UMS Moves Closer to Samurai Sale

United Mexican States (UMS) may issue its Samurai as soon as December as it looks to consolidate its presence in the Japanese market with a transaction that is not guaranteed by JBIC. “Our next step is to issue without a JBIC guarantee and allow [the transaction] to take place in the last month of this year or early January,” Alejandro Diaz, the country’s head of public credit, tells LatinFinance. The sovereign has typically tapped the Samurai market using guarantees from JBIC, but has long hoped to sell plain vanilla bonds in this country. Mexico is flexible on size and tenor depending on risk appetite among Japanese investors, but ideally it is looking at a JPY-40-50bn ($519m-$649m) 5 or 10-year “We understand the first issuance may be in the lower part of the curve and we don’t have a problem with that,” Diaz says The sovereign would follow in the wake of America Movil (AMX), which in October became the first LatAm corporate to issue a Samurai without a JBIC guarantee. At the time, AMX tested the waters with a JPY12bn ($156m) a dual-tranche issue, selling a JPY6.9bn 3-year at par to yield 1.23% or yen Libor+80bp, and a JPY 5.1bn 5-year at par to yield 1.53% or yen Libor+100bp. UMS last issued in the Samurai market in 2010, when it placed a JPY150bn ($1.8bn) 10-year to yield 1.51%. Citigroup, Bank of Tokyo Mitsubishi, and Nomura took the sovereign to meet Japanese investors on a non-deal roadshow in August and will most likely assist with the next Samurai transaction, Diaz says.