AMX Makes Statement with EUR-GBP Offering

Taking advantage of a bout of stability and improved sentiment, America Movil (AMX) returned to the euro and sterling markets Monday to raise more than $2bn equivalent, proving that this sector is open to other blue-chip LatAm names at comparatively attractive prices. Petrobras is heard to be in discussions about its own debut in Europe and bankers are certainly pitching other quality names on the idea. This week’s European summit is expected to result in a clear resolution to the Continent’s debt, but clearly has the potential to send markets reeling again. Still, with European corporates facing troubles of their own, bankers are telling investors that LatAm is a good diversification play into growing markets. Yesterday’s deal allowed the Mexican telecom giant to fulfill its earlier promises of maintaining a lasting presence in both markets, while also offering it comparatively attractive funding costs. First emerging with guidance of mid-swaps plus 185bp-190bp, the A2/A/A wireless operator priced EUR1bn ($1.39bn) in 2019 bonds at 99.049, with a 4.125% coupon, to yield 4.268%, or mid-swaps plus 180bp. It also printed a GBP500m ($800m) 2026 tranche at 99.280, with a 5% coupon, to yield 5.007%, or gilts plus 217bp, inside guidance of 220-225bp over. The euro portion drew EUR3.5bn in orders, while the GBP deal saw demand of GBP2bn. Last week accounts had started voicing some interest in an AMX trade as volatility began to subside. This came just weeks after the company had visited investors in Europe via Deutsche. However, new issue premiums of between 30bp-50bp being paid in euros threatened to be a stumbling block for the price sensitive issuer. The borrower was heard focusing instead on relative value, looking at where AMX historically traded against Europeans peers and trying to price inside those levels. For instance, spread differentials with France Telecom’s interpolated euro 7 and 11-year points on the curve had traditionally been about 33bp and 45bp, though t