As new market activity slowed considerably, a white goods export receivables transaction from Mexico's Mabe S.A de C.V. was one of the biggest things on investors' minds. Thirty-nine institutional investors placed bids to participate in the offering lead managed by ABN Amro.
Although the deal was increased in size to $250 million, a full $100 million up from its original offer of $150 million, some buyers were cut back, leaving 19 investors to take part in the final offer. According to a source close to the deal, the company received over $320 million worth of bids.
The deal, which was rated Baa2/BBB-minus by Moody's Investors Service and Standard & Poor's Ratings Service, priced at a spread of 310 basis points over Treasurys. The coupon was set at a rate of 8.942%.
A number of investors were impressed by General Electric's involvement in the deal GE owns 48% of Mabe but ultimately, the deal had spread incentives to compensate for the fact that the GE's participation was not an explicit guarantee.
"GE really is not guaranteeing the deal," said one buyside source. "There are some outs in the contract and who's to say that GE will stay in that business. That's why the spread is where it is."
