Peruvian development bank Cofide has launched a $150m loan to general syndication. The deal is a 3-year amortizing step-up with an average life of 2.5 years. It pays Libor plus 150.0bp in year one, 162.5bp in year two and 175.0bp in year three, with commitment fees of 25bp-35bp depending on ticket size. Average tickets are heard at $10m. Barclays and Standard Chartered have joint books. Cofide has a number of social programs it is seeking to fund. It is 90% owned by the Peruvian government, rated BBB minus by Fitch and BB+ by the other two agencies. CAF has a 2% stake.
Yearly Archives: 2008
Posted inDaily Brief
Kexim Retaps Peso Bonds
The Export-Import bank of Korea (Kexim) has retapped for MXP1.1bn its 8.61% of 2017 Mexican peso-denominated bonds. An MXP800m tranche priced at 99.23 to yield 8.73%. It follows a MXP300m tranche that priced last week at 98.16 to yield 8.90%. The transaction was rated A+ by Fitch. Merrill Lynch managed the sale, a retap of an MXP1bn offer done in October. Kexim also placed in January MXP1.2bn in 2013 floaters at TIIE plus 30bp.
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Abnote Brings Debentures
Brazil’s American BankNote has launched a BRL180m 2013 debenture issue. The Aa3.br rated notes pay interest at the DI rate plus 1.5%. The provider of services related to credit cards, identification systems and printing will use proceeds to finance a part of the January acquisition of Interprint. Bradesco and Unibanco are managing the sale.
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Jirau Hydro Bidding Postponed
Brazilian electricity regulator Aneel has postponed an auction for the rights to build the Jirau hydroelectric project until May 19, it said. The bidding for the 3.3GW hydroelectric dam on the Rio Madeira had been scheduled for May 12, but Aneel wanted to give bidders more time to prepare. The government has estimated construction costs for Jirau to be BRL8.7bn, and development bank BNDES has said it could contribute up to 75% of the financing.
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Dispute over Ecuadorean Bottler Heats up
A deal to sell a 34.5% stake in Ecuador Bottling Company (EBC) to Chile’s Polar, also a Coca-Cola bottler, has been roadblocked by EBC’s majority shareholders, the Correa Group. The seller, an Ecuadorean investor called the Novis group, agreed to vend its stake to Polar in March for $64m. But Correa Group, which has the right of first refusal, is now trying to block the sale after having declined to acquire the stake. Correa Group’s strategy appears to be to prevent a transaction that would introduce a much more active investor into EBC, says a person familiar with the negotiations. Correa Group appears to be seeking out legal justifications that might help it block the sale, says the executive, who speculates EBC and Novis are also considering resorting to legal action against Correa Group to get the deal done. Analytica is advising the seller.
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Fitch Cuts Durango to B Minus
Fitch has chopped Mexico’s Corporacion Durango to B minus from B and its 2017 notes B/RR3 from B+/RR3, implying a 51%-70% recovery in the event of default. The ratings remain on rating watch negative and Fitch notes a deterioration in business and financial profile during the 12 months to March 31. “Durango is facing financial pressure due to rising input costs for old corrugated containers (OCC), a key raw material; OCC prices have escalated during the past 12 months due to the aggressive purchases of OCC in the US by the Chinese,” says Fitch. Durango has also been hurt by rising energy costs, it adds. “The increase in these two costs, plus other factors, have led to a rise in the company’s per-ton unit cost to $583 for the quarter ended March 31, 2008 from $506 during the same quarter in 2007. Price increases have not offset these costs increases,” says Fitch. The firm has $14m in short-term debt and $524m in long-term obligations.
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Spanish Banks Face Negative Outlook: Moody’s
Spanish banks – major lenders to LatAm entities as well as underwriters of local currency bonds – are vulnerable to a slowdown at home, according to a study by Moody’s. A more pronounced weakening in local real estate, a challenging funding market and increasing burden on already highly indebted domestic households are among bearish negatives. “Although no Spanish bank has been directly exposed to the US subprime sector or to substantial write-downs related to complex structured products, the risk re-pricing process initiated around mid-2007 triggered a more pronounced turn in the credit cycle for Spain’s banking system and provides an overall negative credit environment,” the agency says. Moody’s says that during 2008 further increases in delinquencies are likely in view of a weakening labor market and anticipated house price correction. “Nevertheless, underpinned by solid core retail franchises and a high risk absorption capacity, the Spanish banking system as a whole should prove resilient to this weakened credit environment,” the agency adds.
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Fitch Ups Chile’s Embotelladora Andina
Fitch has upgraded Chile’s Embotelladora Andina to A stable from A minus, including the Yankee bonds due 2027. The agency notes a “continued strong business position and financial profile.” Growth in cash flow was driven by a favorable economic climate in the region and strong execution by the company at the point-of-sale, the agency adds. “During 2007, Andina’s soft drink sales volumes grew by 5.4%, while its total beverage sales volumes grew by 6.3%,” Fitch says. The largest threat to the company’s cash flow is an economic crisis in Argentina, the agency says. Andina is one of the largest bottlers of Coca-Cola products in LatAm.
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Telemar, Brasil Telecom on Negative Watch: Fitch
Fitch has placed on negative watch the BBB minus rating of Brazil’s Tele Norte Leste Participacoes (TNE) and Telemar Norte Leste (TMAR), following the announcement made by Telemar to acquire a controlling stake in Brasil Telecom Participacoes (BRP). The local currency rating IDR of BBB ratings on BRP and its subsidiary Brasil Telecom SA (BTM) were placed on negative watch, as well as the local scale rating of AA+(bra). Also on negative watch are a BRL1.08bn debenture and BTM $200m million PRI notes due 2014, rated BBB. The rating watch reflects a potential increase in leverage if the acquisition of BRP is successful, the agency says. It will be resolved once the final details of the transaction are known and the ultimate long term capital structure is determined.
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Fresnillo IPO Hits the Road
An up to $2.2bn London IPO for Mexican precious metals miner Fresnillo is moving ahead and set to price May 8. The roadshow for the deal, an asset and management carve-out from Penoles, includes several stops, though none in LatAm. The company was heard in London yesterday, with plans to head to Scotland, Continental Europe, the US, Canada and the Middle East over the coming 10 days. Fresnillo seeks to sell a total of 160m shares at a range of 555p-700p via JPMorgan Cazenove, which has sole books. The company is looking to sell $900m worth of primary shares, with the remainder in secondary stock, say bankers on the deal. Canacord Adams, Citi and UBS are co-managers. Settlement is scheduled for May 14. Penoles intends to retain at least 75% of the ordinary shares of Fresnillo plc on completion of the offer. A listing without float will also be obtained on the Mexican Stock Exchange for Fresnillo.