Chile’s BCI Heads to Mexican DCM

Chile’s Banco de Credito e Inversiones (BCI) is looking to issue up to MXP3bn ($250m) in 5-year floating rate bonds in Mexico, becoming the second-ever Chilean borrower to try its luck in Mexico’s DCM. Investor meetings should start in the next few weeks, with pricing expected by the end of July, says a banker on the transaction. The borrower has decided to come to the Mexican market to diversify its investor base and because it considers Mexico to be a country with a deep investor pool, the banker adds. Domestic accounts welcome the debut issuer, but they will require more time to analyze an unfamiliar credit from abroad. “In general terms it is a good name, and we like the credit risk,” says one asset manager. “But we will need to do more analysis than we usually do compared to a bond by a local name, and a lot of follow-up needs to be done on country risk,” he adds. Still, an investment-grade credit such as BCI will be welcomed in a market that offers investors few chances to diversify away from the handful blue-chip names that populate Mexico’s DCM. “This sort of AA rated issuer from another country is very good for the portfolio, and we would definitely welcome more opportunities to diversify our investments with credits from other countries,” says a second investor. A third member of the local buyside adds that while in principal he considers BCI an attractive name, the pricing would determine whether he would buy the paper. The company has not specified whether it will swap the currency yet, but with only one representative office in Mexico and no other operations in the country, it is likely to revert to either USD or CLP. Proceeds are for general corporate purposes. HSBC is managing the sale, rated AAA on a national scale. BCI would follow Chilean mining company Molymet, which has mining operations in Mexico and has done three MXP bond issuances. The last was in April, for MXP1.5bn in 1.5-year bonds priced at TIIE+ 55bp. In the most recent AAA bank bond dea