Emdersa has selected Jaime Barba as its CEO. The top job at the Argentine power distributor had been vacant since Jose Luis D’Odorico left in May. Barba has held various positions at Emdersa parent Edenor.
Yearly Archives: 2011
Posted inDaily Brief
EPM Upsizes Debut Loan
Colombian quasi-sovereign utility Empresas Publicas de Medellin (EPM) has upsized an IFC-supported A/B loan to $349m after receiving commitment letters from 14 commercial banks, the company’s CFO Oscar Herrera tells LatinFinance. The A loan remains with a $25m size, but the B portion has increased to $324m from $250m. The deal marks EPM’s first foray into the syndicated loan market as it looks to diversify its funding sources. The B loan pays Libor+187.5bp on a 5-year tranche and +215bp on a 7-year, both with 75bp commitment fees. For MLA tickets of $50m, participants receive upfront fees of 100bp on the 5-year and 130bp on the 7-year, 80bp and 105bp respectively for $25m tickets, 65bp and 85bp for $15m and 50bp and 65bp for $5m. The loan is rated Aa3 by Moody’s and BBB minus by Fitch. Proceeds will go towards investments in energy and water distribution.
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Imcopa Clinches Reorganization
Courts have approved the reorganization plan of Brazilian soybean grower Imcopa. Earlier this year, Imcopa sought consent from holders of its $100m 10.375% 2009. It offered $25.94 in cash per $1,000 principal amount of notes, which it says is equivalent to half the interest that would have accrued from last November through May 10. Imcopa had been negotiating a broad restructuring plan with bank creditors since early 2009.
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M&G Heard Extending Investor Talks
M&G Finance is heard extending fixed income investor meetings into next week as it looks to issue a 144A/RegS for life in $500m 7NC4 senior unsecured notes, with rumors of a 10-handle pricing. The US subsidiary of Italian chemical company Mossi & Ghisolfi International, with extensive operations in Mexico and Brazil, initially launched its roadshow July 25-29 in the US before wrapping up in London on Monday. Investors say they like the business, but express concern over a decision taken by the PET resin producer, under its hybrid bond agreement, to suspend coupon payments during the 2009 financial crisis. The company has since seen improvements in 2010 and 2011 supported by a favorable operating environment and declining competition seen by chemical commodity manufacturers. In 2007, M&G issued EUR200m 7.5% hybrid bonds and later bought back EUR128m of the bonds at 45% discount. The remaining EUR72m of the hybrid bond is held by third parties. “The company has a decent business but had a bad run when it penalized investors,” notes one banker. Fitch expects M&G’s net leverage ratio to increase to a peak of 4.4x in 2013 from 3.1x in December 2010 due to investments in new PET and PTA plants totaling around $700m. Use of proceeds is intended for capex, debt repayment, liquidity and working capital. Some investors looking at the credit are seeking a concession due to it being a first time issuer, its lower rating, small size, lack of strategic partnerships, and rising leverage. The bonds are rated B3/BB by Moody’s and Fitch. JPMorgan is the sole lead.
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Moody’s Raises Panama Outlook
Moody’s has revised the outlook on Panama’s Baa3 debt rating to positive from stable. “The Panamanian economy has continued to show remarkable and enduring dynamism, and is well positioned to grow at rates above its potential thanks to the expansion of the Panama Canal and the government’s ambitious efforts to improve and modernize the country’s infrastructure,” the agency says. The government has also kept a solid balance sheet, despite recent fiscal deterioration, and favorable debt dynamics. Future growth is supported by the $5.25bn Canal expansion and the government’s $13.5bn 5-year strategic plan to improve Panama’s domestic infrastructure and turn the country into a global logistical hub and major tourist destination. While the public debt stock is expected to continue rising in nominal terms, strong growth should see the debt burden fall to around 40% of GDP by 2012. Panama’s financing needs remain relatively small thanks to its moderate fiscal deficits. An upgrade would be likely, Moody’s says, if the government agenda continues without large deficits, and manages Canal windfall prudently.
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Pemex Amendment Nears Completion
Pemex has seen some banks fall by the wayside as it looks to amend a dual-tranche loan with tighter financing terms, but the transaction is on track to achieving its $3.25bn size, say bankers. Inbursa, the financial institution controlled by Mexican billionaire Carlos Slim, is heard to be one of the banks that have declined to participate. “They are price sensitive so for them it didn’t work and they declined,” says one banker. Banks that bought the loan in the secondary market were also expected to turn down the Mexican state-owned oil company’s offer. “The original price didn’t make sense, so that is why they bought it in the secondary,” the banker explains. That said, the amendment is expected to get final approval sometime this month, and the company is heard asking banks to roll over interest payments on a weekly basis until the new pricing has become effective. Pemex launched the refinancing of its $3.25bn dual-tranche loan in July, with the aim of reducing margins by another 50bp. It closed the original transaction in December, but had a change of heart after seeing telecom America Movil lock in just 50bp over Libor on a $2bn 3.5-year loan in April. After paying Libor+125bp on its $1.25bn 3-year revolver and plus 150bp on a $2bn 5-year term loan, Pemex was heard to be less than satisfied with the spreads it had achieved just four months earlier. The company intends to reduce the margin on the revolver to Libor+75bp, while also cutting the term loan to Libor+100bp. Commitments fees will also fall to 25bp from 45bp. Banks will be paid a 25bp amendment for rolling over existing debt, and 35bp for any new money. Commitments were due August 3 with the closing previously scheduled for August 5. Participants on the original deal were Deutsche, Goldman Sachs, Intesa Sanpaolo, Credit Suisse, Societe Generale, Bayern LB, JP Morgan, SMBC, Bank of Tokyo-Mitsubishi, Mizuho, Morgan Stanley, Banco Santander, Natixis, EDC, DZ Bank, Bank of New York and Scotia. Sumitomo came
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Volatility Raises Questions about Bond Supply
Some bankers have been predicting anywhere between $5bn-$7bn in new bond supply for September and perhaps some more this month as companies look to tap before the post-summer rush, but this week’s rout and the gloomy mood hanging over the market raises doubts about just how many deals will see the light of day, at least in the short-term. This comes after US equity markets fell a good 4% Thursday, while the Bovespa plummeted 5.7% as risk aversion spiked over fears of an economic slowdown. “If risks escalate and there is a massive selloff in the markets, the September pipeline could move to December,” says one investor. Names like development bank BNDES, Colombian utility Empresa de Energia de Bogota (EEB), Brazilian electricity company Eletrobras, Brazilian toll-road company CCR, steelmaker Usiminas as well as banks like Banco do Brasil and Bradesco have all been heard eyeing either the dollar or global BRL market. To be sure, in theory pricing has become even more attractive after the yield on the 10-year UST hit 2.46% Thursday, breaching the 2.49% low reached in November 2010, but volatility is likely to make execution difficult. “If USTs continue at low levels and market conditions permit, there is potential for very high volumes in the $5bn-$7bn range or more,” notes a DCM banker. “Activity in the secondary over the last few sessions has seen demand for the belly of the curve but there has been more interest for 30-year bonds.” However, Wednesday saw secondaries slump alongside the rest of the broader market. “This is probably the worse day in EM debt this year, though we have yet to get to levels seen during the May sell-off last year,” said one EM corporate investor Thursday. “People are waiting for the payroll number (Friday) to see if we get some relief from that.” Still investors have money to put to work and bankers have been expecting companies to start announcing deals in late August. Meanwhile, the buyside is putting greater emphasis on liquidity. “In t
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Paraguay Gets $75m from CAF
Regional development bank CAF has provided Paraguay with a $75m loan to support a government program to develop a more efficient and reliable national electricity system. The loan will also comprise an additional $20m in co-financing from the OPEC Fund for International Development (OFID). The estimated cost of the development program is $111m, of which 68% will be financed by CAF, 18% by the OFID and the remaining 14% financed by resources from the National Electricity Administration.
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Kirin Defends Legality of Schincariol Deal
Japanese brewer Kirin defended the legality of its acquisition of a 50.45% stake in Brazilian brewery Schincariol for BRL3.95bn ($2.52bn). Wednesday. On Tuesday, the minority shareholders Jose Augusto Schincariol, Daniela Schincariol and Gilberto Schincariol Junior, who own the remaining 49.55% of Schincariol, objected to the sale of the majority stake sold by their cousins, the brothers Alexandre and Adriano Schincariol. They say the deal violates a company bylaw requiring the right of first refusal to be offered to existing shareholder prior to a change of control. Kirin says its acquisition remains valid and that it has proceeded with the advice of local counsel, who addressed the issue in advance.
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BBVA Frances Sets Debt Program
Argentina’s Banco BBVA Frances has established a $500m debt program, according to filings with the local regulator. The program will allow the bank, which is controlled by Spain’s BBVA, to issue bother senior and subordinated bonds. The program carries local double A ratings.