Pacific Rubiales has launched an offer to exchange any and all of its outstanding 8.75% 2016 bonds for new 7.25% 2021s. Holders will receive $1,150 cash per $1,000 principal if they accept by the December 16 earlybird date, and $1,120 thereafter. The new notes are the same as those issued Monday through the sale of $300m in 10-year NC5s that were priced at par to yield 7.25%. Bank of America Merrill Lynch managed the new issue and is also managing the exchange offer.
Yearly Archives: 2011
Posted inDaily Brief
Peru Seen Holding Rates
Peru’s central bank is expected to hold its benchmark rate at 4.25% at the policy meeting today. Though 12-month inflation numbers are above-target, concerns about stalling global growth appear to outweigh fears of domestic overheating. “The central bank seems committed to keep interest rates unchanged despite higher headline inflation,” says RBS, which is among the shops forecasting a continued pause.
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Rabobank Set for Chile Bond
Dutch bank Rabobank has revived plans to issue bonds in Chile’s local markets, this time targeting an up to UF2m in 5-year bullet. The bank had been initially eyeing a sale last week, including the options of a UF-denominated tranche with a 3.05% coupon and a peso tranche with a 6.05% coupon. Proceeds will be used to fund the bank’s operations. The bond is rated AAA on a national scale. Celfin and Deutsche Bank are managing.
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Recope Preps CDB Loan
Costa Rica’s Recope and the China Development Bank (CDB) are working on a 15-year $800m-$900m syndicated loan with a 3-year grace period arranged by CDB to fund improvements at Soresco, a joint refinery venture between China National Petroleum Corporation (CNPC) and Recope, the Costa Rican government says. The Costa Rican national oil refinery has signed a mandate letter with the bank and preliminary financial conditions are being explored, says a person familiar with the agreement, who declined to comment on the interest rate. Soresco, created in 2008, will invest a total of $1.24bn to revamp and expand the Moin-based refinery which will process 60,000 barrels of oil per day. The remaining $300m to $400m will be covered by both partners in equal amounts. Recope plans to issue bonds in the local market in 2012 to finance its share of the deal. As structured, the Soresco joint venture will take care of construction and then lease the facility back to Recope for 15 years with an option to purchase. The lease fee to be paid to Recope will be calculated assuming a 16% IRR for the project.
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T&T Approved for IDB Loans
Trinidad and Tobago has been approved for $130m in loans from the IDB, with $80m of it earmarked for climate change assessment and framework development and $50m for enhancing financial sector stability. The $80m loan has a 20-year term and four-year grace period, with a variable interest rate based on Libor, while the $50m loan has a 20-year term and 5-year grace period, with a variable interest rate based on Libor.
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Uruguay Launches Tender Offer
Uruguay has launched an exchange offer targeting its $1.23bn outstanding in 5.0% inflation-linked 2018 bonds and several series of expensive USD and EUR denominated notes. The sovereign is offering to swap new 4.375% 2028s for the 2018s, and is making a cash offer to holders of 12 series of USD bonds and 3 series of EUR-dominated bonds, spending up to $1.0bn total. In the exchange offer, the sovereign is offering holders UYP110.25 in new 2028s per UYP100 principal of the 2018s. It is offering a cash payment of $1,085.00- $1,392.50 per $1,000 principal, depending on the series, to holders of the 12 outstanding USD series due 2013-2036 and with coupons of 6.875%-9.250%. Holders of 3 series of EUR bonds due 2012-2019 paying 6.875%-7.00% are being offered EUR1,026.25-EUR1,140.00 cash, depending on the series. The exchange offer expires Friday. The sovereign Monday sold UYP19.906bn ($1bn) in inflation-linked 2028 bonds to fund the cash tender and for other budget purposes, as it moves to de-dollarize its curve, extend duration and provide liquidity to its existing bonds. The sovereign priced the bonds at par with a 4.375% coupon. Citi and HSBC managed the sale, rated Ba1/BB+.
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Brazil’s Petros Ups Stake In Marcopolo
Petros, the employee pension fund unit for Brazil’s oil company Petrobras, has increased its position in Brazilian bus maker Marcopolo to 15% of the preferred shares. Though Petros does not disclose the specific size of the increase, its new position represents 41.6m preferred shares, which would be worth BRL321.9m ($180.25m) at Monday’s BRL7.73 closing price. Officials at Petros and Marcopolo could not immediately be reached for comment or additional details late Monday. This increase gives Petros control over 9.29% of Marcopolo’s total capital. The purchase is part of a long-term investment strategy, the fund says, and it includes no attempt to change the company’s management.
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Celistics Tests Appetite for New Names
Debut issuer Celistics is venturing forth next week to meet investors amid expectations that it could try its hand in the bond markets. The LatAm consumer electronics logistics provider will be in New York on Tuesday, in Boston on Wednesday, in London on Thursday and in Zurich on Friday. BCP Securities, Citigroup and UBS are taking the credit on the road.
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Colombia’s Exito Expects Full Payment from Venezuela
Colombia’s retailer Exito has received $72.4m out of a $90.5m payment it is owed from the sale of Venezuela’s Cativen retailer to the Venezuelan government. Exito expects to receive the last installment of $18.1m in November 2012 which would finalize the transaction. Exito officials could not immediately be reached for comment. The payments to Exito stem from French retailer Casino’s decision in November 2010 to sell an 80.1% stake in Cativen to the Venezuelan government for $690m. The sale included Exito’s 28.6% holding in the company. As part of the deal with the government, Casino retained 19.9% to provide operational support. The deal involved a 60% upfront payment to Casino upon the closing of the deal, with 20% paid in cash and 40% in two dollar denominated promissory notes maturing in Nov 30 2010 and Nov 30 2011.
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Investors Take a Shine to PacRu
Colombia’s Pacific Rubiales joined other issuers rushing to market Monday when it priced a $300m 10-year NC5 that was upsized by $50m to make room for more accounts after getting $250m in reverse inquiry. The Ba3/BB E&P operator priced the bond at par with a 7.250% coupon, tight to guidance of 7.375% (+/- 0.125), following initial 7.5% whispers. The bonds were trading up a point in the grey, according to one investor. The trade was largely comped against the borrower’s existing 8.75% 2016s which had been trading at 6.1%-6.0% YTM or at 5.57% on a yield to average life basis. “The deal was not cheap, but it is a good credit, safe haven and operates in the jurisdiction where there is local demand for the bonds,” notes one investor. Demand was driven by high quality asset management accounts mostly from the US. The funds will be used for general corporate purposes. Bank of America Merrill Lynch (BAML) was sole bookrunner on the transaction. Last month, PacRu converted CAD236m ($232m) of its 8% 2014 convertible debentures via an early conversion offer that drew participation from holders of 98.9% of the bonds. One of LatAm’s largest private oil and gas companies, Pacific Rubiales has principal operations in Colombia, Peru and Guatemala. The 8.75% 2016 was its last previous new issue, done in November 2009 when it priced $450m at an 8.95% yield via BAML and Citi.