Category: Regions

Mexico plans to sell warrants with a notional value of $1.25bn that will allow investors to exchange foreign currency debt for peso debt. On April 2 and 3, investors will be able to purchase two types of warrant that allows them to trade in 21 series of dollar, euro, deutschemark and Italian lira-denominated bonds with maturities between 2009 and 2034 for local bonds. The first warrant has a notional value of about $1bn and offers peso-denominated bonds due 2014, 2017 and 2036. The second is worth roughly $250m and offers 2017 and 2035 debt denominated in UDIs. Holders of the warrants will be able to receive their new bonds on October 9. This is the first Mexican warrant transaction to allow swapping into UDIs, as well as the first time the liquid global 2034s will be involved, according to a banker on the deal. This is the fourth sale of warrants since 2005. The government has exchanged more than $4bn in foreign-currency debt for peso bonds in the last two years. Barclays and Merrill Lynch are managing the transaction.

S&P has cut the national-scale rating of Mexico’s Coppel to mxA minus, from mxAA minus. The donwngrade was triggered by the retailer’s aggressive expansion plans. They include opening new stores, Coppel’s acquisition of Hipotecaria Credito y Casa and the opening of the Banco Afore Coppel, which has seen leverage increase. The issuer had been on credit watch since November, and its outlook is stable.

Mexico’s government has announced a MXP4.5bn highway project to connect the southern city of Oaxaca to the coastal resort towns of Huatulco and Puerto Escondido. The 283km road will finance the project with a combination of public and private investment from the new MXP270bn National Infrastructure Fund. A bidding guide will circulate next month, the government says, with a winner to be chosen by the end of the year. The government aims to have the highway completed by 2010. It expects about $2bn will be spent on 14 projects in 2008, and launched in February the Pacific Package, a follow up to last year’s highly successful FARAC toll road auction, which incorporates some existing roads and greenfield projects. The second round of FARAC toll roads will be auctioned in June, according to a banker whose shop hopes to bid.

Mexican quasi-state housing fund Infonavit plans to sell up to MXP3bn in 2030 mortgage-backed bonds April 9. The issue is the first from a new MXP15bn program. The issue is scheduled to coincide with pension fund changes, according to a banker on the deal. The most notable alteration is the “corte transversal,” which allows division into five funds based on employees’ age group, with increasing degrees of aggressiveness. Banamex and Deutsche Bank are managing the mxAAA rated sale.

Moody’s has affirmed Mexican derivatives clearing house Asigna at A1 on the global local currency issuer scale with a stable outlook. The agency notes that credit quality is primarily tied to that of its owners, BBVA Bancomer, Banamex, Banco Santander, Scotiabank Inverlat, and JPMorgan. The ratings are limited by the nature of a still developing derivatives market in Mexico and the fact that Asigna remains a young organization with only 10 years of operation.