Category: Regions

Agropecuaria Santa Genoveva (AGSA) has placed a MXP1.65bn in 2028 securities backed by future flows from wood sales. In what bankers claim to be a novel transaction for the Mexican market, AGSA will pay holders 40% of the revenue from its sales of teak wood, a specialty product used in building outdoor furniture. That is a different pricing method than the traditional yield or coupon format. In the transaction, approximately MXP400m of the proceeds will be used to purchase zero-coupon government bonds that will be worth MXP1.65bn in 2028, which will go toward repaying principal. The remaining MXP1.25bn will be used to expand AGSA’s asset base, with new teak tree acreage going into the existing trust along with the assets at the time of issue. The quasi-equity nature of the deal is important for the issuer’s business plan, as most of the trees in the trust have yet to be planted. The teak trees involved take 18-20 years to reach maturity. AGSA expects sales revenue to approach MXP6bn by 2027, up from MXP100m in 2007, according to a regulatory filing. Demand for the deal matched the issue size of 1.65bn, according to a banker involved in the transaction. The issue was placed exclusively with pension funds, and was designed with the pension regulator’s ABS guidelines in mind. The transaction was rated AAA, based on the use of the government bonds to guarantee repayment of the principal. Credit Suisse managed the sale.

Moody’s has downgraded Mexico’s Libramiento de Matehuala toll road national scale rating to Aa2.mx from Aaa.mx and placed the rating under review for further downgrade. The global scale local currency and underlying ratings remain Baa3. The downgrade follows the recent downgrade of the project’s global scale rating to Baa3 from A2. The review will consider the expectations for the project’s future financial and operating performance in light of recent historical results and how the project compares to other Baa3 rated toll roads in Mexico. Another important factor is whether the downgrade of the project ‘s insurer XL to B2 from A2 could have any direct impact on the underlying credit profile. Libramiento Matehuala is a 14 km long toll road built as an alternative to Boulevard Matehuala, which bisects the city of Matehuala, Mexico.

Oceanografia, a Mexican marine-contractor, squeezed out a $335m high-yield bond Wednesday, defying a hostile market that sent at least one other issuer home empty-handed. The company placed the 11.25% 2015 NC4 bond at 98.814 to yield 11.50% with a handful of accounts, many of them risk-hungry hedge funds, according to one buysider who did not participate. The B+ 144a Reg S offering is the first dollar bond for the contractor, which is highly dependent on Pemex. Bankers away from the deal commend Oceanografia’s ability to get its deal done, but note a Mexican B+ should command a tighter spread, all other things being equal. Initial guidance was heard inside the 11.50% launch level. One buysider says EM new issues have more often than not performed poorly lately, owing to poor placement and pricing. Proceeds will go toward paying down maturing loans. Morgan Stanley managed the sale.

Mexican mining conglomerate Penoles clinched a $530m dual currency facility to replace two classes of privately-placed notes. The 3-year bullet loan includes a $455m facility at Libor plus 85bp out of the box, and a $75m peso equivalent with the same spread over 28-day TIIE. The margin is on a leverage grid that varies between 75bp and 145bp, and the company’s leverage today is at 2x, says a banker on the deal. The notes the company took out were issued in 1997 and 2006, and carry coupons of 8.39% and 6.55%. JPMorgan led the syndication but took an MLA title alongside BBVA, BofA, Standarch Chartered, Sumitomo Mitsui, EDC, BNP, SocGen, Scotia, Bank of Tokyo Mitsubishi, Intesa, HSBC, Santander and ING. No league table credit was assigned for the deal.

Mexican maritime logistics provider TMM has placed the third service contract securitization from its MXP9bn program. In the largest issue to date from the program, it priced MXP4.39bn in 2028 ABS at the TIIE plus 219bp. The notes, rated AA on a local scale, are backed by receivables from TMM’s service contract. Value Casa de Bolsa managed the transaction. The issue follows a similar MXP1.55 2028 placement in May which priced at 195bp.