CFE plugs in local bonds

CFE plugs in local bonds

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Energy Electricity Project & Infrastructure Finance Mexico

Mexico's CFE plans to raise up to MXN7.5bn ($392m) from a three-part bond deal in the local market on November 11, according to a document filed with the BMV stock exchange in Mexico City.

The state-owned electric utility company has hired BBVA and Scotiabank to coordinate the sale. It plans to use the proceeds to redeem MXN5.5bn in bonds due this year and invest in new generation projects, it said in the filing.

CFE will divide the deal into floating-rate notes that mature in 2022, fixed-rate notes that mature in 2026 and inflation-linked, UDI-denominated bonds that mature in 2029, it said in a presentation.

The company had MXN1.32tn in net debt at the end of June this year, according to the presentation. Since then, CFE refinanced MXN8.81bn in loans from its Pidiregas financing program and cut costs by almost MXN3.8bn over the next three years.

The utility has also saved around $4.5bn by renegotiating contracts for natural gas pipelines with Grupo Carso, IEnova, TCEnergy and Fermaca.

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