Category: Regions

Fitch has placed Mexican home appliance manufacturer Mabe’s BBB minus rating on watch negative, including senior notes due 2015. The action reflects risk and uncertainty following the recent announcement from GE, its major stockholder that it is reviewing strategic options for its appliances business, which include a strategic partnership or joint venture, spin off or sale of the business. Last week S&P also placed Mabe on credit watch negative. Meanwhile, GE chief executive Jeffrey Inmelt has named Mabe as one of the potential buyers of its appliance business, wires report.

Mexico’s Banorte plans to sell about MXP3bn of tier-2 subordinated debt, followed by a state and municipal debt securitization to the tune of MXP5.5bn later in the year, investor relations officer David Suarez tells LatinFinance. A roadshow for the sub-debt is planned for June, with Banorte’s own DCM desk handling the sale. Suarez says the issue will likely be a 10-year non-call 5 and is hoping for pricing of 50bp-100bp over TIIE. Banorte, Mexico’s fifth largest bank and the only large locally owned financial institution, sold MXP3.6bn in 10 and 20-year bonds in a similar deal in March, pricing a 2018 tranche at 60bp over 28-day TIIE. Suarez says the upcoming deal will likely price wide of that. “Conditions were much better in March, because there were expectations that rates in Mexico were going to come down,” he says. “The yield curve has shifted upwards and the long part of the curve is more expensive now,” he says. “It’s probably going to be a higher interest cost, but it’s still going to be below the average for Banorte’s cost of capital.” Suarez says the debt sale will be tier two because the bank’s tier one window is almost full. There is no date set yet for the state and municipality debt securitization.

As anticipated, Pemex has returned to market for a total of $1.5bn in funds. The Mexican state-owned oil producer reopened $1bn of its 5.75% 2018 notes at 99.83 to yield 5.77%, or UST+175bp, after providing guidance of 175bp-180bp earlier in the day. It also priced $500m in new 2038 bonds at 99.699 with a 6.625% coupon to yield 6.640%, or UST+195bp, deciding against a reopening of its 2035s. The two tranches combined saw about 2x oversubscription, according to a banker managing the sale, with demand skewed toward the 2018. The 175bp spread was much tighter than other Triple Bs issuing Wednesday, including BNDES at 237.5bp, bankers note, perhaps limiting demand. Proceeds will go towards Pemex’s investment plan, which calls for raising $5bn this year, including $2bn in the local and international bond markets. HSBC, JPMorgan and Lehman Brothers managed the 144a sale. Pemex originally sold $1.5bn of the 2018 through Credit Suisse, Deutsche Bank and Merrill Lynch in October.

Singapore sovereign wealth fund Temasek Holdings has hired a former Barclays executive to head its Mexico office as it aims to boost investments in Latin America, according to Reuters, which cites a company statement. Lorenzo Gonzalez Bosco will be managing director for Mexico investment, while the fund, which manages over $100bn, will also relocate Alan Thompson, its LatAm investment MD to Sao Paulo later this year, according to Reuters. The fund is focused on Asia but reportedly sees long-term potential and attractive investment prospects in LatAm.

This week’s purchase of a 20% stake in Mexico’s Grupo Financiero Inbursa by Barcelona-based investment group Criteria CaixaCorp is more a play on North America than the start of a LatAm push, according to a spokeswoman at the acquirer. The Spanish group is focusing its expansion strategy on Central Europe, Asia, and North America which it sees including Mexico through its membership of the NAFTA. Criteria will issue new shares in a capital increase and launch a public bid for GFInbursa shares at MXP38.5 per share for a total investment close to EUR1.5bn, it says. The investment will be financed with bank debt, Criteria says. The transaction is subject to the ratification of the board and shareholders of GFInbursa, as well as Mexican and Spanish regulators, but expected to close in November. Mexican billionaire Carlos Slim and family will maintain majority ownership of Inbursa, says Criteria.