Category: Regions

Wal-Mart de México, a subsidiary of the US retail giant Wal-Mart, received the green light from Mexican authorities to establish banking operations in Mexico, along with four other operators: Bancoopel, Prudential Bank, Banco Facil and Comercial del Noreste. Wal-Mart was granted a multiple license, meaning it will be able to offer any kind of financial services via its 826 outlets in Mexico.

Mexico swapped a further $898.5 million of external debt for domestic debt Wednesday, with the exercise of its third (XW5) series of dollar warrants enabling investors to exchange dollar-denominated securities (UMS bonds) for peso debt (M bonds). Warrant holders exchanged $898.5 million of UMS bonds maturing 2007 to 2011 for 10,268 million pesos of local-currency M bonds due 2011. This is the third of four swaps that will see Mexico exchange around $3.3 billion of foreign-currency debt for peso-denominated debt. Last November, Mexico sold three series of dollar warrants to enable investors to swap $2.5 billion of dollar-denominated securities for peso debt. Then in March this year, the sovereign sold warrants to swap euro-denominated bonds worth $722 million (€600 million) into local-currency bonds due in 2013 and 2023. Mexico is hoping to bring down its foreign debt-to-GDP ratio to around 6% by the end of this year from around 12% in 2000.

Moody’s Investors Service has assigned an Aaa.mx national scale rating and a Baa1 global scale rating to the latest issuance by Mexico’s largest, government-run, home-finance agency Infonavit. The Agency’s ninth issuance of mortgage-backed securities or Cedevis, through Nacional Financiera acting as trustee, totaling 2.247 billion pesos ($207 million) is the largest issuance of residential mortgage-backed securities to date in the Mexican market. The securities, which carry a maximum 22-year maturity, will be denominated in inflation-linked UDIs and will return a monthly interest rate of 4.95%, the lowest yield yet obtained by Infonavit.

Mexican airport operator Grupo Aeroportuario Centro Norte (GACN) or OMA has filed a shelf with the SEC for a proposed initial public offering of 167 million Series B shares, which will also be offered as ADS, with each ADS representing eight Series B shares. The company said it expects an offering price of between $14.50 and $16.50 per ADS and 20 to 22.50 pesos per Series B share to raise up to $345 million. The IPO will see the Mexican government sell its remaining 48% stake in OMA, completing the privatization process it began in 2000. Citigroup is managing the US and international offering; Banamex will be the bookrunner for the Mexican tranche. In April this year the government rejected an offer by local construction firm ICA to buy its holding for $270 million and chose instead to offer it for sale via the stock exchange. ICA already owns 51% of the company and therefore had the right to bid for the outstanding shares. GACN has operations in 13 locations throughout the country, including Monterrey and the resort of Acapulco. In February the government raised $870 million from the sale of Grupo Aeroportuario del Pacifico (GAP), the country’s largest airport operator.

Kansas City Southern de Mexico, the Mexican railway operator and subsidiary of Kansas City Southern of the US, sold $175 million of notes due 2013, more than the $150 million originally planned. The paper was sold in the 144a private placement market. Banc of America Securities and Morgan Stanley were the joint lead managers. The notes, rated B3/B- by Moody’s/Standard & Poor’s, were sold at a yield of 7.625%, a spread of 304bp over comparable US treasuries. The notes carry a three-year equity call for 35% at 107.625% of par.