TNK-BP, the Russia-based oil company, has signed a farm-out agreement with Petra Energia for the acquisition of a 45% stake in 21 blocks in the Brazilian Solimoes Basin. The 21 oil and gas exploration blocks are majority owned and operated by HRT O&G. They cover an area of approximately 48,000 km2, and are located in the Amazon’s Solimoes basin. HRT also has a call option to acquire the stake for itself at a cost of BRL1.3bn ($824m). The blocks have a net prospective and contingent resource of 783m barrels of oil equivalent. Initial production from the fields in the Solimoes basin is expected in 2012. According to the agreement, the value of the transaction will depend on the future performance of the asset. HRT will remain the operator of the Solimoes project, with TNK-BP playing a more active role during the development and production stages. The closing of the transaction will be subject to final agreement between TNK-BP and HRT. A spokesman for HRT says the company has not received the value of the investment, but expects to get the documentation in the next several days.
Yearly Archives: 2011
Brazilian Metalworker Raises Debt
Brasmetal Waelzholz has completed the sale of BRL130m ($81m) of bonds in Brazil’s local market. The metalworker’s 2019 notes came at DI plus 3.0%, and amortize beginning in 2012. BW, as it is known, plans to use proceeds for capex and improving the capital structure of the business, according to a source at the company. Itau managed the rule 476 sale. BW was formed in 1973 from a joint venture of Grupo Souto Vidigal and Germany’s C.D. Walzholz. It supplies parts to the auto parts, appliances, hardware and several other industries.
Celulosa Argentina Postpones Dollar Bond
Celulosa Argentina has postponed its planned $150m 7-year NC4 after investors pushed back on yield guidance at 10%-10.25% area. “In the case that favorable conditions exist in the local and international markets in the near future, it is Celulosa’s intention to structure a new bond for up to $280m,” says the company in a filing with Argentina’s CNV. Investors had been asking for 11% plus to buy into the bond, but the pulp and paper producer cited regulatory constraints to pricing north of 10.25%. Celulosa’s difficulties came amid a tough week for LatAm issuers with Argentine blue-chip YPF also fighting to get satisfactory pricing and being forced to keep books open until this week. Citi and Credit Suisse were the leads. The credit is rated B2/B by Moody’s and Fitch.
Chile Grabs $564m from Water Equity Sale
The Chilean government’s Corporacion de Fomento de la Produccion (Corfo) has raised CLP260.64trn ($564m) from the sale of nearly all of its positions in water utilities Essbio and Essval. In a public follow-on, Corfo sold 3.655trn shares of Esval at CLP0.03 each and 10.17bn Essbio shares at CLP15.18 each, matching the floor prices set earlier last week. It offloaded 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with budgetary needs created by last year’s earthquake. Last month, for instance, the government sold $879m of Aguas Andinas. Corfo is set to keep a 5.0% position in each of Esval and Essbio, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, BAML and IM Trust managed the transaction, the same trio that handled Aguas Andinas. The offering also gives much more liquidity to each company – previously Essbio had a 5.4% free float and Esval less than 1%. Esval shares closed Friday at CLP0.03 Friday and Essbio at CLP15.18. Esval is the second-largest water utility in Chile, and Essbio the third-largest, both providing service in the central part of the country.
EM Bond Funds See More Inflows
EM bond funds took in $871m for the week ending July 13, according to EPFR Global. Performance, however, was not positive. Lipper showed EM debt funds slipping 0.62% for the week ending July 14, though they remain up 5.01% ytd. Meanwhile, global income funds inched up 0.22% for the week, building on growth of 4.06% ytd. International income funds rose 0.32%, bringing the ytd return to 4.65%.
Issuers Prep Bonds in Volatile Market
Close to $2.5bn in new LatAm bond supply is sitting in the immediate pipeline, but whether much of that sees the light of day will depend on events in the broader markets, say bankers. After a brief spurt of issuance earlier this month, activity was reduced to a trickle last week with just the Province of Buenos Aires raising $250m through a retap of its 2015s, but a failure to reach a consensus on pricing forced other borrowers to either extend deadlines or indefinitely postpone deals. Worries over European and US debt problems are threatening to close windows as the buyside seeks extra premiums to compensate for increased risks. More bad news from the US and Europe this week could spoil the fun for LatAm issuers preparing to issue. These include Argentine oil company YPF, Guatemala’s Banco Industrial, oil services credit Quieroz Galvao, sugar and ethanol concern Usina Vista Alegre and the Dominican Republic. This comes as several companies carry out liability management operations involving the issuance of new bonds. Chile’s AES Gener, for instance, is looking to sell a new 2021 as part of its exchange and tender, while Argentine utility Transener wants to do the same. This doesn’t include new names that are also heard plotting bond sales such as Argentina’s Grupo ODS, which is thought to have mandated Credit Suisse for a $150m 2018. If market conditions stabilize YPF could be the first off the block with an up to $300m 8-year, 7-year average bond (Ba2/BB minus). The subscription period has now been extended to July 22. The Argentine blue-chip name wants to push out a marquee trade, but it may have to show some flexibility on pricing versus comp Pan American Energy. “[YPF’s postponement] is a precautionary measure on the issuer’s part,” says one trader Friday. “Markets have stabilized post the Province of Buenos Aires tap so I would expect them to put out guidance Monday sometime, if they can overcome their pride to price flat to Pan American Energy.” On Friday PA
LatAm Equity Sees Outflows
LatAm equity funds saw $128m in outflows for the week ending July 13, according to EPFR Global. EM equity funds, meanwhile, had $878m in inflows for the week. Performance was negative, with EM funds falling 2.94% for the week ending July 14 and 1.44% ytd, according to Lipper. LatAm funds also dropped 4.19% for the week, and remain negative 5.96% ytd. Global small and mid-cap funds also slipped 3.11% for the week, but remain up 2.90% ytd.
Mexico RE Gets IFC Loan
Artha Capital, a US-based fund manager, is securing a $25m IFC loan to invest in the Mexican real estate sector. The project involves the acquisition and development of land for planned urban projects and basic infrastructure for housing, tourism, industrial, and commercial development. The investment will address inefficiencies in Mexico’s land development process.
MRV Completes Local Bond Sale
Brazil’s MRV Engenharia has finalized the placement of BRL500m ($310m) in local bonds. The homebuilder’s 2016 were priced at the DI rate plus 1.5%, matching the ceiling it had set. The bonds amortizes in each of the final 2 years. MRV is raising funds to adjust its debt profile. Banco do Brasil managed the sale, done under rule 476. MRV is rated AA minus on a national scale.
Nutresa Wraps Up FO
Colombia’s Nutresa has finalized the allocation for its COP522.5bn ($299m) equity follow-on, getting a total demand of COP9.21trn, or 17.6x. Final book size tops the food products company’s previous COP8.98trn estimate that had come at the end of its subscription period. Existing holders exercising their preferential rights claimed COP256.47 of the sale, going to 3,044 buyers. New investors accounted for COP266.03bn, from 20, 407 buyers, including COP186.22bn from the general public and COP79.81bn from institutions. Nutresa had set a COP20,900 per share price for the 25m shares at the beginning of the offering period. The issuer, formerly known as Grupo Nacional de Chocolates, is raising funds for expansion and to increase its liquidity. Bolsa y Renta managed the sale. Nutresa stock closed at COP21,700 Friday. The transaction is expected to be the last before a follow-on from state oil behemoth Ecopetrol. Investors are eagerly awaiting the announcement of the size and share price of the deal – expected to raise at least $800m equivalent – on or before the start of its sale period July 27.