Telmex Issues 4.5 Billion Peso Bonds

Mexican telephone operator Teléfonos de México (Telmex), owned by local business magnate Carlos Slim, has made an offering of 4.5 billion ($428 million) 10-year peso bonds. The bonds, which mature in 2016, carry an annual interest rate of 8.75% and are rated BBB+ by Standard & Poor’s and A2 by Moody’s. This is only the second ever peso-denominated local corporate issuance in Mexico. The first was made last November by another of Slim’s companies, cell phone operator América Móvil, which sold 5 billion pesos ($476 million) of 10-year bonds. Meanwhile, Telmex has lost a case to claim back 9 billion pesos of income tax on share buybacks made between 2002 and 2004. Mexico’s Supreme Court ruled against the company which was trying to have the tax declared unconstitutional following changes to the income tax laws in 2002. The company says the ruling will have no financial impact as it has already made the deductions.