April 8 (Bloomberg) - Coca - Cola Femsa SAB, most major bottler of soft drinks for Latin America, plans to sell bonds peso for the first time in two years before the Central Bank begins to increase to a record low interest rates.
The bottler, known as KOF, next week will sell $ 5 billion pesos, fixed by 2021 notes-rate and variable rate due 2016 said Roland Karig, a spokesman for Mexico City. Fixed rate notes can give 105 basis points more than the debt of the Government, or 8.55%, according to the obligations of Scotia Capital Inc. similar-maturity of America Movil SAB, which shares the credit of the KOF rating - of Standard & Poorto cede 8.48%.The more rapid growth in a decade in Latin America the second largest economy is prompting traders to bet that the Central Bank will boost interest rates for reference of 4.5 per cent from the month of August. The Mexico is the only large country in the region which has not increased borrowing costs in the past year. Brazil raised rates five times and Chile nine times as pink price and materials first inflation reaches highest in over two years. "This is a good time to go to the market,"Karig said in a telephone interview. "In view of the Outlook, many banks are suggesting that in the coming months they can increase rates."Inflation OutlookWhile Mexican inflation has fallen to a minimum of four years of 3.04% in March, the pace of economic growth fueling concern that price increases will seek later this year, according to Sergio Luna, the Chief Economist unit Banamex of Citigroup Inc. in Mexico City. The economy can expand as much as 5 percent this year after growth of 5.5% in 2010, the most in a decade, the Finance Minister Ernesto Cordero said last month. "" Everybody tries to take advantage of low rates, "said Alonso Madero, that allows to manage approximately 5.5 billion of the debt to the SAB of Actinver Corp. in Mexico City. "We will definitely participate" in the sale of the debt of the KOF, he said.The Central Bank will be increasing rates 75 basis, or by 0.75 percentage point, the end points, under negotiation in TIIE or interbank rate futures contracts. A basis point is the percentage point 0, 01.Les companies may still have time to sell the debt before the head of rates, a survey showed. The Central Bank resume increases in January, according to the estimate of the median Economist in a survey on 4 April by Banamex.Rates pending "rate this year will move," said Ricardo Aguilar, an economist at Invex Casa de Bolsa SA in Mexico City. "Inflation will begin to accelerate, but within the expectations of the Banco de Mexico.".Karig, said the company will use proceeds from the sale of bond to pay the debt maturing in 2012 and reserves bolster cash. Coca - Cola Femsa has become largest franchise of the world to Atlanta--Coca-Cola Co. beverages a namesake in service in October. "Mexico City - based benefit of the KOF rose 6.9% to 3.02 billion pesos in the fourth quarter".It is on taking advantage of the market with respect to the rates and propagation, "Eduardo Uribe, an analyst with Standard & Poor in Mexico City, said in a telephone interview.Extra yield investors demand to possess links dollar instead of Treasury bills fell to 3 basis points to 127 to 9 h 27 New York time, according to JPMorgan Chase & Co .credit - default SwapsThe cost to protect the Mexican against non-payment for five years debt reaches a point of basic 101, according to CMA in New York prices. Brazilian credit default swaps remained unchanged at 107 basis points and U.S. credit - default swaps yesterday rose to basis 36.8 41.1 points. Credit-default swaps pay the buyer face value in exchange of underlying securities or the equivalent of cash if the issuer fails to comply with the agreements of the debt.The peso has gained 0.3 percent to 11.74037 per dollar. The currency is 5.1 per cent this year.Coca-Cola Femsa shares sliding 0.6 per cent pesos 94.95 yesterday. Its parent company, Fomento Economico Mexicano SAB, whose holdings include the Oxxo convenience store chain and Dos Equis beer, dropped by 0.4% to 71.16 pesos.Mexican companies sold 62.8 billion pesos in local bonds in the first quarter, faster startup on record. "" There is a sense that it is the word of interest rates, "said Luna, the Economist. "From the point of view of the corporate market, it is a good time to sell the debt".-With the support of Andres r. Martinez in Mexico City and Thomas Black in Monterrey. Editors: Brendan Walsh, David Papadopoulos, Brenda Batten
To contact the reporters on this story: Jonathan j. Levin in Mexico at jlevin20@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos to papadopoulos@bloomberg.net
