Veracruz Preps Securitization

The Mexican state of Veracruz is preparing to raise up to MXP6.9bn ($540m) through a securitization of future federal payment flows, according to offering documents. Veracruz is targeting three separate tranches of MXP2.3bn each – a 15-year fixed-rate peso-denominated tranche with an 11-year average life, a 25-year UDI-denominated portion with a 19-year average life and a 15-year peso portion paying a spread to the TIIE with an 11-year average life. The bonds feature a guarantee from Banobras for up to 45% of the total size per tranche. Proceeds will be used for part of the state’s MXP30bn refinancing plan, as it seeks to refinance liabilities and improve its debt profile. The bonds are expected to price October 24. Banamex, Banorte-Ixe and BBVA Bancomer are managing the deal, rated AA/AA+ on a national scale.