EM LATAM CREDIT: New Issues: Mexico's Orbia (ORBIA; Baa3neg /BBB-neg /BBB)
"NEW DEAL: ORBIA ADVANCE $BENCHMARK 5Y/10Y +330/370 AREAS" - BBG
IPT 5Y: T + 330bps Area
FV 5Y: T + 300bps Area
IPT 10Y: T + 370 bps Area
FV: 10Y: T + 335bps Area
• Mexico diversified manufacturer Orbia proposed investor meetings that will likely be followed by the issuance of USD benchmark size senior unsecured 5 and/or 10-year notes. Proceeds will be used to fund the already announced tender offer of any and all 2026 notes with USD600mn outstanding and possibly 2027 notes with USD500mn outstanding, as well as for general corporate purposes.
• ORBIA has 2031 notes last quoted T+275 bps. To gauge the value of the curve, we look to Mexican chemical company Alpek (ALPEKA; Baa3 /BBB- /BBB-) and see 1 year being worth about 15 bps yield which would put an Orbia 5-year at T+260.
• We added a generous new issue concession, especially considering the negative outlooks from both Moody’s and S&P and the recently released disappointing earnings report, MNI post:
https://mni.marketnews.com/3SaqX4t
• To imagine where trading levels might go post downgrade consider Mexico auto parts company Nemak (TNEMAK; Ba2 /BB+neg /BBB-neg) with 2031s last quoted 8.23%, 168 bps wide to Orbia.
• Extending to a 10-year we estimate 75bps yield pickup, equating to 35 bps of credit curve, when looking at other corporate credit curves in the region to arrive at T+335 bps fair value for a new Orbia 10-year.
• Moody’s placed Orbia ratings on a negative outlook last year with concerns about a delayed deleveraging process while S&P also had concerns about leverage and the latest earnings results do not allay those concerns with free cash flow negative, debt rising and business challenges persisting.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US: MNI POLITICAL RISK - Markets Brace For 'Liberation Day' Tariffs
Download Full Report Here
- President Donald Trump has two Executive Order signing ceremonies on his agenda today. Journalists will be invited in for the second session, at 17:30 ET 22:30 BST.
- Multiple reports suggest that Trump may be pressing his team to devise an aggressive 'Liberation Day' tariff plan that applies to more countries than anticipated.
- Trump’s trade advisor, Peter Navarro, said tariffs could net the Treasury Department $600 billion a year for a decade.
- The Senate is expected to vote on Tuesday on a Democratic resolution to undo Trump’s tariffs on Canadian goods.
- The Trump administration's economic agenda will be buoyed by a drop in the price of eggs.
- Senate Republicans are expected to begin procedural votes on a compromise budget resolution as soon as Wednesday.
- Trump is reportedly considering letting income taxes on the “very highest earners” rise in return for cutting taxes on tips.
- Florida will go to the ballot box tomorrow to vote in special elections to fill two vacant House seats. Voters in Wisconsin will vote in a bellwether state Supreme Court race.
- Trump is considering applying secondary tariffs on countries that buy Russian oil if he determines Russian President Vladimir Putin is attaching unreasonable demands to ceasefire negotiations.
- Iran has rejected direct negotiations with the US over its nuclear programme.
- Poll of the Day: Most US voters still see the US-Canada relationship as friendly.
Full Article: US DAILY BRIEF
GLOBAL POLITICAL RISK: Week Ahead 31 March-6 April
Download Full Report Here
MNI's Political Risk team has published its Week Ahead article, looking at some of the major political events scheduled to take place over the next seven days. Includes information on US President Donald Trump's imposition of reciprocal tariffs on 'Liberation Day', French far-right politician Marine Le Pen's conviction and ban from running for public office that has upended the 2027 presidential election race, and a meeting between Russia and China's foreign ministers in Moscow.
Full article attached below:
PIPELINE: Corporate Bond Roundup: DBJ 5Y SOFR on Tap
- Date $MM Issuer (Priced *, Launch #)
- 03/31 $Benchmark DBJ 5Y SOFR+62a
- 03/31 $Benchmark Japan Tobacco +3Y, +5Y, +10Y investor calls
- 03/31 $Benchmark Gold Fields 10Y investor calls
- 03/31 $Benchmark Caf perpNC5.5 investor calls
- Expected Tuesday:
- 04/01 $Benchmark NRW Bank 5Y SOFR+49a
