Mexico in Brief
From Mexico in Brief Newsletter
PEMEX BUYS-OUT U.S. REFINERY.
The Mexican state-owned petroleum company, Petroleos Mexicanos or PEMEX, paid approximately U.S.$600 million to acquire control of Shell’s Deer Park refinery in Houston, Texas. This refinery, with the capacity to process approximately 340,000 barrels per day, will be added to the other six refineries located in Mexico, plus another one under construction in the Southern Mexican state of Tabasco.
NEMAK ISSUES SUSTAINTABILITY BONDS.
Nemak, the global automotive parts manufacturing company, announced that one of its subsidiaries successfully placed its first global bond linked to sustainability, raising pproximately U.S.$500 million. The company explained that the offer consisted of an issuance of senior notes with a maturity of 10 years and a coupon of 3.625 percent. Nemak also stated that the proceeds of the placement will be used to refinance the debt. As part of its general efforts towards sustainability, the company simultaneously published a framework of bonds linked to sustainability that emphasized the importance of reducing greenhouse gas emissions.
THE UNICORN IN SMALL AND MEDIUM SIZED COMPANIES.
Clip, a new digital payment and commerce platform emerging between the small and medium-sized companies in Latin America, received an equity investment of approximately U.S.$250 million from SoftBank Group and Viking Global Investors. With this investment, the arising fintech company achieved a valuation of approximately U.S.$2 billion. As Clip’s market grows rapidly, the company plans on hiring 320 people in the next 18 months.
CEMEX ISSUES BILLIONS IN NOTES.
The Mexican building materials company, Cemex, issued approximately U.S.$1 billion in subordinated notes at a rate of 5.125% with no fixed maturity date. The multinational company intends to allocate the resources of the transaction to general corporate purposes, achieving a structured investment capital level, and the payment of debt.
A “COVID SOCIAL BOND”.
The Mexican branch of multinational financial services company, BBVA, placed its first “covid social bond” in the Mexican market. In addition to being the largest social issue in the Mexican market, raising approximately U.S.$250 million, the bond has a variable rate at three years and an equilibrium interbank interest rate (TIIE for its acronym in Spanish) at 28 days minus 30 basis points. The “covid social bond” proceeds will be directed to finance projects that seek to promote economic reconstruction.
FOREIGN INVESTMENT GROWING IN NORTHERN OF MEXICO.
Investment Monterrey, an agency in charge of promoting the Mexican state of Nuevo Leon abroad, seeks to attract an investment of approximately U.S.$2 billion using “nearshoring”, a business strategy that allows companies to bring production centers closer to their consumer markets. From said foreign investment, about 50 projects, mainly from China and the United States, would be generating around 10,000 job positions in the entity. The project includes an expansion and diversification of companies and sectors that already operate in the mentioned state, such as electronics, electrical appliances, automotive and auto parts.
AN EXPANSION IN HOTEL’S BRANDS.
The Tafer Hotels and Resort Group, a Mexican luxury hotel chain company, plans to invest approximately U.S.$640 million to expand its brands. This amount will be used to finance the development of about 2,900 new hotel rooms located in the Mexican states of Jalisco, Quintana Roo and Baja California Sur. To achieve their goal of 8,000 hotels rooms by 2026, the company seeks alliances with independent hoteliers that can operate and manage their properties under one of their brands.
KAVAK’S BILLIONAIRE INVESTMENT.
The Mexican startup for the online buying and selling of pre-owned cars, Kavak, announced an investment of approximately U.S.$400 billion to boost the Mexican economy during the second semester of 2021. With this new investment, Kavak will carry out an initial generation of 500 jobs, and an increase in vehicle reconditioning capacity of 40 thousand cars in the second half of the year. This investment will reinforce the economic movement of the automotive sector in Mexico, increasing the rotation of the vehicle fleet, strengthening the demand for inputs, infrastructure, raw materials, and human working capital.
CONTINUED FOREIGN INVESTMENT IN MEXICO.
According to a UN report, Mexico was consolidated as one of the ten top countries in the world, and the first in Latin America, to receive direct foreign investment. The UNCTAD (the United Nations Conference on Trade and Development) stated that Mexico attracted approximately U.S.$29,100 million in 2020, climbing up five spaces and positioning itself in the ninth place globally. Although the pandemic hit the country aggressively, Mexico managed to be above countries like Brazil, Canada and Sweden.