Category: Regions

Morgan Stanley has hired Jaime Martinez Negrete, a managing director in investment banking at Credit Suisse in Mexico. Martinez will join in Morgan Stanley in mid-July as an MD in Mexico City, primarily responsible for M&A. He will report to Felipe Garcia-Moreno, head of investment banking for Mexico. At CS, Martinez worked on the $1.4bn sale of Mexicana, the $1bn IPO of Grupo Aeroportuario del Pacifico, and the Mexican government’s $2.6bn warrant transaction.

IDEAL, the concessions operator belonging to the Slim group, has filed a master trust securitization program worth MXP50bn ($4.8bn). The fund will issue debt backed by toll road revenues. IDEAL is also now roadshowing the first issuance from this trust – a securitization of certificados bursatiles that may be worth up to MXP11bn. The offering will be divided into three tranches: a 7-year floating rate tranche with a 4.5-year average life; and two fixed-rate tranches – one denominated in UDIs and the other in pesos – with an average life of 20 years each. Pricing is still being worked out on the notes, says a banker on the deal. The deal is backed by revenue streams from four toll roads: Chamapa – La Venta; Libramiento – Toluca; Tepic – Villa Union; and Tijuana – Tecate. IDEAL’s master trust carries some novel features, including the fact that it is open ended, meaning new roads can be introduced into the vehicle for ABS issuance at the company’s will. Credit Suisse is the structuring and placement agent. Inbursa is a joint placement agent, while HSBC and BBVA Bancomer have co-manager roles.

Mexican power utility CFE may end up raising less than it originally hoped for in the $2bn 3-year loan it has been trying to syndicate for the better part of two months. The benchmark transaction may wind up some $200m shy of its targeted amount, thanks to the borrower’s undying adherence to a margin of 40bp over Libor, say bankers familiar with the deal. Most lenders characterize the spread as too low given current market conditions and banks’ costs of funds. If confirmed, the investment grade company’s failure to raise the $2bn will provide an important data point for the loan market on pricing and relationship banking. “It’s difficult to justify a relationship with cheap pricing,” says one banker away from the transaction. Indeed, a part of the new facility was a refinancing of an existing facility, but several of CFE’s lenders either left the group or significantly reduced their holds upon seeing the pricing, a move which caught the borrower by surprise. Today is the final day of the syndication, and CFE is heard to have garnered close to $1.75bn. Bookrunners on the deal include BBVA, RBS, BNP, Santander and Citi. SocGen and Inbursa are also heard to have joined with MLA tickets of $100m.

Instituto Fonacot, Mexico’s state-run lender, is planning to sell MXP1.95bn in 2010 floating-rate bonds, according to a regulatory filing. The AAA locally-rated sale is set for May 28. Proceeds will increase the bank’s ability to provide credit to its clients. Scotia is managing the transaction. Fonacot placed MXP2bn in notes in a consumer credit securitization in March. The 2011 notes priced at TIIE plus 3bp.

Mexico’s central bank held interest rates steady at 7.5% for the sixth straight month, on concerns about increasing inflation and knock-on effects from the US slowdown. “On one hand, inflation pressures continue to increase in the world and in Mexico, despite the fact that Mexico has seen less inflation than many other countries,” Banxico says in a statement. “On the other hand, the risks to our country’s economy have increased considerably.” Banxico says food and commodities prices were rising so fast that it will have to revise the inflation forecast in its next inflation report April 30. “The tone of the statement and the actual policy decision lead us to believe that the upward revisions to the inflation forecasts will be modest and that they will only cover a relatively short period,” says Alonso Cervera, economist at Credit Suisse, in a report. “Otherwise, we think the central bank would have already tightened or would have issued a more hawkish communiqué.”

Mexico’s Telmex has priced MXP1.6bn in 2018 bonds at 8.27%, or 64bp over the comparable government bond. The AAA deal was 1.9x oversubscribed and had been expected to price at 65bp over, according to a banker on the sale. Telmex will use proceeds for general corporate purposes, including the expansion and upgrading of its network. Inbursa and HSBC managed the sale.

Mexico’s Sare Holding is preparing to issue MXP1.5bn in 2013 bonds. The homebuilder and developer plans to use proceeds to refinance debt and for other working capital needs. The A3 locally-rated deal is anticipated in early May. BBVA is managing the sale. Sare is a homebuilder engaged in the development, construction, marketing and sale of affordable, middle income, residential and tourist housing developments in Mexico.

Mexican homebuilder Javer will host Monday a Mexico City bank meeting for the launch of a $160m 5-year amortizing corporate facility via Credit Suisse. The margin on the deal is Libor plus 350bp, say bankers familiar with the terms. Javer is understood to have sought a facility last year via Merrill Lynch to finance its planned acquisition by private equity firm Advent International. But the transaction fell through, and with it, financing for the purchase. Today’s deal is not for a buyout, but rather capex and working capital purposes, and comes with tight covenants and leverage heard at below 2x. On Tuesday, a meeting will be held in New York at Credit Suisse for US-based lenders. ABN AMRO and Inbursa signed on as MLAs prior to launch.

Mexican power utility CFE is having a very difficult time raising a $2bn loan facility, thanks to what bankers call overly ambitious pricing. The 3-year senior revolving facility, hailed as a benchmark due to its size and investment grade rating, has been in the market for 6 weeks, but little progress has been made. Just two MLAs, SocGen and Inbursa, have been confirmed so far though bookrunners claim others are slowly coming in. Bankers away from the deal say the 40bp margin offered simply does not appropriately compensate most banks, whose funding costs have risen much higher. “It’s not worth it even for the relationship,” says a banker whose shop chose not to participate. “Right now, there are so many other excellent credits out in the market that are offering much higher margins, and people are choosing those over CFE,” the banker adds. The problem is that CFE appears unwilling to flex up, feeling that 40bp is already a significant premium to its pricing during better times. Bankers on the deal say the company has resorted to dealing directly with potential lenders to reassure them of any doubts. Meanwhile, executives away from the process allege that CFE is leaning on relationship banks already on the deal to pony up more cash to get the thing done. MLA tickets of $150m come with a 35bp fee while $100m tickets pay 30bp. BBVA, RBS, BNP and Santander are bookrunners, with Citi also participating in a senior role.