Brazilian utility Light has initiated the sale process for a BRL425m ($236m) debenture offering. The 2019 local bonds pay the DI+1.19%, and amortize in equal parts in each of the final 4 years. The issuer plans to use proceeds to repay short-term debt. Banco do Brasil is managing the sale, done under the rule 476 restricted format.
Yearly Archives: 2011
Posted inDaily Brief
OSX Considers Norwegian Niche
The Norwegian bond market and mezzanine financing are among some of the options OSX is considering, says Roberto Monteiro, the company’s CFO. The Brazilian shipbuilder, which recently saw its first FPSO delivered in Rio de Janeiro, may receive a welcome reception in a Norwegian market already familiar with the offshore oil sector. “Many oil companies do bonds in Norway,” says Monteiro. “This is something we may consider. It is not a market where you can finance an FPSO, but it is an interesting strategy for a bridge.” In a good year, the Norwegian market absorbs some $5bn-$6bn in debt with tenors ranging from 3 to 7 years, he adds. This comes as the company puts together a mezzanine loan of around $50m in size to bring the debt component of the recent OSX-1 financing to 80%. This is another niche that OSX is willing to explore. “You can raise $100m here and there. You can always be in the market rolling this [over],” he adds.
Posted inDaily Brief
PacRu Tops $336m in Tender
Creditors holding $336.4m of $450m in outstanding Pacific Rubiales 8.75% 2016 bonds have agreed to exchange them for newly issued 7.25% NC5 2021s following the close of the early subscription period. The Canada-based Colombian oil producer has also extended the expiration date on the offer by another day to January 3. Pacific Rubiales is offering new 7.25% NC5 2021s identical to those sold for cash in a $300m offering earlier this month. Holders tendering before the December 16 early deadline get $1,150 in new bonds per $1,000 tendered, but will only receive $1,120 thereafter. Bank of America Merrill Lynch managed the new issue and is also managing the exchange offer.
Posted inDaily Brief
Pemex Unit Names New Director General
Pemex has named Alejandro Martinez as director general of Pemex Gas y Petroquimica Basica. He has worked within the unit since 1995 in various capacities. The state-owned oil company plans to name a head of the Pemex Internacional (PMI) trading arm on Thursday.
Posted inDaily Brief
Suzano Seeks Leverage Waiver
Brazilian pulp producer Suzano Papel e Celulose is asking domestic bondholders to waive covenants limiting its leverage. Forex pressures are mainly responsible for the company’s net debt hitting BRL5.29bn ($2.84bn) as of September 30, putting its net to equity ratio over established limits at 4.2x. Suzano plans to offer holders a premium for accepting the waiver, though it does not elaborate on the value. The company has said it also plans to sell assets in a bid to reduce debt.
Posted inDaily Brief
Vitro Restructuring Faces Court Order
A New York Court has slapped a temporary restraining order on Mexico’s Vitro, preventing its subsidiaries from approving a controversial $3.6bn debt restructuring plan that has irked foreign bond holders. Judge Bernard Fried, of the NY State Supreme Court, has ordered Vitro subsidiaries to “withdraw their consent” to the plan. Under the restructuring, Vitro would relieve its subsidiaries of serving as guarantees for outstanding debt. Vitro plans to appeal the ruling, Roberto Riva Palacio, a Vitro spokesman, tells Latin Finance. Riva Palacio points out that Vitro’s legal team set up a Monday hearing with Federal Bankruptcy Judge Harlin D. Hale who approved Vitro’s Chapter 15 filing, to request a stay of this order. Riva Palacio could not immediately comment on what the standing restraining order means for the already-approved restructuring plan. The glassmaker used roughly $1.9bn in intercompany debt to give it enough voting power to approve what was largely an unpopular restructuring plan for other creditors. As it stands, the company’s restructuring proposal includes $814.7m in new 2019 bonds, a fee of up to $32.7m and mandatory convertible debt of $95.8m. JPMorgan has estimated that creditors who accept the deal may recover between 48 and 60 cents on the dollar, depending on the level of debt-holder support. Vitro’s move has aggrieved bondholders and caused other investors to worry about the repercussions that a successful restructuring such as Vitro’s could mean for Mexican debt investors in the future.
Posted inDaily Brief
Wamex Retaps CCDs
Wamex has reopened its certificado de capital de desarrollo for MXP667m ($48m), according to the Bolsa. The 2019 CCD was originally sold in November 2009 for MXP750m. At the time, it failed to reach its MXP1bn targeted size, but the borrower was expected to return to market to make up the difference. Proceeds from the transaction created a private equity fund that invests in Mexican companies or projects. Buyers of the instruments receive 100% of their original investment, plus an additional 12.5% preferred return. After that, investors will get 80% of additional proceeds, with Wamex keeping the rest. ING managed the reopening.
Posted inDaily Brief
Cemig Picks Short-Term Debt Ahead of EDP Bid Results
Cemig has apparently elected to take out BRL6.5bn ($3.5bn) in short-term local debt should it win its bid for a stake in Energias de Portugal (EDP), holding off for now on any international debt deals to finance acquisitions. The borrower has mandated Bradesco, BTG Pactual, Itau, HSBC and Banco Votorantim on an up to 1-year note that would pay interest at up to 106% of the DI. The issuance would apparently depend on the results of the bidding for a 21.35% stake in EDP, which the Portuguese government is expected to announce as soon as this week. Cemig is one of several international bidders, along with compatriot Eletrobras. The state-backed utility had been evaluating a cross-border sale denominated in either USD or BRL earlier this year. Its Taesa unit in October also issued BRL1.4bn ($783m) in domestic short-term debt to help fund the purchase of a 50% stake in Abengoa Brasil.
Posted inDaily Brief
EM Equity Suffers Outflows
EM equity funds hemorrhaged $2.2bn during the week ended December 14, according to EPFR, including $280m from LatAm funds. In terms of performance, EM equity, fell 3.92% during the week ending December 15, and is down 21.77% on the year, according to Lipper. Similarly, LatAm funds lost 2.99% on the week, and have dipped 22.71% ytd. Global small and mid-cap funds tumbled 3.2% on the week, and have slipped 15.46% ytd.
Posted inDaily Brief
Essal Pulls Plug on Equity Sale
Corporacion de Fomento de la Produccion (Corfo) pulled the plug on an $80m-$90m offering of shares in water utility Essal after the sale process failed to clear a minimum floor price. The government financial entity is looking to sell 40% of Essal to get its position down to 5%, and had been planning to place 387.7m secondary shares at CLP90-CLP100 per share. It was to be repeat, though at a smaller size, of what Corfo did earlier in the year with its positions in Aguas Andinas, Essbio and Esval, under a broad government plan to sell assets to cover reconstruction costs from the 2010 earthquake. It is not known if Corfo might seek an M&A transaction for the stake, a move it was heard considering before electing a follow-on sale. Banchile, Bank of America Merrill Lynch and IMTrust were managing.