Chilean retail holdco SMU has filed for an IPO, according to a banker managing the deal, aiming to price as soon as October. The portion of the company to be floated and the exact size and timing has not been determined, but the retailer is thought to be offering 18%, which could raise more than $200m equivalent. Celfin and Santander have been hired to manage the sale. SMU, which is owned by local businessman Alvaro Saieh, controls supermarket chain Unimarc, along with home improvement and convenience store chains.
Yearly Archives: 2011
Posted inDaily Brief
Market Rout Dampens New Issue Expectations
A market rout Monday that saw the Bovespa drop 8.1% and some high-beta sovereign credits plummet 4 points laid to rest any notions that borrowers might be able to print bonds quickly before any potential post-summer rush to the markets. While it is too soon to tell which direction markets might take in coming weeks or months, investors are clearly holding off until some clarity emerges after Monday saw the worst selloff since 2008 in the wake of S&P’s downgrade of the US over the weekend to AA+ from AAA. “If you are going to do a roadshow, you are wasting money and issuers should hold off for a month and wait for greener pastures,” cautions one New York-based investor. Such sentiments are hardly surprising after risk aversion spilt over into LatAm secondary markets Monday. High-beta credits like Venezuela and Argentina naturally felt the brunt of yesterday’s flight to safety, falling up to 4 points, but stronger investment-grade names such as Colombia’s Grupo Suramericana were also under pressure with its 5.7% 2021s closing lower at 98.00-99.50. Expectations varied widely yesterday, as market participants tried to assess the fallout. “I am not super-optimistic,” said a trader Monday. “I would feel comfortable being short, even after today.” Other traders, however, said clients are flush with cash and that they are awaiting the best time to re-enter the market. “Most of our clients are very liquid and have good cash positions and they are waiting for an opportunity to get in,” says another trader. Indeed, a surge of inflows into EM debt funds certainly inspired DCM officials looking to bring deals to market, at least before the US downgrade sent asset prices south. According fund data firm EPFR, EM debt funds took in an impressive $1.3bn during the week ending August 3, and bankers have been hoping that investors will be willing to put money back to work in LatAm once the market settles down. According to some traders, volumes in the secondary have been light and pri
Posted inDaily Brief
Agrosuper Advances IPO
Chilean food products company Agrosuper has registered to sell 15% of itself through an IPO. The issuer is raising funds for a $350m expansion plan that aims to boost exports. It does not yet give firm details as to the size or timing of the operation, to be led by Banchile and LarrainVial. Controlled by businessman Gonzalo Vial, Agrosuper specializes in ham, poultry and salmon, and has operations in Italy, China, Japan, Mexico and South Africa. The equity sale does not affect a $400m-equivalent local bond sale, which is also planned for the second half of this year.
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Argentina Throws in Towel on Brady Exchange
Argentina has canceled its offer to exchange $340m of defaulted Brady bonds after a US court decision meant the conditions of the swap couldn’t be met. The US Court of Appeals overturned an initial court order to release and transfer collateral securing the bonds to pay accepting holders, leaving the sovereign unable to complete the agreement. Officials had previously indicated an 80% acceptance rate, or $267m, for the offer launched in December. Despite the deal’s small size relative to the rest of Argentina’s defaulted debt, the exchange had been seen as another important step toward helping the country normalizing relations with the international investor community. Argentina was targeting $263m and EUR54m in Brady bonds, and had planned to issue new 2033 discount bonds, 8.75% 2017 global bonds and GDP linked securities in exchange, as well as pay cash. Bondholder Communications Group was the exchange agent and Cleary Gottlieb legal advisor, with Citi acting as fiscal agent. Argentina issued about $30bn in bonds under the 1989 Brady Plan in which 21 developing countries, including Brazil, restructured defaulted foreign debt. Argentina defaulted on the Brady bonds in 2001, along with the rest of its external debt. Argentina’s creditors agreed in 2010 to exchange roughly $12.1bn in defaulted bonds, or 66% of the $18.3bn it had been targeting.
Posted inDaily Brief
Dufry Acquires LatAm’s Interbaires
Swiss travel retailer Dufry has acquired airport retailer Interbaires in Argentina for $285m, part of four transactions for a total $957m the company closed simultaneously. Interbaires generates approximately $250m per year. Dufry has also acquired a Uruguayan retailer with $85m in revenues, and operations in Martinique, Ecuador and Armenia. In total, the new operations generated $395m in revenues for LTM to May, with $96.5m in Ebitda for a total implied valuation of 9.9x Ebitda, below Dufry’s own valuation of 10.3x Ebitda as of August 1. The transactions were fully financed through debt and the company has entered into an additional 5-year syndicated bank facility structured to sit alongside existing financing. The new facility, for $1bn, has been underwritten by BBVA, BNP Paribas, Credit Agricole, ING, Raiffeisen Bank, RBS, Santander, Unicredit and WestLB, and carries a floating interest. The company says it expects to see $25m in synergies over the next two years, with the acquisitions being accretive to earnings from 2012.
Posted inDaily Brief
EM Bond Funds See Safe-Haven Surge
EM bond funds took in $1.3bn for the week ending August 3, according to EPFR Global, as investors viewed the asset class as a safe haven amid broader market turmoil. According to Lipper, EM debt funds rose by 0.22% for the week ending August 4, and are up 6.70% ytd. Meanwhile, global income funds climbed 0.18% for the week, to reach 5.13% growth ytd. However, international income funds fell 0.54%, bringing the ytd return to 5.65%.
Posted inDaily Brief
Endesa Buys Ampla Stake
Spain’s Endesa has agreed to acquire a 7.7% stake in Brazilian electricity distributor Ampla Energia e Sevicos for $110m from Energias de Portugal. Endesa will own 99.63% of Ampla once the deal is complete. Ampla used BBVA as a financial advisor.
Posted inDaily Brief
ICA Units to Issue ABS Bonds
Two subsidiaries of Mexican builder ICA plan to issue up to MXP8.3bn ($692m) in asset backed bonds in the domestic market. The 21-year fixed-rate notes are guaranteed by future payments from contracts the Sarre and Papagos units have with Mexico’s secretary of public safety to build and operate prison facilities. The issue will be divided into MXP and inflation-linked, UDI-denominated portions. Pricing will take place in either August or September, according to bankers on the deal. Proceeds will be used to finance construction of the projects. HSBC, Bancomer and Santander are managing the sale, rated AAA on a national scale.
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ICBC Gains Foothold In Argentina
Industrial and Commercial Bank of China (ICBC) has agreed to acquire 80% of the shares of Standard Bank Argentina, Standard Investments, and Inversora Diagonal for $600m. The implied EV of $750 yields an implied EV/earnings multiple of around 18x, in-line with the 18x 2011 expected earnings Colombian conglomerate GrupoSura paid last month for ING’s LatAm insurance assets. Standard Bank will remain a 20% shareholder in Standard Bank Argentina following the transaction. Faizal Moolla, a Cape Town-based equity analyst with Avior Research, says the deal values the Argentine assets at 2.6x price-to-book. “Not a bad deal,” for Standard Bank, he says. Standard originally acquired its stake in the business for $120m in 2007, he adds, and will generate approximately $400m in proceeds from the transaction. “They made a good profit on this deal. We’re quite comfortable with what we see.” The asset is understood to have been widely shopped to Argentine buyers. The deal will also give ICBC first mover status among Chinese banks looking for a presence in Argentina, he adds. China is Argentina’s second largest trading partner. The asset is predominately composed of retail banking operations, though it also has corporate and investment banking operations. Both companies will capitalize the business with an additional $100m in equity. Standard Bank advised itself on the transaction, while JPMorgan provided a fairness opinion and Jones Day acted as legal advisors.
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LatAm Equities Return to Outflows
LatAm equity funds saw $390m in outflows for the week ending August 3, according to EPFR Global. EM equity funds, meanwhile, saw $1.2bn leave the asset class for the week as global equity markets crashed. Mexico equity funds lost $175m in their worst week since late December as investors penciled in reduced US demand for Mexico’s exports. Meanwhile, Brazil saw $80m in outflows. EM equity funds fell 7.2% for the week ending August 4, and are down 7.7% ytd, according to Lipper. LatAm funds also plunged 9.24% for the week, for a whopping 14.69% decline ytd. Global small and mid-cap funds also collapsed to the tune of 8.73% for the week, falling 6.33% ytd.