Penoles Tweaks Structure on Local Deal

Mexican silver miner Penoles is looking to issue $600m of debt on Mexico’s local market, after changing the format and growing the size from a much anticipated issue pulled in June that was expected raise up to MXP7bn. The “Mexican long-term USD denominated local notes,” as Moody’s describes them, will be guaranteed by principal subsidiaries, excluding Fresnillo. BBVA, HSBC and Santander are heard managing the sale. Investors expect it to be a dual tranche 10 year fixed and 6-year floating rate deal. Proceeds will go towards refinancing debt and financing investment. The miner did not go ahead with what was meant to be its debut bond issuance in June because it failed to find an acceptable FX derivative structure to swap the issue back into dollars, its main earning currency, according to investors. Moody’s assigns the bonds a Baa2 senior unsecured foreign currency rating and an Aa1.mx national scale rating. Moody’s also assigned a Baa2 global local currency issuer rating to Penoles. The rating considers the number of regions in which the company operates, the diversity of metals produced, and the integrated nature of the business. Penoles is a leading producer of refined silver, with an approximate 11% market share globally and an important producer of lead and zinc within the LatAm.