Mexico’s CFE begins capped tender offer for four series of notes

By Marisa Wong

Los Angeles, Aug. 29 – Comision Federal de Electricidad (CFE) announced it has begun a tender offer to purchase for cash notes from four series for an aggregate purchase price, excluding interest, of up to $1 billion, according to a news release.

CFE is offering to purchase notes from the following series, listed in order of acceptance priority level:

• $869,688,000 outstanding 4 7/8% notes due 2024 (Cusip: 200447AD2, P30179AM0), with pricing to be based on the 1/8% U.S. Treasury due Jan. 15, 2024 and a fixed spread of 0 basis points;

• $814,968,000 outstanding 4¾% notes due 2027 (Cusip: 200447AF7, P29595AB4), with pricing to be based on the 4 1/8% U.S. Treasury due July 31, 2028 and a fixed spread of 120 bps;

• $618,308,000 outstanding 6 1/8% notes due 2045 (Cusip: 200447AE0, P30179AR9), with pricing to be based on the 4 3/8% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 280 bps; and

• $563.71 million outstanding 5¾% notes due 2042 (Cusip: 200447AC4, P30179AK4), with pricing to be based on the 4 3/8% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 265 bps.

Holders who tender their notes at or before the early tender date will be eligible to receive the early tender consideration, which includes an early tender premium of $50 per $1,000 principal amount. Holders tendering after the early tender date will only be eligible to receive the late tender consideration, which is equal to the early tender consideration less the early tender premium.

The company will also pay accrued interest.

Tendered notes will be accepted in order of acceptance priority level, subject to the offer cap and to proration. Early tendered notes have priority in acceptance over any notes tendered after the early deadline, regardless of acceptance priority level.

The offer is not conditioned on any minimum amount being tendered.

The early tender date is 5 p.m. ET on Sept. 11. Tenders may be withdrawn prior to that time.

Pricing will be set at 10 a.m. ET on Sept. 12.

The company may choose to accept early tendered notes for purchase prior to the expiration of the offer. The early settlement date is expected to be on or around the third business day following the early tender date.

The offer expires at 5 p.m. ET on Sept. 26.

Final settlement is expected to be on or prior to the second business day following the expiration date.

BNP Paribas Securities Corp. (dl.us.liability.management@us.bnpparibas.com; 888 210-4358, 212 841-3059), Citigroup Global Markets Inc. (ny.liabilitymanagement@citi.com; 800 558-3745, 212 723-6106), Morgan Stanley & Co. LLC (800 624-1808; 212 761-1057) and SMBC Nikko Securities America, Inc. (liabilitymanagement@smbcnikko-si.com; 888 284-9760, 212 224-5163) are dealer managers for the offer.

The tender agent is Global Bondholder Services Corp. (855 654-2015 or 212 430-3774).

The state-owned electric utility is based in Mexico City.

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