Arca Bags Demand for Peso 2-Tranche

Mexican bottler Embotelladoras Arca has sold MXP1.5bn in domestic bonds, including MXP1bn in 2012 notes at TIIE plus 100bp, and MXP500m in 2016s at a fixed 9.75%, or Mbonos plus 190bp. Demand reached MXP4.2bn for the 2012s and MXP1.8bn for the 2016s, according to a banker managing the sale, pointing to improving local market conditions and strong appetite for defensive credit. Last month, quasi-sovereign Pemex paid TIIE plus 90bp for 2012 floaters and Mbonos plus 156bp on a fixed 2016 tranche. Arca, like Pemex is rated AAA on a national scale. Arca plans to use proceeds to pay back bilateral loans due this year to BBVA, Bank of America and HSBC, which also managed the bond transaction. Arca last issued in February, paying TIIE plus 155bp for MXP1.4bn in 13-month bonds, in one of the first transactions of 2009. This year’s Mexican market is still far from active, but other blue-chips are on the way. Bimbo is set to bring a 5 and 7-year bond June 10, expected to be at least MXP3bn in size, and Femsa is due with a sizeable transaction in late June or July.