LatinFinance - July/August 2015 - 42

tight pricing.
In October, two months after the
Mexican congress put the final touches on
energy reform geared toward luring private
investment into the sector, Pemex sold a
$1 billion 2025 bond and added $1.5 billion
in 2044 notes. The deal was heard to be
heavily subscribed, allowing bookrunners
to wrap up the transaction in less than four
hours. The 2044 reopening locked in tight
pricing, a 10 basis point-premium to where
its existing 2044 notes were seen trading
on the day of the sale.
Investors put in 57 billion pesos of
orders for a 12.5 billion peso note, allowing

MARIO BEAUREGARD, PEMEX

"WE HAVE A VERY
GOOD OPPORTUNITY
NOW TO GET A LOT
OF VALUE FROM [OUR]
ASSETS BY ACCEPTING
PRIVATE SECTOR
PARTICIPATION"
the oil company to increase the issue to 15
billion pesos in June 2014. The sale involved
a global depository note and international
investors bought about 20% of the bond.
Earlier that quarter, the company sold €1
billion and took in books for €6 billion,
prompting the bookrunners to tighten the
spread by 20bp from guidance to launch.
Looking forward, Pemex has a new
variety of financial tools at its disposal
to reduce financing costs by taking coinvestments and creating joint ventures.
"I would say the energy reform gives
Pemex more tools to finance program
activities, investment program activities.
Besides issuing in international and
domestic markets, we will be able also
to associate with different international
companies interested in working in Mexico
along the whole value change," says
Beauregard.
"Something that Pemex has
accumulated through 77 years as a
monopoly are assets," he says. "We have
a very good opportunity now to get a lot
of value from these assets by accepting
private sector participation in these
activities." LF

42 LATINFINANCE.COM - July/August 2015

CORPORATE WITH THE BEST EQUITY
MARKETS STRATEGY

Fibra Uno
The Mexican real estate
investment trust's third
follow-on since its 2011 IPO
has added liquidity to its
stock while luring international investors
Mexico's largest REIT-like entity returned to
equity investors in June 2014 with its third
follow-on in less than five years to raise
capital for real estate purchases. Fibra Uno
dodged volatility in the Latin American
equity markets to raise 32.8 billion pesos
in a deal that built on the issuer's growing
recognition among international investors.
The deal was the largest equity
transaction in Mexico last year, the largest
deal ever by a Fibra, and one of the few
in 2014 to see a robust reception from
somewhat skeptical emerging market
equity investors.
Leads priced the 800.4 million
certificates at 41 pesos each, a 2.52%
discount to the previous day's closing price.
The certificates traded up the day after the
deal, closing at 43.7 pesos.
Fibra Uno's record of deploying capital
to acquire large real estate portfolios and
thus creating a virtuous cycle, has helped
its appeal with investors, says Santiago
Gilfond, managing director and head of
equity capital markets Latin America at
Credit Suisse, a global coordinator on the
deal alongside Santander. BBVA Bancomer
was local coordinator, while Actinver, BTG
Pactual, Evercore, Goldman Sachs, HSBC
and UBS were bookrunners.

SANTIAGO GILFOND, CREDIT SUISSE

"FIBRA UNO IS
PERCEIVED TO HAVE
AN INSIDE EDGE WITH
RESPECT TO ACCESS TO
HIGH QUALITY ASSETS"

"That has been a very material
differentiator relative to a lot of the other
Fibras out there," says Gilfond. "Fibra Uno
is perceived to have an inside edge with
respect to access to high quality assets.
So, here is the classic example of a very
entrepreneurial group leveraging the
capital markets to fund growth and create
value for its shareholders."
The deal was said to be several-times
subscribed, prompting bookrunners
to allocate the hot issue and greenshoe
overallotment options. The real estate
investment trust attracted more than 5,000
investors. Local entities featured heavily
in the order book, with six Afores heard to
place orders.
"You had the domestic investor, you
had the interregional investor, you had
the international emerging market and
Latin America investors, you had the
global REIT funds participating, the
global infrastructure funds, so you had
a very broad group of investors taking
part," Gilfond says. Yet, given the large
size, international investors took center
stage. They bought two-thirds of the deal
and were heard to have made up an even
greater share of the demand.
"Fibras have been developing as
an asset class in Mexico over the past
couple of years but this was the first
time that you saw real broad-based
engagement and participation from US
based, dedicated-REIT investors, who
recognized that Fibra Uno's scale and
liquidity made it an attractive way to play
the Mexican real estate space," says Ian
Taylor, Goldman Sachs head of equity
capital markets for Latin America. "The
dedicated-REIT investment group had
looked at other Fibra deals before and
they had dipped their toe in, but this was
the transaction where I think we really
got traction with them and in which they
really participated in a meaningful way,"
he adds. High expectations on Mexico's
macro-economic potential helped spur
interest in the transaction as did Fibra
Uno's large portfolio of assets, which is
expected to generate increasing demand
as the country's energy and other reforms
advance. Fibra has a diversified portfolio
of tenants, which include global names like
Santander, Bimbo, Unilever and Danone.
The deal was larger than Fibra Uno's
previous two follow-ons, the second of
which was priced in January 2013, to raise
22.05 billion pesos. Then, the certificates
were priced at 36.75 pesos each, a 4.1%
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - July/August 2015
