Mexican Bottler Eyes Bond Sale

Embotelladoras Arca is targeting Wednesday for the issuance of 13-month bonds, according to a banker managing the sale. The Mexican bottler is heard eyeing around MXP1bn in floating-rate notes and has filed for up to MXP2bn in either fixed or floating. Arca plans to use proceeds to help repay MXP2.3bn in bank loans carrying 11.5% interest due in April and November taken out from Inbursa and BBVA, which are also managing the new issue. The deal is seen as an important test for AAA issuers trying to find a benchmark in the local market. It follows a MXP2bn placement of 13-month paper from competitor Coca-Cola Femsa at TIIE plus 80bp in January. Bankers not running Arca say it will likely price more than 100bp over TIIE, citing credit differences and likely less retail involvement for the pickup versus Femsa, which was anchored roughly 50% by individuals.