Mexico’s BBVA Bancomer has put out price guidance on its $1.1bn in hybrid securities, which it expects to price today, Thursday. For $500m worth of non-cumulative subordinated and non-preferred 15 non-call 10 Tier I notes (A1/BBB+), due 2022, guidance is at 140bp over Treasuries. For the €500m or more in cumulative fixed-to-floating rate subordinated preferred, 10 non-call 5 Tier II notes, due 2017, talk is at mid-swaps plus 45bp. The Tier I notes are and callable in 2017 and thereafter. In year 10 they switch to floating rate and step up 100bp from the price to be determined next week. The Tier II notes are due 2017 and callable in 2012. Credit Suisse, BBVA Securities and Deutsche Bank are joint-leads.
Category: Structured Finance
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Cemex Seen Offering Value
Mexico’s Cemex is a surprise top corporate pick on the EMTA panel. The high grade stalwart’s recent hybrid issuance offers a significant pick up if priced to call, says Deutsche’s Milne. The perps with 5 and 10 year calls have large step-ups. “If you know Cemex, you know they never want to give investors or creditors any extra money,” says Milne. On a yield to call basis, they offer 50bp-100bp over Telmex or América Móvil. In sub-investment grade, she likes companies with restructured debt that are refinancing, like TGS, which issued Wednesday. High 7% to 8% on Argentina is seen as value. Holsberg tips the beef sector and CIE, which are also picks of Chang’s. Renfrew likes hybrid bank paper in Mexico and Brazilian airlines, TAM and GOL.
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Metrofinanciera RMBS On The Way
Mexican Sofol Metrofinanciera is heard to be preparing a $100m equivalent issue of UDI-denominated RMBS for the week of May 24. The deal is directed at local investors, but will have an American depository note that will allow US investors to participate as well. The notes, which are backed by 3,227 mortgage loans, are rated BBB+ by Fitch. Mexico’s Banco IXE is leading the deal. Also heard in the pipeline are larger RMBS offerings from Banamex and Bancomer in the $200-$300m range.
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IDB Raises $207m From Mexican Peso Issue
The Inter-American Development Bank (IDB) raised $207m on Monday via the sale of 2.25bn Mexican peso-denominated bonds, reported Dow Jones, quoting the deal manager, TD Securities. The AAA-rated bonds sold at 97.435 to yield 7.78% per annum. The bonds, which carry a coupon of 7.5% per year, mature on December 5, 2024.
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BBVA Bancomer Preps $1.1bn+ Hybrid
Mexico’s BBVA Bancomer, owned by Spanish bank BBVA, is preparing to issue $500m worth of Tier I notes, (A1/BBB+) and upwards of €500m in Tier II notes. The Tier I notes are non-cumulative subordinated and non-preferred 15 non-call 10, due 2022 and callable in 2017 and thereafter. In year 10 they switch to floating rate and step up 100bp from the price to be determined next week. The Tier II notes are cumulative fixed-to-floating rate subordinated preferred 10 non-call 5 notes due 2017 and callable in 2012. Two simultaneous roadshows will kick off Monday and pricing may come Thursday. Credit Suisse, BBVA Securities and Deutsche Bank are joint-leads.
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IDB Approves $400 million Credit For Mexican Toll Roads
The IDB has approved a partial credit package of up to $400 million to help finance the privatization and concession of a four-highway network in Mexico. The credit is intended to help the eventual developers of the infrastructure projects obtain long-term financing via bonds and loans in Mexican pesos at better terms than it would be able to achieve without the guarantee.
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CAF Grants $600 Million For Tocoma Project
Caracas-based Andean Development Corporation (CAF) has approved a $600 million loan to part-finance Venezuela’s hydroelectric plant Manuel Piar (Tocoma), situated in the south of the country. Due to be completed by 2014, the facility will have a capacity of 2,160MW. This is the second loan granted by CAF to the project – the first was for $300 million in 2004. The total cost of the project is set at just over $3 billion and is being financed by the state and other “multilateral sources”, according to CAF.
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Costa Rica Goes For CAFTA Referendum
President Oscar Arias of Costa Rica has announced that the country will hold a referendum with regard to ratifying CAFTA – the free trade agreement with the U.S. Arias publicly supported CAFTA, which is as yet unratified in Costa Rica, during his presidential campaign, claiming it was the only way to attract foreign investment to the country. However, the trade pact has come under strong criticism in the Central American country by those who fear competition will destroy local production.
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Mexican Financials Prepare RMBS Offers
A number of Mexican banks are preparing to launch local RMBS transactions in the next couple of months, according to market participants. Mexico’s Banamex is heard preparing to launch a $300 million RMBS in the coming several weeks. Bancomer is also expected with a transaction of similar magnitude, and Scotiabank and Santander are considering comparable issues. “Eventually these deals will also include other kinds of securitizations such as auto loans, credit card receivables and consumer loan securitizations,” says an EM investor. “But they’re starting off with the RMBS market because these structures are more familiar to investors.” Mortgage writer Metrofinanciera is also in the market with an offering of RMBS to be managed locally by IXE and offshore by Deutsche Bank, according to an executive away from the deal. The offering will be denominated in Mexican inflation-linked UDIs.
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HSBC Borhis Get Moody’s Rating
The first residential mortgage-backed securities (RMBS) to be issued by HSBC Mexico have been assigned a national scale rating of Aaa.mx (Class A certificates) and a global scale, local currency rating of Baa1 by ratings agency Moody’s Investors Service. The rating follows that by Standard & Poor’s, which last week assigned its national scale rating of MXAAA/MX to the two series of notes. According to S&P, the issue is the largest such in the region to date. The two series of RMBS, or Borhis to use their Mexican acronym, total $225 million (2.5 billion pesos) and carry a maturity date of November 22, 2022.