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A CMBS rarity is plucked from Mexican market

Published 2 Min Read

Mexican originator GICSA has prepaid the Ps542.5 million ($51 million) outstanding of a seven-year deal issued in March of 2004. Backed by lease contracts from three shopping malls, the transaction was initially Ps620 million and priced at 180 basis points over three-month Cete treasurys. Corporativo en Finanzas structured the bond, Santander Investment was the lead manager and Value was co-manager. The deal was likely the only Mexican CMBS transaction outstanding, a source said.

Moody’s Investors Service and Standard & Poor’s had the transaction rated at Aa1.mx’ and mxAA+’, respectively.

The originator bought back the deal with proceeds from a recent loan by GE Capital Bank, according to a banker close to the transaction. The size of the loan was significantly larger than that of the deal and had a longer maturity, the banker said. There was no prepayment penalty and the issuer simply had to inform bondholders at a meeting of its decision, according to the banker. The loan from GE Capital is asset-backed, with leases from the company’s malls providing the flows.

GICSA is one of Mexico’s largest real estate companies, with interests in residential housing, offices, malls, tourist resorts and industrial shipping.

The shopping malls that participated in the bond deal – Las Plazas Outlet Lerma, Punta Langosta and Forum Culiacan – are located in different areas of Mexico. Lerma, which operates in the state of Mexico, features a Zara store and a Palacio de Hierro (“Iron Palace”), which anchors the mall. Punta Langosta sits on the island of Cozumel, and draws consumers to its TGI Fridays and stores like Ultrafemme and Sr. Frogs. Finally, Forum Culiacan, in the state of Sinaloa, mantains both a Burger King and a locale called Sexy Jeans.

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