America Movil CFO Defines Pricing Through Pemex

Leading Mexican issuer America Movil priced this week’s local deal more than 40bp through state-run Pemex, CFO Carlos Garcia Moreno tells LatinFinance. A MXP7.00bn 10-year paid 8.60%, or MBonos+95bp, while Pemex was at 138bp, says Garcia. “We were well through Pemex. It was a great execution,” he adds. Garcia says some local banks had started pitching the issuer pricing flat to slightly wide to Pemex. A MXP4.60bn 5-year tranche paid TIIE plus 40bp, versus TIIE+70bp for the state oil monopoly. Garcia has strong praise for leads Banamex, which America Movil has not used locally in several years, as well as Inbursa and Santander. The first large non-government corporate bond in Mexico’s domestic market this year raised almost MXP15bn. It drew more than 100 orders that were well diversified, including large Afores’ tickets on the 10-year, says Garcia. Contrary to local expectations, the CFO says the 15-year tranche was widely distributed, including to insurance companies and Afores. The MXP3.28bn 15-year UDI-denominated piece priced at 51.5375 with a 0% coupon, for an annual interest rate of 4.41% compound. The price is 100% discounted at a 6.20% annual rate. “We had the expectation that long-duration UDIs were going to be well received,” says the official. He adds that the book on the long end was at least MXP4bn, though at a slightly higher price for the full amount. Total demand topped MXP18bn, according to bankers managing the sale. It was rated AAA on a national scale. The issue will be followed by a dollar issue this year, after roadshows in Q2. The local trade is the first from America Movil since it announced it will take control of Carso and Telmex via M&A expected to forge the world’s third biggest telecom.