The lead banks in a planned issue of Ps6bn (US$473m) worth of Telefonica bonds in Mexico have been reported declining comment on the progress of the issue after taking advice from the Mexican government last night.
However, they confirmed to Latin…
The lead banks in a planned issue of Ps6bn (US$473m) worth of Telefonica bonds in Mexico have been reported declining comment on the progress of the issue after taking advice from the Mexican government last night.
However, they confirmed to Latin Finance that the auction will take place today. Bankers from BBVA Bancomer, Santander and HSBC had been expected to give official notice on the AAA-rated issue yesterday. It did not go ahead, though, since they had had not yet received feedback from some major investors.
A handful of Mexican buy-side brokages told Latin Finance they would not be participating in the auction, because of the potential impact that Telefonica’s proposed takeover of Brazilian mobile operator Vivo might have on the overall rating of the company.
The Telefonica Finanzas Mexico unit wants to raise capital to refinance existing debt and hope that this floating-rate note will be well subscribed.
Investors say that the pricing of the 2020 fixed rate tranche will fall in the range of Mbonos plus 120bp to 140bp.
However, some brokerages argued that a Mbonos plus 160bp to 180bp range and TIIE plus 100bp would be more appropriate given the potential M&A risk.
This bond will be the company’s first issue in Mexico since 2006, when Telefonica’s Mexican arm raised Ps4.5bn (US$355m) in floating-rate notes with a September 2010 maturity.
