Mexican Miner Talks Price

Mexico’s Cobre del Mayo (CDM) is out with 11%-area price talk for a $200m-$250m bond, according to sources close to the deal. Executive chairman John Detmold told LatinFinance last week Cobre was targeting a bond with a likely 5-year tenor at that range. The roadshow, extended through today, will look to price this week. A deal would represent an international bond market debut for the B3/B Mexican mining company. CDM would refinance most of its total debt of $210m with the proceeds, pushing out the maturity profile to 2019. It also has a $100m undrawn unsecured revolving credit facility available from Banco Azteca expiring in 2021. To determine pricing, CDM has been looking to single-B credits like Marfrig’s 2020, seen trading around 10.3%, and Gol’s 2020, around 11.5%. Cobre’s liquidity position is sufficient for the rating category, according to Fitch ratings, which notes a position including $6m cash and marketable securities, $22m in short-term debt, and 2.1x total debt-to-Ebitda. Jefferies, BCP Securities and Nomura are managing the RegS-only process. The issuer operates Mexico’s third-largest copper mine, Piedras Verdes. CDM is 71.24% owned by Frontera Copper Corporation (FCC) of Canada, a company in turn 100% owned by the Mexico’s Invecture Group, with the remaining 28.76% owned by Lawrie Associates. Opening in 2006, development of Piedras Verdes was suspended in 2008 due to low copper prices, sold to Invecture in 2009, and restarted.