State of Mexico has wrapped up the final phase of a MXP25.2bn refinance which extends duration and slashes the price on 87% of its debt. The amortizing deal in 20, 25 and 30-year tranches, with roughly a third of the amount in each, has an average duration of 12.5 years. The weighted average spread is 47bp over 28-day TIIE versus a 170bp spread before the refinance, says Francisco Gonzalez, head of the state’s project finance department. This equates to 9.02% after a swap to fixed rate. “It speaks to the liquidity that is still available in Mexico,” Gonzalez tells LatinFinance. “We have minimized our refinancing needs,” he adds, saying that the state is unlikely to return to market short term for any large transactions. The deal benefits from significant ratings upgrades – including 6 notches from Moody’s – and market improvements since the new administration took over in 2005. Structural enhancements pushed it to AA+ on the local scale. For the first time, Banobras provided a first loss guarantee, for 27% of the deal. Typically the government development bank acts as a lender. The transaction also has a pledge of federal revenue shares and was self syndicated by State of Mexico. Eight banks participated: Dexia (MXP7bn), Bancomer (MXP6bn), Banamex (MXP5.2bn), Banorte (MXP3bn), HSBC (MXP1.5bn), Santander (MXP1.4bn), Interacciones (MXP590m) and Inbursa (MXP500m).
Category: Regions
Moody’s Upgrades Mexico’s Xignux
Moody’s has upgraded Mexican holding company Xignux to Ba2 from Ba3, as well as its $11m in 9.5% senior unsecured global bonds due 2009 to Ba3 from B1. The rating is stable and the upgrade reflects the company’s improved profitability and credit metrics. Moody’s also sees solid near term performance expectations, despite a relatively challenging economic environment. Xignux has operations in the foods, electricity and auto sectors.
S&P Puts Mabe on Watch Negative
S&P has placed its long term BBB minus rating on Mexican home appliance maker Mabe pn credit watch negative. The move follows the decision by GE, its major stockholder, to consider strategic options for its home appliances divisions, including the possibility of a sale. GE controls 48% of Mabe and its involvement is considered a key factor in Mabe’s rating, S&P says.
Ideal Readies Novel Master Trust Securitization
Ideal, the Construction and Engineering firm controlled by Carlos Slim, is preparing to issue up to MXP11bn in bonds backed by future flows from a package of four toll roads. The issue will feature 2015 and 2036 fixed or floating-rate peso-denominated tranches, and a 2036 fixed-rate slice denominated in the UDI inflation-linked unit. The master trust includes the Champa-La Venta, Libramiento de la Ciudad de Toluca, Tijuana-Mexicali and Tepic-Villa Union roads. It is the first master trust in the Mexican market structured so additional roads can be added at a later date, according to a banker managing the transaction. The offer is expected in June. Credit Suisse and Inbursa are leading.
Bandes buys Bolivia’s Prodem
Venezuelan state owned development bank Bandes has acquired Bolivian microfinance bank and fund Prodem. Full price of the transaction was not disclosed but the Venezuelan bank paid BOB408 per share ($56) Prodem’s new general manager Bladimir Reveron tells LatinFinance. The Venezuelan bank aims to bring Prodem’s expertise in microfinance to Venezuela, Reveron says, as it eyes the opening of offices of the Bolivian bank in Venezuela. Prodem has 92 offices in Bolivia, as well as 250,000 clients and 1000 employees, according to its website. Bandes already has retail operations in Nicaragua and Uruguay, Reveron says.
LatAm, Caribbean See Record FDI
LatAm and the Caribbean received a record $106bn in FDI last year, according to the UN’s economic commission for the region, ECLAC. The figure is the highest since 1999, when investment totaled $89bn and flows were linked to privatizations, the commission says. The main recipient of investment in 2007 was Brazil, with $34.6bn, followed by Mexico with $23.2bn and Chile with $14.5bn. The leading foreign investors in LatAm in 2007 were the US, Spain and the Netherlands, ECLAC says. On a separate note, the multilateral estimates economic growth for LatAm and the Caribbean will be 4.7% in 2008, as deceleration of the world’s economy will have a limited impact.
Ixe in Talks on GMAC Mexico
Mexico’s Ixe Grupo Financiero is in preliminary discussions with Residential Capital to purchase mortgage lenders GMAC Hipotecaria and GMAC Financiera. To keep up with the country’s larger banks, it is looking to expand in a growing Mexican mortgage sector that has largely been free of the problems plaguing lenders north of the border. Ixe has not yet determined the final terms and conditions.
Colombia’s Davivienda to Start Subordinated Sale
Banco Davivienda is selling through June 12 up to COP100bn ($53.3m) in 2015 subordinated bonds denominated in pesos and UVR inflation-linked units. The amount of each type was not specified, but both will pay spreads of 665bp over UVR. The AAA rated issue is part of a COP300bn shelf opened in February with the placement of COP200bn. The bank’s own brokerage unit is managing the transaction.
Colombia’s Benchmark Rate Likely Unchanged: GS
Colombia’s central bank is expected to leave its policy rate unchanged at 9.75%, according to Goldman Sachs, as indicators of activity show an unexpectedly large deceleration of activity in March and inflation accelerated in April. “This should lead to a steep yield curve as the small probability of a hike within the next 3-6 months should be priced out of the curve and replaced by an eventual small probability of a cut,” the shop adds. The Colombian central bank should remain concerned and vigilant on the inflation dynamics as the economy continues to grow at an above-trend pace, Goldman says. Core non-food inflation accelerated from 4.4% yoy in December to 4.7% in April, outside the 4.5% inflation target upper limit and non tradable inflation is still at an uncomfortable high 5.1% yoy, says the shop. The Colombia central bank has its policy meeting Friday.
Moody’s Upgrades Mexico’s Cablemas
Moody’s has upgraded Mexican cable operator Cablemas’ corporate family rating and $175m of global notes due 2015 to Ba3 from B1. The agency also changed the rating outlook to positive. The action was prompted by the approval last week of the Mexican anti-trust regulator of the acquisition of a 49% stake in Cablemas by Grupo Televisa (rated Baa1 stable). “Moody’s perceives such an acquisition as positive for Cablemas’ business and financial profile as it will now count on Televisa’s ongoing support for its growth plans”, the agency says. This implicit support should afford Cablemas the opportunity to continue to improve its business prospects with regard to expansionary projects in the cable TV, internet and telecom voice markets, Moody’s adds. Last week, S&P placed on credit watch positive the BB minus rating of Cablemas, including the 2015, citing the Televisa acquisition.