Bimbo Builds Loan Benchmark

A Mexico City bank meeting for Mexican breadmaker Bimbo’s $1.7bn in 3 and 5-year loans was heard well attended, drawing more than 100 people, and fees are expected to emerge after today’s sequel in New York. It is not clear whether full attendance Tuesday was due to the fact that Bimbo is the only show in town – or if bankers actually like the margins – but the transaction is being closely watched by a market sorely lacking benchmarks. After a downgrade, the margin is now 275bp over TIIE or Libor on the short end and 325bp on the 5-year, up 25bp versus last month, based on a ratings grid. Bank of America, BBVA, Citi, ING, HSBC and Santander are the leads. Fees were initially heard at 150bp on the 3-year and 175bp for 5-year, but they are expected to be sweetened. The deal marks the first real syndication since Angamos closed its $1.75bn project loan in November. Bimbo is viewed as a decent investment grade company with a compelling story, including a recent cross-border push into US bread. Proceeds support a $2.3bn M&A facility assembled late last year. Successful syndication for Bimbo would bode well for LatAm’s barren bank market landscape and should raise the confidence of reluctant lenders. Failure – or limited demand for such a high quality credit – would reaffirm the notion that the LatAm bank market remains shut as lenders hoard scarce liquidity.