Mexicans Clinch Deals as Local DCM Remains Open

While other regional markets have slowed to a stop, Mexico’s domestic bond market remains active, with Banorte raising MXP3.2bn ($232m) in subordinated bonds and Infonavit scooping up MXP1.97bn Wednesday. “Investors are looking for new names to diversify funding, but those names have to be solid names with a good rating of minimum AAA or AA,” says a Mexican DCM banker. Such was the case for Mexican mortgage and social services entity Infonavit, which raised MXP1.97bn, through the Infonavit Total unit, in UDI-denominated RMBS 2040 bonds. The 4.20% pricing comes inside of the 4.60% it saw on a previous issuance. Demand hit 2.5x, and at least 75% of the sale was allocated to pension funds, according to a banker on the deal, with the remainder coming from private banking, bank treasuries and insurance companies. Banorte issued MXP3.2bn in a 10-year NC5, at TIIE+150bp, inside price thoughts of TIIE+175bp. Ixe led the AAA-rated deal. Demand was heard driven by institutional investors and retail accounts. “Outside of Mexico there is volatility, but there is a lot of liquidity and stability in Mexico,” says another DCM banker, noting that spreads have remained stable this year. With pension funds showing appetite, more names are waiting in the pipeline. Holding Monex is scheduled to raise up to MXP1bn today in what would be its domestic market debut. The financial services company’s 2015 notes will be issued under a MXP2bn program, and pay a spread to the TIIE. BBVA Bancomer is managing the transaction, rated A on a national scale. Next week, issuers will try to break the FIG dominance of the market. Holcim Mexico was scheduled to issue up to MXP3bn June 13, at 5 and 10-year maturities. Banamex, BBVA, and Santander are managing. Also on that day, Penoles is to issue $200m-$240m in 10-year dollar-denominated bonds, through Banamex, BBVA Bancomer and Santander. Mexicans have issued $3.09bn-equivalent this year through Wednesday, according to Dealogic data, down from $6.58bn-e