MGE Seeks 5-Handle

Mexico Generadora de Energia (MGE) is out with initial price thoughts of mid-to-high 5%-area for a $564.2m 2032 bond, expected as soon as today. The Grupo Mexico-controlled electric power generation project wrapped up fixed-income meetings with US and LatAm accounts Wednesday. The Baa2/BBB bond features a 13-year average life. The 500 megawatt gas-fired electrical power facility has a 20-year power purchase agreement to supply Grupo Mexico’s Mexicana de Cobre and Buenavista del Cobre mines. The project is being developed in two phases, which are 88% and 51% complete, respectively. The bonds come with collateral of first priority security on all assets, collection rights under contracts, and equity interests of the issuer. Bank of America Merrill Lynch, HSBC and Morgan Stanley are joint bookrunners, with Morgan Stanley as sole structuring agent.