Urbi Expands Issue on Hefty Demand

Mexico’s Urbi has sold $300m in new 10-year bonds, upsizing from $250m on the back of $1.1bn in demand from more than 100 investors. The 2020 NC5 sale hit the tight end of yield guidance and continues the trend of successful Mexican cross-border taps from the homebuilding sector. “There has been a lot of interest in the sector, and Urbi is the best among its peers operationally,” says a European-based EM investor looking at the deal, noting that the concern that many buysiders might be filled up on homebuilders does not seem to have borne out. The Ba3/BB deal priced at 98.424 with a 9.500% coupon to yield 9.750%, or UST plus 596bp, the tight end of 9.875% price guidance and of 10%-area early whispers. The yield matches what Ba3/BB minus compatriot Homex scored on its $250m 2020 NC5 in December. That note trades to yield about 9%, according to a trader. “From a relative value perspective, they paid less of a premium than Homex did in December,” says a banker on the deal. He spots a spread of 90bp versus Uribi’s 2016s, compared to the 120bp-130bp spread between Homex’s 2016s and its new 2020s at issue. The trader adds better market conditions and increased investor familiarity may have also helped Urbi. Deutsche Bank and Santander managed the sale. Urbi’s deal marked its first dollar sale since a $150m 8.500% 2016 sold in 2006 via Merrill Lynch and UBS, according to Dealogic.