Femsa MXP Financing Cost Spikes

Coca-Cola Femsa has priced MXP2bn in 14-month bonds at 80bp over 28-day TIIE, according to bankers managing the transaction. Demand reached MXP3bn, according to a banker on the sale. This is big jolt versus Femsa’s last local issue, a May 2008 sale of MXP1.5bn in 2011 bonds that priced 2bp through TIIE. The 28-day TIIE was at 8.1% Wednesday, versus 7.9% last May. The bottler placed the maximum it had filed for, but decided against allocating part of the issue in fixed-rate bonds of up to 5 years. According to S&P, which rates the deal AAA on a national scale, the deal could have gone out as long as 2011. KOF plans to use proceeds to help repay 9.9% bonds maturing in July, and for general purposes. Banamex and HSBC managed the transaction, the first plain vanilla corporate of 2009 in the local Mexican bond market, according to Dealogic. The last AAA corporate was America Movil’s MXP3bn in 2013s at Cetes plus 55bp and MXP2.1bn in 2013 UDI-denominated notes at the Udibono plus 60bp.