Category: Regions

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.

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.

Investors yanked $450m out of LatAm equity funds in the week ended July 16, driven by redemptions from Mexico equity funds amid concerns about the US economy and oil, according to EPFR Global. “Latin America equity funds have now posted outflows for six straight weeks, their longest losing streak since late 2Q06,” says the fund flows tracker. Overall EM equity funds lost a net $1.65bn, including an $801m exodus from Asia ex-Japan equity funds. This took YTD outflows over $14bn.

Ford Credit de Mexico has appointed Irma Garcia Martinez as its new finance director. She replaces Ruy Antonio Meirelles Dos Santos Filho – who will stay with the firm – and the appointment is effective immediately.

Goldman Sachs Infrastructure Partners – part of an equity consortium operating the first of Mexico’s Farac toll road concessions – is looking to takeout a $3.5bn MXP-denominated loan related to the project, say bankers close to the process. Proposals for a full or partial are heard due by the end of July, and likely to cover a range of financing solutions. A securitization of toll road revenues is among the most likely structures, for which the target buyer base would be Mexico’s Afores and other local investors, say DCM executives involved. “This deal is so big that any refinancing will have to rely on investors outside Mexico as well,” adds a local debt markets banker. The Farac facility is the largest local currency loan to date in LatAm and has been syndicated to a group of banks, some of which continue to seek buyers for their holdings in the secondary market. The 7-year mini-perm carries a cash sweep; meaning any and all revenues from the concession go toward interest payment. That reduces the amount of dividends equity investors Goldman and ICA, the Mexican infrastructure shop, can reap from their investment, according to a bank market executive. Goldman was not available for comment.

For Goldman Sachs and ICA, the possibility of issuing toll road revenue-backed paper in the local Mexican market on a large scale was confirmed by a June notes offering from Carlos Slim’s IDEAL, according to bankers familiar with both transactions. Mexican institutions gobbled up MXP7bn in asset-backed bonds issued across fixed, floating and UDI-denominated tranches, marking the largest MXP offer priced year-to-date. IDEAL scaled back its issuance from MXP11bn due to investors’ distaste for fixed-rate paper, but it did well on an all-in cost basis, say bankers. The issuer secured a MXP1.5bn 2015 floating rate tranche at TIIE plus 28bp, a MXP1.3bn 2036 fixed-rate piece at 10.50%, and a MXP4.3bn-equivalent UDI-denominated 2036 tranche at 5.69%. Plans for a takeout of the $3.5bn 7-year peso-denominated Farac loan are long overdue, according to several banks participating in the syndication. Lack of guidance from ICA and Goldman on timing of a takeout proved to be a source of frustration for some lenders. Santander, HSBC, Dexia and NordLB led the Farac loan.

Mexican infrastructure operator Pinfra is preparing to refinance debt tied to the Mexico-Toluca toll road concession, also known as Mextol. It plans to sell around MXP6.5bn-equivalent in 2030 bonds denominated in the UDI inflation-linked unit August 15. On the same day it will exercise a call option on the existing debt, MXP5.57bn-equivalent in 2030 UDI-denominated bonds issued in 2006. Holders will receive a call premium of 3.17%. The key to savings from the transaction, according to a banker managing the operation, is that existing debt includes both 5.00% senior debt and 8.85% mezzanine debt, which will be replaced with a single senior piece. The issuer is able to replace the debt at such as saving due to the fact that traffic has improved more than expected since 2006. Funds remaining after the repurchase can be used for additional construction. The bonds have yet to be rated, but the senior debt they replace was rated AAA on the national scale. ING is managing the transaction.