Nacional Financiera, the government-owned Mexican industrial development bank, has picked Bankers Trust Co. to lead a $100 million Eurobond issue.
This deal will boost to $725 million the total that Bankers Trust has lead managed or comanaged during the past 18 months in bond and equity issues for Mexican companies.
The Luxembourg-listed bonds feature an equity kicker: warrants convertible after two years into cash, based on the appreciation of a stock index of Mexican companies.
In exchange, investors forgo about 350 basis points of interest payments - the difference between 6% rate on the Nacional Financiera Eurobonds and the 9.5% going rate for straight debt of comparably rated Mexican securities.
Holders can convert the warrants into the U.S. dollar equivalent of the difference between the Mexican stock exchange index as of Dec. 4, 1991, and the index at the date converted, adjusted for changes in exchange rates.
Commissions total 2.25% of principal, including 1.25% for Bankers Trust, which structured the deal.
Senior managers are Merrill Lynch International, Bear Stearns International and Nacional Financiera. Comanagers are Banco Espanol de Credito, Chase Manhattan Corp. J.P. Morgan & Co., and Inverworld.
The Nacional Financiera bond issue extends the grasp of U.S. banks in Latin America, especially with respect to bringing new issues to international capital markets.
Earlier this year, Nacional Financiera picked J.P. Morgan to lead manage a $125 million, five-year bond, and in October, it picked Chase to lead manage a $150 million, 10-year bond.
Nacional Financiera's Plans
Arturo Ortiz Hildago, deputy director-finance, said Nacional Financiera had decided to offer a convertible bond because the company is the single largest participant on the Mexican stock exchange, accounting for about 7% of some $80 billion worth of shares.
The $16 billion-asset development bank plans to issue at least $500 million worth of bonds next year.
Mr. Ortiz added that Nacional Financiera is studying using a wider range of maturities and different currencies for its issues next year in order to obtain the best available borrowing rates.