Elektra Preps Pricing After Releasing Guidance

Mexican Retailer Elektra is out with guidance of 7.5% area on a $350m RegS 7-year NC4, falling in line with earlier investor estimates of 7%-8% and coming at the tight end of mid-to-high whispers. Books are closing this morning and pricing is expected as soon as today. By early Wednesday leads were receiving sufficient orders to hit the$350m target, and while some international investors have been somewhat ambivalent about the credit, locals are thought to like a name that is well known in Mexico. Accounts from Latin America, Asia and Europe are also heard to be showing interest. At 7.5% area, pricing is seen as fair from a relative value perspective with some eventual upside in secondary trading. “For new issue liquidity or some diversification, do it,” writes one trader. “But it doesn’t light my fire tremendously. More campfire than bonfire.” As comps this trader was looking at Mexican financial names such Financiera Independencia and Credito Real, which have 2015s trading at 7.9% and 8.0%, as well TV Azteca’s 2018s which have been quoted at around 7.1%. Whether TV Azteca will be able to come at the tight end of the 7.5% area is still a matter for debate, with some investors already drawing a line at the level. “If it is tightened below 7.5%, we will not participate,” notes a European bond investor who has both TV Azteca and Mexican retailer Famsa in his portfolio. Famsa 2015s have been trading at around 8%. Investors are told the company plans to use $250m from bond proceeds to finance debt with the remainder for capex plans. The unsecured notes have a BB Fitch rating. BCP, Jefferies and UBS are leads.