Raul Pelaez, CEO of Mexico’s Gruma, has resigned, the tortilla maker says. The company says Pelaez, who was promoted from CFO in December, is leaving for personal reasons. Gruma does not name a replacement, saying it is putting together a search committee.
Yearly Archives: 2011
Posted inDaily Brief
La Polar Taps Lazard
Chilean retailer Empresas La Polar has hired Lazard to assist in restructuring the company. Lazard will assist with debt issues, investments and striking legal agreement with existing bondholders. A deal with bondholders is seen as central to the company proceeding with a $220m capital increase needed to straighten finances. In June, La Polar disclosed it overcharged clients for past-due store credit card bills and was setting aside nearly $1bn in loan-loss provisions.
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Perenco Cancels IPO Shelf
Brazil’s Perenco e Gas do Brasil Participacoes officially has revoked its IPO registration after pulling a planned deal in July. The Brazilian unit of UK-based oil exploration company Perenco, which cited market conditions for the decision not to move forward, had planned to sell 0.4m primary shares at BRL1,550-BRL2,000, meaning a deal of perhaps BRL830m ($530m). Perenco, which operates in 16 countries worldwide, had planned to use the funds to develop its 5 blocks in the Espirito Santo Basin and acquire additional blocks. About a third of the raise was slated for acquisitions, including new government auctions. BTG, Itau and Morgan Stanley were leads. The deal was among several Brazilian sales pulled in June and July as equity markets tanked. The new issuance pipeline has been slow to rebuild, with no new launches and only travel company CVC filing for a transaction.
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Popular Colombia Raises $225m
Colombia’s Banco Popular has sold COP400bn ($225m) in 3 series of local bonds, upsizing the transaction to its upper limit. A COP176bn 1.5-year tranche pays the IBR+1.71%, a COP122bn 2013 tranche pays the IBR+1.81%, and a COP156bn IPC-linked 2015 piece pays 3.68%. Total demand topped COP700bn, according to a local broker. A 3-year IBR tranche was discarded. Proceeds will support the bank’s capital base. Popular managed the sale, rated AAA on a national scale.
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Davivienda’s Sights on Foreign Stock, Bond
Colombia’s Banco Davivienda plans to raise up to $350m in subordinated bonds overseas, and also continues to work on plans for a foreign stock listing. The mortgage lender, which has designs on expanding into Peru, Chile, and Central America, would be taking advantage of low rates in what would be a debut international issue. The sale would not come for at least a few months and possibly not until next year, with the process of choosing banks not yet started, says an official at the bank. A 7-year tenor is being considered, with subordinated bonds best fitting the bank’s capital needs, he says. Davivienda also reiterated it plans on an eventual ADR listing. There are no details regarding the timing of this process, though it is also thought to be a 2012 event, and may or may not involve the sale of new shares. The lender had indicated in the past it wished to sell bonds and shares abroad, but plans were put on hold during the 2008 credit crisis. Davivienda raised $228m equivalent in a domestic market IPO last year, and is a frequent issuer in the local bond market. The bank is expected to have a COP300bn-COP500bn bond sale within the next month, after postponing it last week.
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ENA Extends Pricing
Panama’s Empresa Nacional de Autopista (ENA) has extended pricing for its dual-tranche $395m bonds. The corporation wholly owned by the Republic of Panama had set its sights for Wednesday pricing but has opted instead to price and disclose allocations today. The deal comes amid continued uncertainty in the markets as the issuer looks to cover two tranches in the amount of $170m and $225m to refinance $150m of 6.95% amortizing 2025 bonds, a precursor to the sale of the Corredor Sur tollroad for $420m. Tranche A was heard covered by 3x as of late Wednesday while tranche B’s coverage has not been disclosed. ENA launched $170m tranche A at 5.75% with a $225m tranche B at 5.25% Wednesday. ENA’s bonds, rated BBB/BBB minus, were offering investors between high 100s to mid 200s over the Panama sovereign. “The sovereign is trading so tightly. If you look at the Panama 2015s they are being quoted at 2%, so nearly anything with a decent spread over the sovereign is attractive,” says Carl Ross managing director of investments at Oppenheimer & Co. The 144A/RegS deal is being managed by HSBC and Global Bank.
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Fovissste Sets Guidance
Mexican government housing agency Fovissste has set guidance of 4.70% for an up to MXP4.2bn ($345m) equivalent UDI-denominated RMBS, according to a banker on the deal. Pricing, originally set for August 17, is scheduled for today. Proceeds from the 2040 bond will be used to originate mortgages. The issuer last raised MXP3.6bn in June when it sold a UDI-denominated RMBS that generated MXP10bn in demand and priced to yield 4.70% or 339bp over Udibonos. BBVA Bancomer, BAML, IXE, Banorte are bookrunners on this deal. The bonds are rated AAA.
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Itau Chile Places Local Bond
Itau Chile has sold UF1m ($47m) in domestic bonds. The 2031 notes with a 13.8-year average life priced at 103.63 with a 4.0% coupon to yield 3.73%. Itau managed the sale, rated AA/AA minus on a national scale. The sale is the second off a program from which Itau can issue periodically, and follows an identical UF1m sale last week which secured an identical coupon and yield.
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Perfect Time for AMX Issue?
America Movil (AMX) could achieve the region’s lowest-ever coupon on a 10-year if it were to tap the markets now, and bankers have been heard pitching the idea to the Mexican telecom giant as it looks to spend up to MXP76.34bn ($6.51bn) to buy back the rest of the Telmex shares it doesn’t own. However any deal from the blue-chip issuer is unlikely to be imminent, say bankers. Not only is CFO Carlos Garcia Moreno only just coming back from holiday this week, but he is not the type of person to rush into a transaction no matter how low yields are, they say. Furthermore the company is sitting on $7.5bn in cash and it has recently closed a $4bn dual-tranche loan at very attractive spreads. With US telecom AT&T printing this week a $5bn multi-tranche bond offering that included a 2021 with a 3 875% coupon, bankers think AMX could meet with similar success. Indeed, AMX is a stronger credit with an A2/A/A rating against AT&T which carries an A2/A-/A rating, with two negative outlooks. “AMX is not like AT&T, which needs to keep raising debt,” says one DCM official. “But it is not just because AT&T that bankers are pitching AMX. They are looking at where US Treasuries are and it makes sense to come. Not only could they get their lowest coupon, but it would be the lowest coupon out of Mexico or any corporate out of Latin America.” A sub 4% coupon is not beyond the realm of possibility and at that level AMX would beat Coca Cola’s Femsa’s (KOF) record 4.624% coupon set in early 2010. Still the borrower can afford to wait and will also be looking at other factors such as new issue premiums which are likely to be higher now than when it did its dollar deal in early 2010. “Let say they do $2bn, I think they might pay 10bp (new issue premium) or more, and I don’t see them willing to do that,” says another banker. And although it may seem somewhat irrelevant given the coupon size, spreads would also be wider than the 140bp it achieved on its last USD 10-year. Bankers say UST yields
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Telemar Heard Seeking Jumbo Revolver
Bank of America, Citigroup and RBS are heard seeking sub-underwriters on a $1.5bn 5-year revolver for Brazil’s Telemar, with official invitations expected soon, say bankers. The telecom company is following in the footsteps of mining giant Vale and conglomerate Votorantim Participacoes, which this year took advantage of benign conditions in the loan market to lock in tight spreads. Whether Telemar is coming late to the party is debatable, but some banks have been showing resistance to recent levels against what has been an unsteady global backdrop. Still Telemar, like Votorantim and Vale, should be able to hold some sway over relationship lenders and achieve its pricing goals which are expected to be in-line with where Votorantim priced its multi-tranche $2.65bn loan earlier this month. “They are powerful telecom, so they should get a deal done,” said a banker away from the trade. Votorantim’s $1.5bn 5-year senior revolving credit facility was tied to a ratings grid and out of the box offered Libor+85bp if proceeds were used for trade purposes and Libor+90bp for working capital. The utilization fee, or the premium over the base margin, ranges from 0-30bp depending on how much is drawn. Meanwhile, Votorantim raised another $1.15bn with 7 and 8-year export pre-payment facilities, which offered an applicable margin of Libor+135bp and +150bp, respectively. The utilization fee was 0bp if up to 33% is drawn, 15bp if 33%-67% is drawn and 30bp for over 67%.