Banamex Plans Debt CCD

Banamex has filed for a new certificado de capital de desarrollo (CCD) issuance in the Mexican market, but with a twist. Unlike most CCDs, this fund will invest in debt rather than private equity, with the idea of providing the Afores with a broader – and higher-returning – array of debt investments. Afores have had a limited menu of investment options in the Mexican market where, according to the filing, between 2003-2011 just 16 issuers have accounted for over 80% of certificados bursatiles offerings, and almost all of them had a local rating of double A or higher. In contrast the new CCD will invest not only in plain-vanilla debt, but also in subordinated, high-yield, private, mezzanine, and distressed debt, as well as pre-IPO lending and structured finance. Similar to most other CCDs, holders will receive all proceeds until 105% of their investment is returned, and after that, 85% of the proceeds. No size has yet been put on the 7-year deal, though most CCD transactions raise MXP1bn-MXP4bn ($80m-$325m). It will join a relatively long queue of CCD issuers that have been waiting in a pipeline in what has been a slow year for the asset class. With the debate over capital calls finally settled, it is hoped more CCDs will see the light of day. Credit Suisse is managing the transaction, and will also invest 10%.