Overview of CFE’s Financial Plan
The Mexican state-owned power company, Comisión Federal de Electricidad (CFE), intends to tap into international financial markets to raise up to $1.5 billion through the issuance of two bonds, according to Moody’s Investors Service.
Bond Details
- CFE plans to secure $1.0 billion from the issuance of non-amortizing notes due in 2034.
- An additional $500 million will be raised via amortizing notes due in 2051.
Purpose of Funds
The funds will be used to refinance CFE’s bonds with a 4.750% interest rate maturing in 2027, as well as a public offering for acquisition that includes CFE bonds at 4.688% maturing in 2029, 6.125% maturing in 2045, and 6.264% maturing in 2052.
Furthermore, CFE intends to allocate resources from this issuance towards financing infrastructure projects under the Productive Infrastructure Investment Project scheme with Deferred Public Expenditure Registration (Pidiregas).
Credit Ratings
The bond issuance has received ‘BBB-‘ from Fitch Ratings, ‘BBB’ from S&P Global Ratings, and ‘Baa2’ from Moody’s, all falling within the global investment-grade assets category.
Financial Coordinators and Agents
BBVA, Bank of America, HSBC, and JPMorgan will act as coordinators for the issuance. Meanwhile, Morgan Stanley, Santander, and Scotiabank will serve as placement agents.
Key Questions and Answers
- What is CFE’s plan? CFE aims to raise up to $1.5 billion by issuing two bonds in international markets.
- What are the bond details? CFE plans to secure $1.0 billion from non-amortizing notes due in 2034 and an additional $500 million from amortizing notes due in 2051.
- How will the funds be used? The funds will refinance existing CFE bonds and finance infrastructure projects.
- What credit ratings did CFE receive? CFE received ‘BBB-‘ from Fitch Ratings, ‘BBB’ from S&P Global Ratings, and ‘Baa2’ from Moody’s, all within the global investment-grade assets category.
- Who are the coordinators and agents for this issuance? BBVA, Bank of America, HSBC, and JPMorgan are the coordinators, while Morgan Stanley, Santander, and Scotiabank are the placement agents.
