BEST BANK
Citigroup
BEST DEBT HOUSE
Citigroup
BEST EQUITY HOUSE
BBVA
BEST M&A HOUSE
Goldman Sachs
One number says it all: $1.7 billion, the net earnings from Citigroup in Mexico. Citigroup, and its Mexican subsidiary Banamex, is not the biggest bank in the country: that honour goes to BBVA’s Bancomer (although Banamex is rapidly catching up). But it is easily the most profitable: Bancomer’s earnings were just 65% of Citigroup’s, at $1.1 billion, and Santander Serfín’s came in a distant third.
Citigroup handily wins the award for best debt house in Mexico, too, with a long series of enormous local bond issues from such borrowers as Pemex, GMAC Financiera and the Inter-American Development Bank – all of which won borrower’s awards last month. Citi easily tops the bond league table, with 15 issues to second-placed CSFB’s seven, and has total deal volume 44% greater than its Swiss rival. And in syndicated loans, Citi is untouchable, with its $3.7 billion in deals trouncing BBVA’s $2.3 billion. Citi’s $5.8 billion loan to Cemex alone would give it good standing to win the award: the acquisition-finance deal came larger and tighter than anybody expected.
BBVA, despite missing out on both the best bank and best loan house awards, does get the award for best equity house. The bank’s flagship deal was for homebuilder Urbi – a May 2004 IPO that has not only subsequently almost doubled in price but has also taken its place in a number of important emerging-market indices, including the MSCI. The innovation was that although the deal was sold internationally, only Mexican shares were issued – US investors didn’t buy American depositary receipts, but Mexican shares directly. More than 2,300 Mexican investors took part, helping to set up the market for BBVA’s subsequent deals: for Asur, which got more than 2,800 investors, and for steel company ICH, which got a stunning 4,678 Mexican investors and barely had any international distribution at all.
In M&A, the deal of the year was undoubtedly the $5.8 billion acquisition of UK cement company RMC by Cemex. Goldman Sachs had the Mexican side of that deal, and although JPMorgan did advise RMC, it was mostly through its joint venture with Cazenove, which has little to do with JPMorgan’s Latin America franchise.
Goldman also played a central role in the $4.8 billion sale of Minera Mexico to Southern Peru Copper. Although both companies were subsidiaries of Grupo México, the deal was long and arduous – a bit like Interbrew’s sale of its 30% stake in Femsa back to Femsa.
JPMorgan has a magnificent deal of its own this year – the sale of Mexican railway Grupo TMM to Kansas City Southern, a transaction that took some three years of work to put together. But this year the award for best M&A house in Mexico goes to Goldman Sachs.
