Category: Regions

This year’s Mexican peso corporate pipeline looks pretty slim, at least for plain vanilla high-grade certificados. “I don’t see very much at all this year,” says a Mexico City-based capital markets banker at a global investment bank. The supply opportunity is mostly in Europeso and MBS, the banker adds. However, some of these markets are getting saturated. A general lack of assets and continued accumulation of cash at the Afores is pushing pricing ever tighter, say bankers. Besides structured finance, equities markets are also expected to pick up and there is the expectation of more leveraged deals. But thanks to a spree of pre-financing ahead of a turbulent election last year and the relative lack of urgent need for capex funding, deals will be largely be event driven, and should not diverge too much from the odd refinancing. Pemex is one likely candidate for a large local issue, probably at the long end.

Mexican bankers are eagerly preparing for hefty toll road concession auctions. They are advising a host of bidders on the first part of the $25bn FARAC concession, which will be auctioned off in five portions. The first part, for a set of roads in Jalisco, will be sold at the end of June, and could go for up to $4bn, according local banker estimates. The winner of the auction will automatically be in pole position for upcoming mandates because of the experience it will gain from having Jalisco under its belt, say bankers. Since the toll roads are already operational and have track records, the initial financing will likely be done with a bridge loan, followed by subsequent takeouts in the ABS market with tenors as long as 30 years, and initial leverage of more than five times, according to some proposals. UDI-based supply is forecast. At least three banks LatinFinance spoke to in Mexico are backing a bidder, and the expectation is that everyone who considers themselves a player is looking to get involved. FARAC is the trust fund set up after the mid-90s financial crisis to rescue private toll companies.

Spanish real estate developer Fadesa Inmobiliaria is to invest $5.4bn in building a resort in Loreto, in the Mexican state of Baja California Sur. Loreto Paraíso, as the complex is to be called, will be the fourth project by Fadesa in Mexico.

Mitsui has won a lead role on 20-year contracts worth $298m for water supply and treatment projects in Mexico’s Queretaro state. The MXP2.9bn supply project will take 26 months to construct and operate for 214 months. Mitsui subsidiary Servicios de Agua Trident, has 26%, ICA group 37%, FCC group 26% and Proactiva an 11% stake. Meanwhile, a MXP371m wastewater treatment project with similar operating and construction schedules is 50% held by Agua Trident and 50% by Earth Tech Mexico.

The government will wait until September to sell off its 60% stake in Mexican airline group Aeroméxico, according to reports by local media quoting airline president Andrés Conesa. Earlier this year, Aeroméxico proposed a primary offering of shares, both local and international, to raise capital. The share sale was expected for June. Meanwhile, low-cost airline Avolar has said it is interested in buying control of the carrier.

Unifin will today issue MXP200m in 5-year floating rate asset-backed securities. The notes, backed by auto-loans, come from a MXP1bn program, and have AAA local rating from S&P. IXE is the underwriter and JPMorgan is the trust administrator.

Mexican retailer Elektra, owned by Grupo Salinas, has opened its second banking subsidiary outside Mexico. Banco Azteca Guatemala is a wholly owned subsidiary of the Group and the second banking unit to be launched after Panama. Azteca Guatemala, headquartered in Guatemala City, has a nationwide network, the bank said in a statement. Elektra has been present in the local market since 1997. Grupo Salinas set up Banco Azteca in 2002 to complement its network of Elektra electro domestic outlets. Earlier this year the bank got the nod from Honduran bank regulator (CNBS), which has approved its banking license to operate in Honduras.

Mexican telco Telmex is the second big name to show an interest in the upcoming sale of local satellite operator Satélites Mexicanos (Satmex). The company successfully restructured last year to position itself as a target in the consolidating satellite communications sector. It appointed Morgan Stanley to advise on the sale to a strategic buyer. The restructuring, which has been praised for its fair treatment of foreign creditors, left 78% of the company’s equity in the hands of the debt holders. The remaining 22% is held by the Mexican government (20%) and jointly by local telco Principa and US operator Loral (2%). Earlier this year, local broadcaster Televisa said it was evaluating an acquisition of Satmex.