Category: Regions

Mexico’s Petrotemex has closed a $150m dual currency loan. The transaction includes practically all of holding company Grupo Alfa’s relationship banks. Led by Santander and Standard Chartered, it includes MLA participation from Calyon, JPMorgan, Banamex, BBVA and HSBC. Barclays and BofA also had participant-level tickets. The facility pays on a net consolidated debt to Ebitda grid, which, at above 3x leverage, pays 60bp over TIIE and 70bp over Libor. In the 2.5x-3.0x band, where it was out of the box, it pays 45bp and 55bp respectively. At 2.0x-2.5x, it pays 30bp and 45bp. And at less than 2.0x, it pays 20bp over TIIE and 40bp over Libor.

S&P has upped its corporate credit rating on Xignux, the Mexican diversified holding company, to BB+ (stable) from BB and raised its 2009 notes to BB from BB-. “The rating action reflects an improvement in the issuer’s financial profile supported by better-than-expected financial performance during 2007,” says S&P analyst Jose Coballasi. “In addition, the rating action considers that the prospects for the power transformers business will remain favorable and will continue to drive strong results in 2008 and 2009.” The rating on the 2009s reflects the structural subordination of the issue relative to the company’s priority liabilities. Xignux is constrained by the cyclical nature of most of its end markets as well as commodity price volatility and single-digit operating margins. “The ratings also consider Xignux’s significant market share positions, product diversity, and vertical integration,” says S&P. The firm is committed to maintaining a total debt-to-EBITDA ratio of less than 2.5x through the cycle.

The lead banks on ICA’s $1bn 4.5-year loan to fund construction of the 750MW La Yesca hydroelectric project in Mexico are targeting 6-10 banks in a retail syndication expected to wrap up in January. On offer are $50m lead arranger, $30m arranger and $20m manager spots, with DnB Nor already in. Pricing is heard to be in the range of 50bp-60bp, say bankers away from the deal. WestLB is bookrunner on the deal, with NordLB, BBVA, Citi, Santander, Scotia and Natixis as MLAs.

Mexico City’s government is expected to launch the sale of MXP3.64bn in local bonds today. The offering via Deutsche Bank and JPMorgan consists of a 20-year fixed and a 10-year floating-rate tranche. Sigma Alimentos is also preparing an issue of up to MXP2bn in 2014 fixed and 2012 floating-rate notes, through Bank of America. And Wednesday, Geo filed a MXP2bn shelf to issue UDI or peso bonds via Banorte.

Latin American indices closed lower Tuesday across the board as the market reacted poorly to a stingy 25bp rate cut from the Fed. Mexico’s Bolsa led the losses with a 2.7% drop. The Ibovespa was down 1.4%, Peru’s IGBVL dropped 0.4%, Argentina was down 0.6% and Venezuela was closed 2.2% lower, according to Economatica. Colombia was the only exception, closing up 1.9%. “The decision was not a surprise. However, markets are a little disappointed, since they considered the action as insufficient to reduce financial costs and relief pressures in the economy,” says Moody’s.

Latin American indices closed lower Tuesday across the board as the market reacted poorly to a stingy 25bp rate cut from the Fed. Mexico’s Bolsa led the losses with a 2.7% drop. The Ibovespa was down 1.4%, Peru’s IGBVL dropped 0.4%, Argentina was down 0.6% and Venezuela was closed 2.2% lower, according to Economatica. Colombia was the only exception, closing up 1.9%. “The decision was not a surprise. However, markets are a little disappointed, since they considered the action as insufficient to reduce financial costs and relief pressures in the economy,” says Moody’s.

Mexican retailer Liverpool is expected to sell MXP3bn-MXP4bn in local 2014 FRNs today via HSBC and Citi. And a MXP3.6bn offering from the Mexico City government is being readied for Wednesday via JPMorgan and Deutsche Bank. The DF offer will consist of 20-year fixed and 10-year floating rate notes, and is rated AAA(mex) by S&P. The remainder of notes authorized under a MXP4.5bn program is expected to be sold in an offering next week.

Mexican retailer Milano is close to wrapping up a $190m leveraged loan, and gunning for a close by year-end, say bankers close to the transaction. The book is heard to be $20m short of being fully covered, with verbal agreements in place to cover the difference. So far, Banamex, ING, Santander, GE Capital, Unicredit and Banorte have signed on to the dual currency deal, composed of a $170m 7-year term loan a $20m revolver. The term loan pays $275bp over Libor or TIIE, and the pricing moves on a leverage grid which, at 4x pays 325bp over, and below 2x pays 100bp. The revolver pays 150bp at the highest ratio and 75bp at the lowest. Citi is the lead.