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CFE taps active domestic bond market

Nov 14, 2013

Mexico’s local DCM remains open for business. A deal from CFE could be followed by other blue chips.

Mexico's domestic bond market remains a useful option for the country's higher-rated issuers, as well as smaller borrowers looking to offer securitizations. Wednesday saw a 10 billion peso ($768 million) transaction from the Comisión Federal de Electricidad (CFE) The state-owned utility sold new 10-year bonds and retapped five-year floating rate notes.

Broadcaster Televisa has also been marketing a 10 billion peso transaction, targeting 10 and 15-year notes. América Móvil has indicated that it intends to return to its quarterly retaps of the titulos de credito extranjeros global peso securities, and has been evaluating the markets for a deal this month.

Food products maker Herdez joined the CFE Wednesday, raising 3 billion pesos.

In the bank space, HSBC Mexico plans to issue up to 5 billion, what would be the bank's first domestic bond in four years. It would follow am 11 billion peso bond from Carlos Slim's Banco Inbursa last week.

Fibra Uno is preparing to issue the first local bond from a Fibra real estate trust. The fund could offer as much as 18 billion pesos.

Vitro also was preparing a return Thursday, to raise 1.2 billion pesos. The three-year floating-rate deal backed by accounts receivables would be the glassmaker's first local bond since before its bankruptcy process.

It would follow a 550 million peso transaction from Arrendadora y Soluciones de Negocio Wednesday, backed by accounts receivables.

Elsewhere in the ABS space, the government of Mexico's Distrito Federal is preparing to issue up to 3 billion pesos of bonds backed by future revenues passed down from Mexico's federal government. Lender Consubanco is preparing a 1 billion deal backed by payroll loans.

Mexican issuers have raised $14.08 billion-equivalent in the domestic market through Wednesday, according to Dealogic and LatinFinance data. This is up from $11.55 billion-equivalent in the corresponding period of 2012.LF



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