While Mexico’s local debt markets show signs of life, bankers and investors foresee a slow return of structured debt transactions to pre-crisis levels. “I’m completely sure that we will see new ABS deals in the near future and also some RMBS that aren’t from government-backed issuers,” says Ricardo Cano, head of DCM at BBVA Bancomer. However events in the last 2 years have taught investors important lessons. “We’re going to see a divergence between ABS issuers this year – some will be able to come back to the market faster than others,” says Cano. Sergio Mendez, CIO at Afore XXI, agrees, saying investors will have to work harder to differentiate between issuers in terms of quality. As government lenders Fovissste and Infonavit prepare to place between MXP10bn-MXP20bn in RMBS each this year, prospects for private issuers are more limited. Banks are the most likely issuers, with BBVA Bancomer among prime candidates, according to investors and DCM bankers away from BBVA. They note that deals will be smaller than pre-crisis, when transaction volume could reach MXP4bn-MXP5bn. Infonavit is preparing to issue MXP5.69bn in RMBS March 10, and Fovissste MXP4.5bn March 24. Cano and Mendez spoke on a panel at LatinFinance’s 5th Cumbre Financiera Mexicana in Mexico City last week.
Category: Structured Finance
CAF Invests In Peru Fund
CAF says it is investing $40m in a Peru-focused infrastructure fund managed by Canada’s Brookfield Asset Management and locally owned private equity shop AC Capitales. The fund, established in October, aims to raise $500m. Brookfield and AC Capitales have already committed $100m to the fund, which will mainly invest in transport, energy, water and sewage, communications and logistics.
GUEST COLUMN: Back to the Future?
IDB shareholders should use capital replenishment discussions to consider a re-alignment of their ownership. Borrowing countries need to recover a bigger voice.
Jamaica Gets IDB Support
The IDB has approved a $45m in loans for Jamaica to enhance the country’s education system. A $30m loan will support improvements in school infrastructure and teacher training, while a $15m facility will be used to expand compulsory education to 18 years from 16 and to build 2 secondary schools for up to 2,100 students. The loans have a 20-year term, with a 5-year grace period on the larger and 3 years’ grace on the smaller. Another $30m loan is expected to be approved in 2012, the IDB says.
Colombiana Places MBS
Mortgage securitization company Titularizadora Colombiana has issued COP181.4bn ($93.0m) in mortgage-backed securities (MBS) due 2020. The MBS pay UVR plus 2.5%. Demand was 2.4x the amount offered. The AAA rated MBS are backed by 6,976 mortgage loans of which 55% are originated by Davivienda and 45% by Bancolombia, the company says.
Jamaica Gets IDB Loan
The IDB has approved 3 loans totaling $170m for Jamaica to support private and public sector competitiveness and modernization. The loans are for a 20-year term, with a 5-year grace period, and carry a variable interest rate over Libor.
Scotiabank Trims DPR for Lower Spread
Peru’s Scotiabank has raised $175m in diversified payment rights (DPR) bonds in its first visit to the capital markets using the future flows structure, say executives familiar with the trade. The bank had launched at $200m, but opted to reduce size to secure attractive pricing, say bankers on it. Rating agencies had assigned their respective A/A minus scores for an up to $250m issuance. A $50m 7-year final fixed rate tranche came at 5.25% while a $125m floating rate piece with the same tenor came at Libor plus 275bp. The fixed rate piece was done to satisfy reverse inquiry from one investor, according to executives leading it. The average life of the bond, which is backed by financial flows, is 4.8 years. Proceeds are for balance sheet management and asset/liability matching. As such, the issuer is very price sensitive, says a banker on the deal. He adds distribution for the deal, which included a roadshow for the debut issuer, counted on a book with over 20 distinct entities including pension funds, insurance companies, asset managers and corporates. Almost all are based in North America. Credit Suisse led the deal.
Peruana Wraps Debut RMBS
Titulizadora Peruana has priced a $32m RMBS, its first ever mortgage-backed security offering, according to an official at the securitization specialist owned by Titularizadora Colombiana. The 20-year bonds backed by mortgages from BCP and Interbank pay 4.8% and saw demand of $34m. The bond is dollar-denominated to match the currency of the loans. In addition to the AAA rated senior pice, a 9.0% subordinated issue raised $2m. BCP’s Credibolsa unit and Inteligo are placement agents for the deal.
Ecuador Signs IDB Loan for Infrastructure
The IDB has approved a $350m loan to Ecuador to help finance the country’s infrastructure program, says the ministry of foreign relations. The 25-year loan has a 6-year grace period and an interest rate based on Libor.
Telefonica Gets ECA Funds for Network
Spain’s Telefonica has secured a $472m 9-year credit facility from Swedish ECAs to help it finance its European and LatAm 2G and 3G networks. The loan is priced at an undisclosed fixed rate and matures in 2019. Sweden’s export credit and export insurance arms SEK and EKN are providing funds and guarantees, while Citi and Deutsche Bank are the commercial lenders of record.