América Móvil in Ps.15 Billion (U.S.$1.2 Billion) Shelf Take Down
December 5, 2012
Cleary Gottlieb represented América Móvil in its SEC-registered offering of Ps.15 billion (U.S.$1.2 billion) principal amount of 6.45% Senior Notes due 2022 denominated and payable in Mexican pesos.
The offering was the largest local-currency debt offering in international markets by a Latin American corporate issuer. The notes were concurrently offered in Mexico and registered with the Comisión Nacional Bancaria y de Valores (the “CNBV”). The notes are listed on the Mexican Stock Exchange and Luxembourg’s Euro MTF Market. The deal closed on December 5th.
The offering is the first step in América Móvil’s plan to increase its funding in Mexican pesos, rather than funding in U.S. dollars and other foreign currencies and swapping into pesos, as in the past. América Móvil expects to reopen the notes on a quarterly basis and create a new 10-year benchmark note every two years, for a total new peso indebtedness of up to Ps.100 billion over the next five years.
The structure of the offer was unique in its asset class. The bonds are payable in pesos only, like domestic market securities, in contrast to previous “Euro-peso” bonds that are payable in dollars. They were registered and listed in Mexico and sold using a Mexican shelf offering process, the first time this has been done for an international bond issued under a U.S. indenture and governed by New York law. The concurrent registration with the SEC and the CNBV allowed the offering to be placed with Mexican institutions that could not participate in previous international offerings by Mexican issuers. They also clear on a fungible basis in the Mexican clearing system Indeval as well as the European clearing systems Euro-clear and Clearstream.
This structure was designed to permit the development of a true cross-border market for both the primary distribution and the secondary trading of the bonds. In this respect, the América Móvil structure has similar objectives to the Global Depositary Note structure pioneered earlier this year by Petróleos Mexicanos (Pemex), also advised by Cleary Gottlieb. The structural innovations and the large projected size of the program are intended to address the limitations on secondary market liquidity that have hampered the development of local-currency bond markets throughout the emerging markets.
América Móvil is the leading provider of telecommunication services in Latin America. As of September 30, 2012, América Móvil had 318.7 million accesses, of which 255.9 million were wireless subscribers and 62.8 million were fixed revenue generation units.
Cleary Gottlieb has advised América Móvil since 2000 on a wide variety of matters, including a substantial number of acquisitions and securities offerings.