Category: Regions

Mexican steel company Grupo Simec has raised $250 million via a global public offering of 60 million shares. The company priced its ADS on Friday at $12.50 per ADS and in the local market its shares priced at 45.70 pesos per share ($4.17). The global offering included an overallotment of 7.8 million shares. Citigroup Global Markets acted as global coordinator; Acciones y Valores Banamex, Casa de Bolsa Integrante del Grupo Financiero Banamex, and Ixe Casa de Bolsa, Ixe Grupo Financiero, were the joint bookrunners in the Mexican tranche.

Mexico’s central bank, Banxico, released its January inflation figures showing that headline inflation eased somewhat while core inflation rose significantly, driven by continuing high prices of maize and tortillas. Monthly headline inflation fell to 0.52% from 0.58% in December taking inflation for the 12 months through January down below the 4% target ceiling to 3.98%. Core inflation for the month was up from 0.43% to 0.50%, taking annual inflation up from 3.61% to 3.89%. So far, the price hikes in certain foods have not crossed over into general price rises and analysts believe that interest rates will likely remain unchanged this month.

Mexico’s pension fund industry must evolve if it is to provide private sector workers with decent pensions for retirement, a panel at LatinFinance’s second Cumbre Financiera Mexicana in Mexico City, concluded today. Jose Eduardo Silva, CEO of Afore Profutoro said that pension funds must be able to invest more in floating rate instruments, credit derivatives and structured products to boost returns. Silva acknowledged that while second-stage reforms had helped to broaden investment alternatives, Mexico has not done enough to stimulate competition among pension funds. He noted that although fees had decreased dramatically, not enough has been done to boost performance. Moises Schwartz, chairman of CONSAR, Mexico’s pension fund regulator, noted that pension funds have not embraced the wider range of investment products available to them since the second-stage reforms in 2004 and 2005. Pension funds invested 71% of their assets in government debt last year compared with 95% in 2000 with just over half of the 21 funds preferring to concentrate portfolios in Mexican treasuries. Francisco Gonzalez, CEO of BBVA Bancomer’s Afore and chairman of the national association of pension funds, argued that public-sector funds should join the defined contributions system to create a national pensions system. And the industry must encourage workers to contribute more to pensions on a more regular basis. Pension fund assets in Mexico grew to 8.1% of GDP last year, with $65 billion in assets under management, from 3.1% in 2000, representing a compounded annualized growth of 16%.

IXE Grupo Financiero, a Mexican bank, is set to launch a $100 million perpetual bond callable after five years. Goldman Sachs is the lead manager on the deal, which will begin its roadshow this week and look to price by the end of next week, according to bankers away from the deal. Fitch expects to assign a B+ rating to the securities.

Mexican cement maker Cemex priced a $750 million perpetual, non-call 8 bond yesterday at par to yield 187 basis points over comparable U.S. Treasuries. The transaction was tightened from 190 basis points over as orders exceeded $3 billion, according to bankers close to it. Cemex apparently went out initially looking for $500 million. The 6.64% coupon bonds step up to Libor+440bp in year 8. Proceeds will be used to pay for an eventual acquisition of Rinker, based in Australia, a hostile takeover which could happen as early as March, according to recent filings. If the deal falls through, the cash will be used to refinance existing debt. Barclays and JPMorgan were joint leads on the transaction, which settles February 12. Fitch rates it BBB.