Category: Regions

Ricardo Rivera, treasurer of LatAm wireless operator América Móvil, urges local regulators in LatAm debt markets to follow Peru and Mexico’s example and allow domestic investors to buy the debt of foreign companies invested in their countries. Rivera told panelists at Labif, “We have seen a lot of [local] investors that want to hold paper of other Latin American names and for regulatory reasons often can’t.” As companies pan out across the region, they are increasingly motivated to fund themselves in the currency of the countries where they have operations, says Rivera. “As an investor in other countries, issuing debt is another natural hedge for your investment and very attractive for corporates like us as a source of funding. “América Móvil has issued at attractive rates in Mexico, Peru and Colombia, but was frustrated by an attempt in Chile. “We found that between the different regulatory entities for pension funds, the Central Bank and the Ministry of Finance, there was not much coordination, which is fundamental for any kind of development to be done.” Rivera notes that Mexico’s corporate debt market has grown exponentially since allowing foreign companies to issue debt in there.

Pension fund reforms in Argentina and Mexico are designed to promote more diversification in local investor portfolios to boost long term returns. But workers in those systems must be better informed about the net returns on their portfolio and encouraged to save more through higher contributions and tax incentives to save, concluded a panel on local pension funds at Labif. Moises Schwartz, the president of Mexico’s pension fund regulator Consar says reforms in Mexico include raising the threshold for foreign investments to 20%, allowing investors to buy structured notes and offering savers five different types of accounts according to their investment horizon. Schwartz notes that Consar allows savers to switch to another Afore based on its net return rather than lower management fees in a bid to align workers savings with fund performance.

Mexican wireline company Maxcom posted strong quarterly earnings, but has yet to turn a profit and still had debt of approximately 4.1 times Ebitda in Q1, versus 3.5 times in the corresponding period of 2006. Jose Antonio Solbes, Maxcom’s CFO tells LatinFinance he expects leverage to start falling over the next year and predicts Maxcom will become “net income positive” in the second half of 2008. Maxcom, which is positioning itself as a telecom provider to low income residents in Mexico, is starting to gain credibility with some in the market. Jim Harper an analyst at BCP Securities says, “I like the name and they have further to go in the upside of the price.” Maxcom’s bonds are trading around 108.25. This marks Maxcom’s eighth consecutive quarter of sequential sales and Ebitda growth. The company, which issued $175m in 11% of 2014 notes last December through Morgan Stanley, reported consolidated revenues of $47m in Q1, compared with $31m in Q106, a 53% increase year-on-year. Q1 Ebitda of $13m was 51% higher than the $9m reported in the previous year and up 8% versus the previous quarter.

Grupo Televisa launched and priced Wednesday $412m equivalent in 30-year Mexican peso-denominated bond (Baa1/BBB) at par to yield 8.49%, or 67bp over the 10% of 2036 MBono, which closed the day at 7.82%. Guidance was 68-73bp over Mbonos. The bonds, payable in USD, have a make-whole flat to the MBono rate and change of control repurchase at 101. HSBC and Goldman led.