MXP Debt Pipeline Advances Slowly

Mexico’s local bond pipeline is still in motion, although a few larger deals appear to have fallen foul of regulators and the World Cup. Recent deals from Pemex and Liverpool set benchmarks and prove there is investor appetite. Penoles could see its eagerly awaited MXP debut as soon as next week, bankers on the deal say, as it still must clear final regulatory hurdles that kept it from pricing this week as hoped. The silver miner wants to sell up to MXP7bn in 10-year fixed-rate and 5-year FRNs basis TIIE. BBVA Bancomer, HSBC and Santander are managing the sale, rated AA+ on a national scale. Elsewhere, Telefonica is roadshowing this week and heard still aiming for the last week of June to place a MXP6bn 2014/2020 deal from its Mexican unit, also via BBVA, HSBC and Santander. And State of Mexico should bring as soon as that week a novel MXP4.3bn 20-year deal securitizing future flows of income from residential property title fees, which was delayed from the beginning of the month, also by the regulator. Finally, Mexico City’s securitization of tax proceeds from the federal government is expected June 23. The government, which had been considering pricing yesterday, has the option of spreading the MXP2bn issue among a 2015 tranche basis TIIE, a 2020 paying fixed, and a 2025 portion denominated in UDIs. Deutsche Bank is managing the sale, rated AAA on a national scale. Retailer Liverpool sold May 28 MXP2.25bn in 2020 bonds at 8.53%, or Mbonos plus 128bp, and MXP750m of 2020s in UDIs at 4.22%, or Udibonos plus 92bp. This should indicate the level for AAA corporates. Previously, quasi-sovereign Pemex had reopened markets with a MXP15bn May issue. It sold MXP8.5bn in new 2014 floaters at TIIE plus 44bp, reopened for MXP5bn its 9.1% of 2020 fixed-rate bonds to yield Mbonos plus 113bp, and also placed MXP1.5bn 4.2% of 2020 in UDI-denominated bonds to yield Udibonos plus 80bp.