The Mexican government has awarded three concessions totaling MXP8.22bn to complete the final 74km section of a highway connecting Mazatlan and Durango. A consortium led by Mexican construction firm Omega won the biggest piece, a MXP3.97bn contract for a 46km stretch that is to include 26 tunnels and 14 bridges. An 18km stretch with 16 tunnels and 12 bridges went to a consortium made up of Spain’s FCC and Mexico’s La Peninsular Compania Constructora for MXP2.19bn. Mexico’s Tradeco got the last piece, a MXP2.06bn award to build 10km. The contracts will be financed through the Fonadin national infrastructure fund, and work must be completed in 3.5 years. The government claims the Mazatlan-Durango highway is the largest public road project in the history of Mexico.
Category: Regions
Sigma Prices MXP1.5bn Bond
Food producer Sigma Alimentos has priced MXP1.5bn in fixed-rate 2018 bonds denominated in pesos and the UDI inflation-linked unit. A MXP1bn peso tranche priced at 10.25%, representing a spread of 117bp wide to comparable MBonos. Pricing came within the initial guidance of 115bp-120bp. A MXP500m-equivelant UDI piece priced at 5.32%, representing a spread of 110bp wide to MBonos, within expectations of 110bp-115bp. The book size reached MXP2.1bn, according to a banker managing the sale. With the proceeds, Sigma will repay MXP1bn in 8.8% local bonds coming due, and additional bank debt. Banamex managed the transaction, rated AA+ on a national scale.
Peru’s TGP Seeks Long-Dated Loan
Transportadora de Gas del Peru (TGP) is heard seeking new funds to help improve and expand its pipelines near the Camisea gas fields. The company has put out an RFP seeking $150m in 10-12-year financing, say loan bankers. TGP is heard to have originally considered the local bond market, but has now focused on the international syndications market. The pipelines will connect the Camisea field to the Peru LNG pipeline being built with newly obtained funds in the loan and project markets.
Su Casita Could See Upgrade: S&P
S&P has placed Su Casita on credit watch positive following the news that Spanish Bank Caja Madrid is set to acquire 100% of the Mexican mortgage lender. Su Casita’s 70% compounded average growth over the last six years has put pressure on its capitalization, says S&P analyst Francisco Suarez. “Reducing funding costs is crucial for the overall competitiveness of the entity,” he says. “Any additional capital would be a help.” However, no rating action will be made until the transaction is approved and the two sides communicate the financial and strategic implications of the deal. Su Casita is rated BB, and A on a Mexican national scale.
Millicom Buys CentAm Telecom
European wireless operator Millicom has purchased Amnet, the Salvadoran broadband, telephone and cable operator for $510m. Amnet provides broadband, corporate data, telephone and cable services in Costa Rica, Honduras, Guatemala, Nicaragua and El Salvador, and has an over 350,000 customers. Its revenues in 2007 were $147m, according to Millicom. The Luxemburg-based company bought Colombia Movil, or OLA, for $479m in 2006 and also has a mobile phone business in Central America, where it operates under the name Tigo.
Bancomer Readies MXP Tier 2 Bonds
Mexico’s BBVA Bancomer plans to sell up to MXP5bn in 2018 subordinated bonds as soon as Thursday, according to regulatory documents. The bonds are rated AAA on a national scale and will pay interest over 28-day TIIE. Proceeds will be used to strengthen the Tier 2 capital base. BBVA has has placed almost MXP20bn of its own bonds RMBS this year, making it the largest issuer in Mexico’s domestic market, according to Dealogic. This will be its first MXP Tier-2 issue this year. BBVA’s own capital markets unit will lead the transaction.
Outotec Inks SPCC SX/EW Deal
Outotec has agreed with Southern Peru Copper Corporation (SPCC) for the delivery of a copper solvent extraction and electrowinning plant for SPCC’s Tia Maria project in Arequipa region in Peru. The $150m contract covers basic and detail engineering, proprietary equipment and services for the construction supervision and commissioning. The Tia Maria project includes development of a new processing unit and when completed in 2010, it is expected to produce 120,000 tons of copper cathode per year.
Analysts Tip Ecuador Bonds
Ecuador may continue to generate headline risk as the government works to change the constitution, but investors who do not expect an oil price collapse should see juicy returns. “With sovereign debt to GDP ratio dropping and oil revenues going through the roof, the chances of default while oil stays over $100 (or maybe even $80) are precisely zero,” says Hallgarten in a sovereign bond relative value analysis. “Right now, the Ecuador election-to-come puts me off owning its debt. Once the air has cleared in October, Ecuador paper should be a worthy addition to any LatAm portfolio,” adds the shop. Ecuador yields 4.5% per annum more than Peru, for example, according to Hallgarten, which sees little value in other LatAm sovereigns. Merrill Lynch meanwhile tips Ecuador sovereign 2015s and 2012 in its external debt long only portfolio, though it warns that the road between now and the referendum for a new constitution may prove bumpy. “We still remain positive that Ecuador will meet its debt obligations, thus we see recent politically-led sell off as temporary. Additionally, the credit is supported by good technicals and the 2012s have one of the highest carry of all sovereigns and are likely to get called early,” says the shop.
Caja Madrid Buys Up SuCasita
The board of Spanish bank Caja Madrid has approved the purchase the 60% of Mexican mortgage lender SuCasita that it did not already own for $342m, according to Spanish and Mexican press reports. The shop has placed MXP2.5bn in RMBS and construction bridge loans in the Mexican local DCM market this year. The acquisition is a part of Caja Madrid’s international strategy, which also includes the purchase of 83% of Florida-based City National Bank in April for $1.12bn.
Pinfra Wins Tlaxcala Road Concession
Mexican infrastructure operator Pinfra has won a 30-year concession to build, operate and maintain the MXP650m Tlaxcala-Xoxtla highway, the company says in a filing with the Mexican bolsa. The 16km highway will cut travel time between the two cities by 20 minutes, Pinfra says. In June, Pinfra won a concession for the MXP2.7bn Atlacomulco-Palmillas highway, north of Mexico City.