Category: Regions

Banco Invex intends to become the fourth bidder for Consorcio Aeroméxico, the government –controlled holding company for the Mexico’s largest airline, local press reports. It notified competition regulators earlier this month that it plans to seek authorization to bid, according to El Fianciero, which cites regulatory sources. Businessman Moises Saba has offered MXP1.74bn, and Banamex has offered MXP1.67bn, with rival Mexicana’s authorization pending.

Mexican paper and packaging company Corporacion Durango plans to price today a $520m 2017 bond issue, which is talked at 10.5% area, according to bankers familiar with the transaction. The notes, rated B+ by S&P are non-call 5 and consolidate two tranches – the other a 5-year amortizer – that were being considered. Proceeds will be used to refinance debt. Durango is doing a tender offer for $419m in bonds and some loans, which is contingent on the cash raising. Merrill Lynch is the sole underwriter. Durango follows this week’s TGI (BB) and Grupo Senda (B+), the first sub-investment grade bond spree in many months.

The first FARAC toll road concession project, led by ICA and GS Infrastructure Partners, has raised MXP37.1bn through a syndicated loan – the biggest such financing yet seen in LatAm. Santander led the transaction from its Mexico office, and was joined by bookrunners Dexia, NordLB, HSBC and Banorte. Four MLAs – Inbursa, Banobras, ING and WestLB – also participated, taking tickets of over $300m apiece. The signing took place Thursday. On Monday the MXP31.0bn acquisition facility will fund, leaving a MXP3.1bn working capital facility and a MXP3.0bn liquidity facility to be drawn down by the concessionaires later on as needed. The entire facility will be syndicated to retail in the coming months, and timing for that process is still being decided. None of the MLAs on the deal took the option to swap dollars for peso being offered by Santander, suggesting they were able to obtain the pesos through their own lending bases or other means. The biggest local currency syndication to date is a 7-year stepping up from 165bp over Libor in year one to 185bp in years two and three, 200bp in years four and five, and 225bp in years six and seven.

Moody’s has upgraded the issuer ratings of the State of Baja California to Baa1 (Global Scale, local currency) and Aa1.mx (Mexican National Scale) from Baa3 and Aa3.mx, respectively. The rating action was prompted by the state’s good financial performance, moderate debt profile and the expectation that the state’s water companies will not require financial aid from the state despite their relatively large and increasing debt levels. The rating action also took into account an agreement reached between the state government and its labor unions to increase both parties’ contributions to the state social security system, ISSTECALI, which will make the state’s annual payment obligation more predictable. During the past five years the state’s direct debt levels have remained fairly stable, at around 6% of revenues. This year, the state expects to obtain loans for Ps 1,150 million to finance several capital investment projects, which will increase its direct debt to 10% of revenues and debt service requirements to a still modest 2% of revenues for several years.

Volker Helms has been hired by Landesbank Baden-Würtemberg (LBBW), the largest of the Germany’s five state-owned banks, to be the country head for Mexico. He is currently a director in Deutsche Bank’s structured trade and export finance department and the head of LatAm for that business. LBBW, which has a rep office in Mexico and one in Brazil, is looking to beef up its presence in the region by providing financing options, such as credit lines, working capital and receivables-based lending, to German mid-caps operating locally. Helms, expected to start in December, is expected to oversee that expansion for Mexico, and will likely be adding staff to work with local clients. Deutsche did not return calls by press time.