Investors Download Telmex Floater

Telmex has sold MXP8bn ($596m) in domestic 2 and 4 year floating rate bonds, highlighting continued demand for blue chip issuers in Mexico. The telecom, cable and broadband provider priced MXP4bn in 2011 bonds at TIIE plus 74bp and MXP4bn in 2013s at TIIE plus 95bp. Total demand reached about MXP15bn, according to bankers managing the transaction, rated AAA on a national scale. Proceeds are marked for general corporate purposes, including debt refinancing. Inbursa and BBVA managed the sale. Telmex placed the maximum amount it had filed for, following in the footsteps of jumbo offers from Bimbo, Pemex, and CFE in the last 3 months. Prices continue to creep downward for AAAs, with Telmex paying in line with what quasi-sovereign Pemex paid for a 2012 floater in May. Bottler Arca got TIIE plus 100bp on a 2012 June 3. The next blue-chip to test the market should be Femsa, with a fixed and floating issue of up to MXP6n through BBVA and Santander expected as early as next week. Since the beginning of April, 4 of Mexico’s top issuers have sold MXP42bn to Afores, insurance companies and mutual funds.