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SPCC is expected to come to market

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Southern Peru Copper Corporation (SPCC) is looking to mandate a $500 million securitization of export receivables, sources say.

The Grupo Mexico subsidiary is looking to fund a $1 billion modernization program and will attempt to issue the bond in the second half of the year. While no bank has gotten the official nod, rumor is that Banc of America and Citibank/Salomon Smith Barney are frontrunners for the mandate.

Monoline insurer MBIA is also in talks with the borrower to provide a wrap for the deal.

In May 1997 SPCC sold a $150 million 10-year future-flow deal through Credit Suisse First Boston. That deal garnered impressively tight pricing of 135 basis points over Treasurys, largely as a result of its pricing just ahead of the Asia Crisis.

The issuer will be hard-pressed to score similar rates for the new financing, which may explain the decision to call for a wrap. If MBIA wraps the structure it will snag a triple-A rating from the agencies.

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