CFE Readies $2bn Loan

Mexico’s Comision Federal de Electricidad (CFE) is preparing to roll out a $2bn syndicated loan next week, say bankers close to the process. The BBB+ rated state-owned utility has already secured five banks to lead the process. BBVA, RBS, BNP and Santander are heard as bookrunners, with Citi also participating in a senior role. Pricing on the 3-year facility is still forthcoming, say bankers. The margin on the deal may become a market reference for Mexican corporates, given the size and timing, say bankers away from the process. Earlier this year, bankers were sounding out the market for pricing on CFE. Wherever it comes, the price will reflect market conditions, say bankers on the deal. That suggests something wide to the 25bp over Libor the borrower is heard to have sought last year. Most of the proceeds are being used to refinance bank debt, some of which matures at the end of the year. In November, CFE priced MXP1.2bn in local 2017 bonds at 30bp over Cetes.