000 the year after, Andina adds.
CS Frets Over Vene Solvency
Credit Suisse is recommending flat positions in Venezuela bonds after a decline in oil prices which could undermine the Andean nation’s solvency. The shop says it is cutting losses on a June 8 recommendation of long positions in sovereign 2023s hedged with 5-year CDS. “Our main argument for extending duration in Venezuela was the benefit the external and fiscal accounts would derive from the strength of global oil prices. The recent sharp drop in commodity prices has come at an inopportune time for Venezuela,” says the shop. After November 23 state and muni elections, Chavez aims to revive the constitutional reform process and boost the state’s presence in the economy. “The current oil price remains well above the 2007 average, and is still supportive of Venezuela’s external and fiscal accounts. However, new economic policy initiatives, lower growth and persistently high inflation are likely to raise the oil price threshold at which investors start being concerned about medium-term solvency in Venezuela,” says the shop. Credit Suisse recommends unwinding exposure to Venezuela, but still tips a short position in Ecuador 2030s versus short 10-year CDS in Vene. “The impact of a further potential fall in oil prices would likely be more pronounced on Ecuadorian asset prices,” says the shop.
Coeur d’Alene Appoints New Head
Idaho based silver and gold producer Coeur d’Alene Mines has appointed Humberto Rada president of its Bolivian subsidiary, Empresa Minera Manquiri, and of Coeur South America. Rada, president of Bolivia’s national mining association, was most recently general manager of Empresa Minera Inti Raymi, a Bolivian subsidiary of Newmont Mining, Coeur says. The company recently began operations at its new San Bartolome silver mine, located in Potosi, Bolivia, which is expected to produce 3.2m ounces of silver this year and approximately 9.0m ounces in 2009, the company adds.
ICA Bags Convention Center, Tarmac Projects
Mexican construction conglomerate ICA has won a bid for the construction of the San Luis Potosi convention center and revamping of tarmac at the Mexico City airport, for a total of MXP642.6m. The convention center will cost MXP428.6m and is expected to be executed in a year, while the tarmac project will cost MXP214.0m and will be ready in four months, ICA says. In July, a consortium composed of ICA, French company Alstom and local CICSA signed a contract with the transit authority of Mexico City to supply and install the electromechanical equipment for line 12 of the city’s metro system, at a cost of EUR330m.
Venezuela and Iran Cement Bolivia Deal
Bolivia has signed an agreement with Venezuela and Iran for the creation of a national cement company with an initial investment of $225m. Cementos de Bolivia is expected to produce 700,000 tons per year of cement and the first two plants will be located in the cities of Oruro and Potosi, the Bolivian government says.
Liverpool Eyes MXP Debt
Mexican retailer Liverpool is planning to sell up to MXP1bn in fixed or floating rate peso-denominated bonds, according to regulatory documents. It does not communicate the maturity or expected sale date. Proceeds will be used for working capital and general corporate purposes. Banamex is managing the sale. Liverpool last hit local markets in December, raising MXP4bn in 2014 bonds at TIIE plus 4bp via Banamex and HSBC.
S&P Gets Negative on Nemak
S&P has revised the rating outlook on Mexico’s Nemak to negative from stable. The agency is concerned by the high debt levels the auto parts maker maintains amid a deteriorating global auto industry. Its A+ national-scale rating could be lowered, it said, if Nemak’s debt-to-EBITDA ratio – now at 3.9x – remains above 3.3x for the next year, or if its operating cash flow becomes negative.