Mexico’s CFE starts $1 billion capped tender offer for six securities

Chicago, May 19 – Comision Federal de Electricidad (CFE) started a tender offer on Thursday for up to $1 billion total purchase price from six securities, according to a press release.

The utility company is offering to buy from the following notes, listed by acceptance priority level:

• $1.25 billion outstanding 4 7/8% notes due 2024 (Cusips: 200447AD2, P30179AM0) with pricing to be based on the 2.5% U.S. Treasury due April 30, 2024 plus 145 basis points and with a subcap of $500 million on just this series;

• $700 million outstanding 6 1/8% notes due 2045 (Cusips: 200447AE0, P30179AR9) with pricing to be based on the 3.25% U.S. Treasury due May 15, 2042 plus 365 bps;

• $750 million outstanding 5¾% notes due 2042 (Cusips: 200447AC4, P30179AK4) with pricing to be based on the 3.25% U.S. Treasury due May 15, 2042 plus 365 bps;

• $800 million outstanding 4.677% notes due 2051 (Cusips: 200447AJ9, P29595AE8) with pricing to be based on the 2.25% U.S. Treasury due Feb. 15, 2052 plus 380 bps;

• $1 billion outstanding 4¾% notes due 2027 (Cusips: 200447AF7, P29595AB4) with pricing to be based on the 2.75% U.S. Treasury due April 30, 2027 plus 220 bps; and

• $1.2 billion outstanding 3.348% notes due 2031 (Cusips: 200447AH3, P29595AD0) with pricing to be based on the 2.875% U.S. Treasury due May 15, 2032 plus 340 bps.

Tenders may be subject to proration.

Pricing will be based on par of $1,000 notes, and interest will also be paid in addition to the total consideration. Pricing will take place at 11 a.m. ET on June 3.

The total considerations will include a $30 early tender premium that will not be paid to noteholders who tender after the early deadline.

The early tender date is 5 p.m. ET on June 2, also the withdrawal deadline.

The expiration date is 11:59 p.m. ET on June 16.

CFE has agreed to pay additional interest to participants in the offer to cover Mexican withholding taxes on interest payments.

If the company opts for an early settlement date, it would be three business days after the early tender date.

Final settlement is planned for two business days after the final deadline.

The dealer managers are BBVA Securities Inc. (800 422-8692, 212 728-2446), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106), Deutsche Bank Securities Inc. (855 287-1922, 212 250-7527) and Mizuho Securities USA LLC (866 271-7403, 212 205-7736).

Global Bondholder Services Corp. is the tender agent and information agent (855 654-2015, 212 430-3774).

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

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