Mexico's equity issuers are set to keep up with a record
pace, reloading the pipeline for what should be an active
June-July issuance window.
Issuers have sold $4.52 billion so far this year from six
transactions, according to Dealogic data, all in the first
three months, a pace that is Mexico's fastest ever. It sets the
country up to pass last year's total of $9.09 billion from 10
deals, which bankers fully expect to happen.
Carlos Slim's Grupo Inbursa is readying an all-secondary
sale, which will provide an exit platform for
Spain's CaixaBank to sell as much as half of its 20% position
in Inbursa and bring much needed capital back to Europe. The
sale should raise at least $1 billion.
Hotels continue to offer investors a means to play the
Mexican economic growth story. Concentradora Fibra Hotelera
Mexicana (Fibra Hotel) will look to top up on growth funds
follow-on. The business hotel-focused member of
Mexico's small but growing Fibra real estate fund investment
class raised $324 million in an IPO last year, and is expecting
to raise more than that in the upcoming deal, to be held as
soon as at the end of the month. The shares have gained more
than 30% since the IPO.
Hoteles City, Mexico's third-largest hotel chain, is
preparing to become the latest Mexican to
The transaction is expected to raise less than $500
Industrial real estate specialist Vesta also intends to hold
a follow-on, according to regulatory documents.
Property-related issuers have accounted for the bulk of sales
this year, boosted by the IPO of Fibra Inn ($350 million) and
Prudential's Terrafina Fibra ($340 million), and the $1.73
billion follow-on from Fibra Uno.
Though it has become fashionable to call Mexico's equities
expensive compared to, say, Brazil, if the growth numbers
remain reasonable and the new government's reform agenda stays
on track, investors - particularly the flush domestic pension
funds - should support the new issuers this year.
Nomura remains optimistic about the reform agenda, it says
in a recent report, though less certain about the timing.
"We remain positive about the reform outlook, but expect the
most of them during the ordinary session of congress that
starts in September as opposed to in the summer (at least for
the energy reform)," the bank says, noting an expectation for
minimal progress before local-level elections in early