Mexichem Clinches Well-bid Equity Sale

Mexichem has priced a MXP15.6bn ($1.21bn) follow-on equity offering, coming at a 2.9% discount and drawing 4x demand. The industrial conglomerate priced 260m shares, assuming a 15% greenshoe is used, at MXP60.00 each, according to sources familiar with the sale. The level compares to Tuesday’s MXP61.82 closing price. About 60% of the tranche was expected to be allocated to international investors, and 40% to Mexican-based buyers. The strong international bid suggests investors are still keen to get their hands on Mexican assets, even as they become more sensitive to high valuations in the country. Including the greenshoe, the all-primary deal represents 12.4% of the company’s shares. Mexichem is raising funds for general corporate purposes, including expansion projects and working capital. Citi, HSBC, JPMorgan and Morgan Stanley managed the international portion of the transaction, joined by BBVA on the Mexican portion. The sale follows a $1.15bn international bond sale last month drawing 17x demand, as Mexichem continues to raise funds following the $500m acquisition of Dutch pipe maker Wavin. The deal is Mexico’s largest follow-on since Cemex’s $1.87bn sale in 2009, according to Dealogic data. Credito Real is set to finish what should be the most active four weeks of Mexican equity issuance in recent memory, with an IPO expected to raise $200m-equivalent scheduled for October 16.