Iberdrola Downsizes Innovative MXP Bond

Spanish utility Iberdola had to significantly reduce the size of its innovative Mexican peso-denominated bonds to MXP1.5bn, owing to limited interest in a deal the leads claim is the first locally-registered MXP placement by a foreign corporate. The 2018 notes pay a fixed 10.23% coupon, 94bp wide to comparable Mbonos and just inside initial guidance of 95bp. The issuer had been targeting both fixed and floating-rate tranches totaling about MXP3.5bn, but it was heard forced to scale back due to choppy market conditions. Iberdrola plans to swap the interest rate as part of the transaction, and was heard to have found a floating-rate Euribor swap unattractive in the current market. Demand reached 1.6x the reduced size, according to a banker managing the sale, which was rated AAA on the national scale. Iberdrola, which has a considerable asset base in Mexico, plans to use proceeds for general corporate purposes. Banamex and Bancomer managed the transaction, which was delayed by a week. Iberdrola registered to sell up to MXP5bn in Mexican bonds and did a roadshow in June.