Category: Regions

Mexico’s core inflation, which excludes energy, fruit, vegetables and education prices, fell to 2.98% in January compared with the same month last year. Core inflation for the month was 0.24%. Headline inflation, meanwhile, rose 0.59% month on month to 3.94%, the highest level in five months. Mexico enjoys the second lowest annual inflation in Latin America (behind Peru). Economists expect the low core inflation to lead the central bank to ramp up benchmark interest rate cuts.

Mexican broadcaster Televisa may be looking to buy US partner Univision, which has said it is considering selling. Univision is the leading Spanish-language media outlet in the US. Grupo Televisa, Mexico’s largest broadcaster, currently holds an 11% stake in its US partner. However, in order to buy Univision, Televisa will need to find a way around US foreign ownership law that forbids majority foreign ownership of media companies. Although, there has been speculation that Televisa’s determined CEO, Emilio Azcárraga, may apply for US citizenship, it is thought more likely that the Mexican company will seek to partner a US private equity firm. Interestingly, Univision was founded by Azcárraga’s grandfather Emilio Azcárraga Vidaurreta.

Following two years of negotiations, Mexican satellite service provider Satelites Mexicanos (Satmex) has reached a deal with its debtholders to swap $523.4 million debt outstanding. The swap will include exchanging part of the debt for equity and longer-term debt. Floating-rate notes due 2004 worth $203.4 million will be swapped for new five-year paper; a further $320 million of bonds in default will be swapped for seven-year notes and shares in the company. Satmex’s debt totals $700 million, of which it owes $188 million to the government.

Francisco Gil-Díaz, Minister of Finance and Public Credit of Mexico will deliver a key-note address at the next Latin American Borrowers and Investors Forum in Miami on February 16th. The forum will bring together the leading institutions and individuals that shape Latin America’s capital markets including Jeff Huther, Director of Debt for the U.S. Department of Treasury; Atul Mehta, Head of Latin America & the Caribbean at the IFC; Andreas von Wedemeyer, President of AFP Profuturo and Arthur Steinmetz, Head of International Bond Trading at Oppenheimer Funds Inc.; among others. To learn more please visit www.latinfinance.com/labif

Mexican soft drink bottler Embotelladoras Arca is to buy a non-controlling stake in family-owned, food processing company Grupo Herdez. Arca has agreed to pay $304 million to buy around 73% in Herdez through a capital increase in the holding company, giving it a 49% stake in that vehicle, and by buying 25% of the food processor’s shares through a tender offer. Monterrey-based Arca says the purchase is aimed at benefiting from the growth in the broader food industry.

Mexico is to become the first foreign sovereign to offer investment-grade bonds directly to US retail investors. The government is taking advantage of its investment-grade rating to diversify its investor base and lower the cost of debt financing. From February 13 the government will sell, under its UMS InterNotes program, dollar-denominated bonds in $1,000 denominations, to individuals in the US wishing to invest in Mexico’s thriving economy. The notes will be issued with maturities ranging from three to 10 years and will include a survivor’s option. The bonds are expected to pay annual an interest rate of 0.7 to 1 percentage point above comparable US treasuries. Chicago-based Incapital and Banc of America Securities are lead managers and agents of the new program.