IAMSA will look to price a MXP3.5bn ($270m) securitization in the Mexican domestic bond market on Monday, say people familiar with the inter-city bus company’s plans. The 15-year deal is backed the bus operator’s 1,438 buses and future ticket sale revenue, and will raise funds to repay bank debt. Santander is managing the transaction, rated AAA/AA minus on a national scale.
Category: Structured Finance
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Mexico Keeps Road Securitizations Rolling
Mexico’s domestic debt market continues to see road securitization activity, with Concorcio de Mayab raising MXP4.5bn ($346m) in the country’s second-largest such transaction this year. The ICA-owned operator priced a MXP1.2bn ($92m) 2034 peso-denominated tranche with an 11.3-year average life at 9.67%, or Mbonos+420bp. A MXP3.3bn ($254m) 2034 UDI-denominated portion with an 11.7-year average life priced at 5.80%, or Udibonos+418bp. Investors and analysts had been expecting a spread to each tranche’s respective benchmark of at least 400bp prior to the transaction. “Mayab is an interesting and mature deal with stable assets and attractive pricing versus RCO, which is better rated but with compressed spreads,” says a Mexico City-based debt investor, referring to Red de Carreteras de Occidente’s (RCO) MXP8.12bn sale last month that was seen as reopening the market. Mayab’s bonds are backed by the Kantunil, Merida-Cancun highway revenues. The borrower is looking to finance a 54km road project in the Playa del Carmen region, and to repay existing debt acquired by Mayab before it was purchased by ICA in 2008. BBVA Bancomer, HSBC and Morgan Stanley managed the transaction, rated AA/A2 on a national scale, with Morgan Stanley and Cofinza as structuring agents. With RCOs deal the pair have equaled the number of transactions from last year, and increased the volume from MXP5.2bn. Other types of ABS are on the way in what is a busier market this year, with IAMSA targeting MXP3.5bn in a bus revenue securitization, and the state of Veracruz preparing a MXP6.9bn deal backed by future federal payment flows. The total volume for ABS year to date in Mexico is MXP51.3bn — including RMBS sales and a MXP13.5bn CFE transaction — according to LatinFinance data. This is already an increase from 2011’s full-year total of MXP35.2bn.
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Fovissste Preps RMBS
Mexican government housing lender Fovissste plans to raise up to MXP5bn ($385m) through a domestic RMBS sale, and is targeting a October 30 pricing, according to bankers familiar with the sale. The 30-year bond would be denominated in UDIs and pay a fixed rate. BBVA Bancomer, Banorte-IXE and Santander are managing the sale, rated AAA on a national scale. The government-backed lender last visited the market in August, raising MXP4.8bn in 2042 notes paying 3.85%.
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Mayab Set for Securitization
Concorcio de Mayab plans to raise up to MXP4.5bn ($351m) in Mexico’s domestic bond market today, according to sources familiar with the sale. The ICA-owned concession operator plans a 2034 peso-denominated tranche with an 11.3-year average life, with size of the tranche not to exceed 40% of the total issuance, and a 2034 UDI-denominated portion with an 11.7-year average life and no size limit. The bonds are expected to pay a spread of 400bp-area to their respective benchmarks, according to a person familiar with the transaction. The bonds are backed by Kantunil, Merida-Cancun toll road revenues. The borrower is looking to finance a road project in the Playa del Carmen region and to repay existing debt acquired by Mayab before it was purchased by ICA in 2008. BBVA Bancomer, HSBC, Inbursa and Morgan Stanley are managing the transaction, rated AA/A2 on a national scale, with Morgan Stanley and Cofinza as structuring agents.
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Government Intervenes in Brazilian Bank
Brazil’s central bank has taken control of Banco BVA, it says, after finding violations of industry standards and deteriorating finances. The bank was in need of around BRL1bn ($493m) in capital, according to local news and wire reports, and was unable to find a buyer. The move follows the liquidation of Cruzeiro do Sul last month, and makes BVA the fifth bank seized by Brazilian regulators since 2010. As with Cruziero, the impact on the system is expected to be limited. “This is a small bank that focused on middle market lending whose total assets represented less that only one-fifth of 1% of overall banking system’s assets. This should not be viewed as a systematic problem, but as an isolated event from which we expect no ripples,” Fitch says in a report. The government intervened in the mid sized lender due to “the deterioration of its economic and financial situation and the violations of norms that discipline the institution’s activity.†BVA has 0.17% of the Brazilian banking system’s assets and 0.24% of its deposits, and operates in Rio de Janeiro, Minas Gerais and Sao Paulo.
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BR Malls Retaps Perp
BR Malls has raised $175m through a reopening of its 8.5% NC5 perpetual bond, in order refinance its 9.75% perp callable next year. The shopping mall developer and manager reopened the bond at 108.50, following 108.25-area initial talk, to yield 7.834% to maturity, and 5.62% to the call. Demand was heard to be around $1bn. BTG Pactual and Deutsche Bank managed the sale, rated Ba1/BB. The bond was originally sold in 2011 and now has $405m outstanding. It is the region’s first perpetual sale since a $250m sale from Magnesita in March. BR Malls brings the deal amid a relatively slow week in the DCM. Investors await a likely $500m 10-year from Bolivia, and Santander Chile is working out an offshore RMB deal in Hong Kong.
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Findeter Postpones Securitization
Colombia’s Findeter has postponed a COP250bn ($139m) domestic bond that had been scheduled to price today, according to a source familiar with the process. The new timing is unclear. The securitization of Findeter’s loans was set to have the option of an up to COP120bn 2-year tranche, an up to COP144bn 4-year tranche, and an up to COP136bn 6-year tranche. Findeter is managing the sale, rated AAA on a national scale.
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Findeter Preps Securitization
Colombia’s Findeter is planning to raise COP250bn ($139m) Thursday through a domestic securitization that can be increased to as much as COP400bn. The bonds backed by Findeter’s loan portfolio includes the option of an up to COP120bn 2-year tranche, an up to COP144bn 4-year tranche, and an up to COP136bn 6-year tranche. Findeter is managing the sale, rated AAA on a national scale.
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Mayab Sets Securitization Date
Concorcio de Mayab plans to raise up to MXP4.5bn ($351m) in Mexico’s domestic bond market on October 24, according to sources familiar with the sale. The road operator had initially been targeting a pricing date for the securitization as soon as today. The ICA-owned operator plans a 2034 peso-denominated tranche with an 11.3-year average life, with size of the tranche not to exceed 40% of the total issuance, and a 2034 UDI-denominated portion with an 11.7-year average life and no size limit. The bonds are backed by Kantunil, Merida-Cancun toll road revenues, and the borrower is looking to finance a road project in the Playa del Carmen region extending 54 kilometers and scheduled for construction in the second half of 2012 and to repay existing debt acquired by Mayab before it was purchased by ICA in 2008. BBVA Bancomer, HSBC, inbursa and Morgan Stanley are managing the transaction, rated AA/A2 on a national scale, with Morgan Stanley and Cofinza as structuring agents.
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SBM Marks FPSO Bond Market Debut
SBM Offshore’s SBM Baleia Azul unit has raised $500m in the RegD private placement market, giving LatAm its first bond financing for a floating production, storage and offloading vessel (FPSO). The Baa2/BBB 2027 project bond for the Cidade de Anchieta vessel priced at par to yield 5.5%, SBM says. The transaction has an 8.5-year average life and was placed with 16 institutional investors following marketing that began last month. Finding comps for the bond is not straightforward, but DCM bankers away from the deal suggest the Brazilian drillship bonds backed by similar Petrobras contracts. Schahin’s 2023 (Baa3/BBB minus, 6.75-year average life) was seen trading at around 5.0% Thursday, Odebrecht’s 2021 (Baa3/BBB, 6.25-year average life) at 3.6%. “There is interesting relative value in that SBM has a similar rating, but it could be seen pricing at a premium to the drillships when typically FPSOs are perceived to have less operational risk than drillships,” says a DCM banker away from the deal, noting that, after adjusting for curve and maturity, the bond could have come more than 100bp wide to Odebrecht and nearly flat to Schahin. The pricing level suggests sufficient depth in a market considered to often result in wider pricing than the more broad 144a market. However, SBM is heard selecting the RegD method in order to be able to focus its education process on a select group of investors, with the key task explaining the difference between the FPSO structure and the Brazilian drillship bonds. The issuer may now return to this pool of familiar investors in the future or approach the 144a market with a track record. Bankers away from the deal note that conditions at the moment are supportive of such a trade, making the choice of markets less of a risk. The bonds are backed by future revenues from an 18-year Petrobras contract. Noteholders are assigned a collateral package that includes a pledge of the shares of the issuer and owner of the vessel, as well as a mortgage