Issuers Prep Mexican DCM

Mexican silver miner Penoles and Central American development bank Cabei are expected to price bond transactions today in Mexico’s domestic market. Penoles is planning to issue $600m via BBVA, Santander and HSBC. Looking for liabilities that match cashflows, the company pulled an up to MXP7bn issue in June because it failed to find an acceptable FX derivative structure to swap the issue back into dollars. Proceeds from the deal, rated Aa1 on a national scale, will go towards refinancing debt and financing investment. Penoles is a leading producer of refined silver, claiming an approximately 11% market share globally, and also lead and zinc. Cabei is expected to issue between MXP500m-MXP750m via Banamex, says a lead banker. The triple A bonds will have a maturity of 10 years and pay a spread over TIIE. Cabei, seeking to grow its lending portfolio to support infrastructure projects, last came to the Mexican domestic market in 2008. It has 9 outstanding bonds in the market, worth a total $400m, with maturities of 2-12 years. Cabei has done 50%-60% of its funding for 2010, having pre-funded $500m in 2009.