Sempra Ready for MXP Debut

Sempra Mexico is scheduled to issue up to MXP5.2bn ($412m) in Mexico’s domestic bond market today. The Mexican unit of US-based Sempra Energy is able to choose among a 2018 tranche paying a spread to the TIIE and a 2023 fixed-rate tranche. A deal would not only be the issuer’s first, but would also represent the first domestic bond from a non-government energy sector issuer. CFE and Pemex – the government-owned energy sector companies that are regular domestic issuers – offer pricing reference points. The deal is expected to offer a pickup to the two, according to people following the sale. Deutsche Bank, Credit Suisse and Santander are managing the transaction, rated AAA/Aaa on a national scale. In October, Sempra Mexico won a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora, which should require a $1bn investment including proceeds from the bond sale, according to ratings agency reports. Sempra operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts.