Category: Regions

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.

Mexican builder Grupo R is preparing a retail syndication of a $600m 8-year loan supporting construction of a semi submersible drilling platform. The facility is built by Korea’s DSME and will operate under a long-term contract to Pemex. WestLB and BBVA are MLAs. The deal is not yet out to the market.

Metrofinanciera, the Mexican housing lender, is seeking private sources of funds to shore up its balance sheet. “We are looking at ways of strengthening our capital base, talking to investors and global banks,” CEO Armando Guzman tells LatinFinance. Rating agencies and bond markets have fretted over Metrofinanciera’s ability to refinance recent rapid expansion. But Guzman says the firm is in good shape and rejects rumors that Metrofinanciera may be up for sale. The official says agencies were concerned about short term debt and a recently established land bank. But he claims that neither is problematic, and adds that company debt with a maturity of less than 12 months has been cut to MXP1.3bn from MXP7.6bn last year. “We think the land bank is a natural backwards vertical integration of the business,” says Guzman, adding that it has $500m invested in Mexican land. “We have enormous challenges to keep up our business strategy and growth strategy,” adds the official. Guzman says the company is seeing decent consumer loan opportunities, as well as a new credit card venture. Metrofinanciera last month suffered downgrades as agencies fretted over exposure to short-term maturities and rising costs of funds.

Mexican borrowers are having to work much harder this year to woo investors, and frequent issuer Hipotecaria Su Casita is no exception. “Things have changed completely,” says Su Casita CFO Mark Zaltzman. “We’ve had to completely change our strategy.” By contrast to last year, when investors were not interested in meeting but still placed huge orders for the bonds, Su Casita now has to go and see every buysider and explain all details of a transaction. It is also doing a lot of non-deal roadshows and, like a high grade US entity, flagging for investors full details of the year’s issuance plan. Transparency and reporting has become crucial. “This has been an extremely slow year,” says Zaltzman. The official adds that by this point in the year, when Su Casita has only done one RMBS, it should have done 2-3 transactions. Su Casita started issuing in 2002 and was last year’s second biggest Mexican corporate borrower, according to Zaltzman. “This is now a buyer’s market and we cater to that fact,” he adds. Su Casita did a European roadshow in November to assess demand for covered bonds. It sees value in the structure, which has no prepayment risk and brings diversification of the investor base. But Zaltzman notes limitations on the liquidity side, since the buyer base typically wants EUR500m or more. Su Casita is not expected to issue in this format.

S&P has placed on credit watch positive the BB minus rating of Mexican cable, internet and phone provider Cablemas, including $175m senior notes due 2015. The action indicates the potential for an upgrade following the recent announcement authorizing the conversion of Grupo Televisa’s long-term convertible notes into 99.99% of the equity of Alvafig, which holds 49% of Cablemas’ voting equity, the agency says. Also helpful is the recent acquisition by Alvafig of an additional 11% of Cablemas, which eventually will lead Televisa to own about 60% of Cablemas stock. “We believe Televisa’s support of Cablemas is a major rating factor,” the agency says.

Moody´s has downgraded the Mexican state of Nayarit to Baa3 from Ba1 with a stable outlook. “The downgrade reflects the state’s uneven financial performance and negative liquidity position, which limit financial flexibility,” the agency says. The downgrade also reflects an aggressive capital plan for which the state plans to borrow MXP1.2bn. “This new debt, combined with the gradual deterioration in financial performance experienced in recent years, will exert significant pressure on the state’s budgetary flexibility,” the agency adds. Should the debt materialize, Moody’s expects debt service cost, which was equivalent to 2% of operating revenues in 2007, to increase to 6%, while the outstanding debt balance would increase to 13% of total revenues this year, compared to 4% in 2007, the agency adds.