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Latin America - Best structured borrower

Coca-Cola Femsa

It's one thing when an ambitious company like Coca-Cola Femsa, a Coke bottling operation in Mexico, buys a larger rival like Panamerican Beverages (Panamco), in the largest and most spectacular Latin M&A transaction of 2002. It's quite another thing paying for it. When Femsa announced the acquisition, it had a $1.55 billion bridge loan from JPMorgan and Morgan Stanley that it needed to replace quickly, as well as a $500 million term loan that it also wanted to refinance.

Continuing to think big, Femsa decided that it wasn't going to be satisfied with loans alone: it wanted a combination of both peso and dollar loans (one loan, in fact, had both currencies) as well as its very first venture into the domestic Mexican capital markets.

And with its debut issue of Ps4.25 billion ($408 million) of certificados bursatiles, Femsa immediately took the record for the largest ever one-day fund-raising exercise for a corporate in the Mexican market.

The bonds, which were issued at the end of April, came in three tranches: a Ps2 billion four-year floater paying 55 basis points over 28-day government paper; a Ps1.25 billion five-year floating-rate note paying 120bp over the six-month government rate; and a Ps1 billion seven-year bond issued at 100bp over the benchmark Mexican bond of the same maturity.

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