CFE Seeks Tighter Margins

Mexico’s CFE, the federal electricity commission, wants to re-finance a $2bn 3.5-year term loan after seeing the attractive spreads recently achieved by Mexican telecom America Movil and Brazilian mining company Vale, say market participants. Bankers have not received RFPs, but the company is sounding them on pricing levels. The loan that closed in December was priced at 130bp over Libor, with Bank of America Merrill Lynch, BBVA, BNP Paribas, Bank of Tokyo, Citi, Intesa, RBS and Santander acting as bookrunners. The transaction pre-financed a $1.7bn revolver which matured in May. CFE is following in the footsteps of oil company Pemex, which is also looking to re-finance a $3.25bn dual-tranche loan that closed last December. Both state-owned credits are thought to have been inspired by attractive spreads seen on America Movil and Vale’s recent syndications. Vale priced its $3bn 5-year at 65bp over Libor. America Movil priced a $4bn dual-tranche deal, with a $2bn 3.5-year tranche coming at 50bp over Libor and a $2bn euro-equivalent loan at 60bp over Euribor.