Some banks are giving OSX’s $850m 12-year loan a wide berth even after a recent upward flex. This comes as European banks feel the sting of the euro-zone debt crisis not only through higher funding costs, but also in terms of risk aversion. The oil service company, controlled by Brazilian magnate Eike Batista, has yet to develop a track record and hence is seen as less attractive than other such Brazilian companies, say bankers. “It is really an issue of the borrower. We don’t have a relationship with them,” said one banker at a European financial institution. But other non-European institutions are taking a similar view. “The group has been successful in raising money, which is an accomplishment. (But) we would like to see more of track record,” said a banker at an Asian institution. Just recently margins were flexed to Libor+425bp from 375bp for the pre-construction period, and to 400bp from 360bp for post-construction, according to a banker looking at the trade. ING and Santander are lead arrangers.
Yearly Archives: 2011
Sonda Launches Takeover of Rival
Chilean IT firm Sonda has launched a public takeover offer for the shares of rival Quintec. The purchase would reach CLP32trn ($69m) if Sonda gets 100% acceptance, at the CLP206 price it is offering. A group of Quintec shareholders representing a 37.3% position has already agreed to sell, Sonda says. Sonda is in the middle of an aggressive $500m expansion plan, and adding Quintec would increase its domestic presence as well as in Argentina, Brazil, Colombia and Peru. The CLP206 offer price represents a 47% premium to Tuesday’s CLP140 close, though Quintec shares are extremely illiquid. Quintec closed Wednesday at CLP199.
AMX Moves Consolidation Forward
Telemex’s board has approved America Movil’s previously announced plans to launch a public offer for the 40.04% of Telmex it doesn’t own. AMX will spend up to MXP76.34bn ($6.51bn) in the offer, the last step in an effort to bring all of the Mexican billionaire Carlos Slim’s telecom operations under one roof. AMX is offering MXP10.50 per share for the approximately 7.2m shares, representing what it says is an 11.1% premium over the average share price of the 30 days prior to announcement, or a 0.7% premium to Monday’s MXP10.43 close. If successful, AMX would own all of the Telmex shares and de-list its former parent. Last year, America Movil acquired Telmex Internacional and Telmex holding company Carso Global Telecom, giving it about 60% of Telmex, in an operation involving stock and cash worth about $23bn.
BBVA Hires LatAm Debt Veterans
LatAm debt veterans Gabriel Bochi and Carlyle Peake have both recently joined BBVA as the Spanish bank looks to expand its DCM platform in the region. Bochi comes from JP Morgan where he was managing director and head of LatAm DCM, while Peake was previously COO at Stamford-based asset management firm Aladdin Capital. Earlier Peake was head of EM syndicate at Merrill Lynch and Dresdner. BBVA has historically failed to make a dent in LatAm DCM universe, but it could potentially leverage its strong lending relationships across the region, particularly in Mexico.
Caterpillar Argentina Plans Local Bond
Caterpillar Financial Services Argentina plans to sell up to ARP160m ($39m) in domestic bonds. The issue is to be divided into an ARP40m fixed-rate instrument and an ARP120m floater. The sale period is scheduled to launch today and close Tuesday. Citi is managing the sale, rated AA on a national scale.
Cemex Concedes Ground on Pricing
Mexican cement company Cemex conceded some ground to domestic investors Tuesday after pricing a MXP2.5bn ($202m) ABS due 2015 at benchmark rate TIIE+200bp, or 100bp over official price talk. “At the end of the day, they raised the pricing to a level where we wanted to participate,” notes a participating investor. Several accounts were seeking at least 200bp over, which was already 50bp inside where the company priced its last ABS issue in 2009. The deal was oversubscribed by just 1x with 80% participation coming from institutional investors and the rest comprising wealth managers. “We raised MXP2.5bn which reflects confidence in the Mexican market,” says a banker on the deal. Proceeds will be used to pre-pay MXP2.2bn in asset-backed bonds due December 2011, which were priced at TIIE+250bp in 2009. Both bond issuances were backed by a trust that held account receivables originated by Cemex Mexico and Cemex Concretos. The new instruments will be backed additionally by Cemex Agegados and Cemex Vivienda. Cemex was last in the international market in July with a $659m retap of its existing 9% 2018s through Citi. Ixe was the sole lead on this transaction. The bonds are rated mxAAA on a national scale by S&P.
Compartamos Preps Domestic Issue
Mexico’s Banco Compartamos is preparing to issue up to MXP2bn ($166m) in floating rate bonds in the domestic bond market. The micro-lender will issue 5-year bonds that will pay a spread over TIIE. Pricing is expected in mid-September. Bancomer, Banamex and HSBC are managing the sale, rated AA on a national scale. In 2001, Banco Compartamos became the first micro-lender to issue debt in the local capital markets. Compartamos last visited the local bond market in October 2010 when it sold MXP1bn in floating rate bonds that were priced at TIIE+130bp.
Ecodiesel Advances Vanguarda Buy
The board of Brasil Ecodiesel has approved a plan to buy Vanguarda by using new shares, moving the two closer to a union that has been in the discussion phase for several months now. Ecodiesel, Brazil’s largest biodiesel manufacturer, will issue new shares to holders of soy and cotton grower Vanguarda. Ecodiesel’s calculations put the value of the combined entity at around BRL2.23bn ($1.4bn). The transaction still must be approved by shareholders. The agreement follows a courtship period that saw Ecodiesel’s board reject a May proposal from Vanguarda to sell itself for BRL0.89 per share, or roughly the same valuation. The new entity is expected to add scale and reduce risk to the two operations, as well as bring Ecodiesel to profitability after reporting a loss of BRL22.9m in 2010, down from a loss of BRL34.9m in 2009. Credit Suisse, Morgan Stanley, MSCardim and Apsis advised Brasil Ecodiesel. Vanguarda declined to comment on advisors, waiting to make its own announcement expected today. In early 2010, Vanguarda tried but failed to sell $200m in 2015 bonds after it was heard offering to pay an 11% handle on the B3/B minus transaction.
EPM to Seek Funding Next Year
Empresas Publicas de Medellin’s financing needs are covered over the next year, but during the second half of 2012, the Colombian quasi-sovereign utility will start to seek additional funding in both the international and local bond markets, CFO Oscar Herrera tells LatinFinance. The borrower intends to become a frequent issuer in the foreign markets after raising COP1.25trn ($679m) in January when it sold a 2021 global peso bond at 99.170 with an 8.375% coupon to yield 8.50%, Herrera adds. That transaction marked its second among international investors, with the first being a $500m 7.625% 10-year that was issued in 2009 via BAML and JPMorgan. “We will do pesos or dollars according to our needs,” he says. For the next year the company only needs to raise another $500m to cover its $800m-$1bn capex plan for 2012, but it may require more for acquisitions. “We are taking this year to consolidate the acquisitions we have made, but in 2012, we will be looking for new acquisitions in the region and that will probably need additional funding,” Herrera says. In late 2010, EPM bought Guatemalan distribution utility EEGSA for $605m in cash, plus the assumption of existing debt. Herrera doesn’t discount the possibility of tapping local markets outside of Colombia if it were to make more cross-border purchases. The company is targeting assets mostly in Central America, except for Nicaragua, but it is also eyeing Brazil, Chile and Peru. “If we were to make an acquisition in Chile or Peru, those markets are very good for raising funds at good spreads, but in Brazil it is different given the higher cost of debt,” Herrera adds.
Holcim Mexico to Issue MXP Bonds
Holcim Mexico plans to raise up to MXP3bn ($249m) in the domestic bond market in late September. The bonds, rated AAA on a national scale, are scheduled to be issued late September. The bonds will be guaranteed by Switzerland’s Holcim. Tenor has yet to be determined, but the cement company may raise the money through 2 tranches, offering fixed and floating rate instruments. Proceeds are going to refinance debt. Banamex, BBVA Bancomer and Santander have the mandate.