Issuers chart new trades ahead of AMLO inauguration

Issuers chart new trades ahead of AMLO inauguration

Capital Markets Bonds Mexico

Mexican bond issuers are charting new sales in order to complete debt raising plans before President-elect Andrés Manuel López Obrador (AMLO) is inaugurated near the end of 2018.

At least four trades - Minera Frisco, BNP Paribas Personal Finance, GM Financial and Inmobiliaria Vinte - are expected to hit the screens in the coming weeks, according to two sources who spoke to LatinFinance on Wednesday.

Investors were reluctant to commit to new corporate and financial institution-related debt in the build-up to the Mexican election on July 1, leaving the new issue tap dry throughout June and early July.

"[Investors] waited for this to subside," one DCM banker in Mexico City said of the recent presidential election.

Uncertainty over NAFTA negotiations also kept would-be issuers at bay in recent months. However, one of the two sources said future talks between the US and Mexico would not take greater shape until 2019, once AMLO took his place at Los Pinos and after the US mid-term Congressional elections later this year.

The time, therefore, between victory and inauguration is set to serve as a prime issuance point for Mexican credits.

Mexico's 10-year government bond, or 2028 Mbono, was trading at around 7.67% in secondary markets, while the country's 28-day floating TIIE was spotted at 8.09% on Wednesday.

"Curves are also inverted right now, which has been a big talking point among investors," the second source in Mexico City said.

Pipeline

Miner Minera Frisco is after MXN5bn ($260m), Homebuilder Vinte is planning a MXN750m sale and GM Financial is also tapping investors for at least MXN2bn, sources said.

Trades from a Mexican real estate investment trust, or fibra, are due, along with issuances from other financial institutions and a Mexican airline, one of the sources added.