Mills Estruturas e Servicos de Engenharia is set to raise BRL270m ($134m) in Brazil’s domestic bond market, it says, reaching the top of a BRL200m-BRL270m range and tightening pricing from initial expectations. The engineering firm’s sale features a BRL161m 2017 tranche paying the DI+0.88%, coming in under a DI+1.0% ceiling, and a BRL109m 2020 inflation-linked tranche paying 5.50%, coming in under a 5.90% ceiling. Mills plans to use proceeds to finance investments, repay debt and for working capital. An official at the company declines to offer additional details on the transaction, done under the rule 476 restricted format, as it is not fully settled.
Yearly Archives: 2012
Posted inDaily Brief
Mitsui Adds GN Mexico Gas Stake
Mitsui & Co is set to purchase a 15% stake in Gas Natural Mexico (GNM), it says, spending $93m. The Japanese buyer has agreed to acquire 13.25% from Spain’s Iberdrola for $82m and another 1.75% from other shareholders for $10.8m. The move for the gas distributor expands Mitsui’s footprint in Mexico, where it is engaged in various gas-related activity, notably the Manzanillo LNG import terminal. The deal represents Iberdrola’s exit from GNM, as part of the Spanish company’s broad non-core asset sale plan, which aims to raise EUR2.5bn ($3.25bn) during 2010-2012. The completion of each transaction is subject to regulatory approvals. Gas Natural and a subsidiary control 70.9% of the Mexican unit.
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Pacific Rubiales Enters Brazilian Farm-in
Colombian oil producer Pacific Rubiales has agreed to a farm-in agreement for four blocks in the Bloques Karoon in Brazil, with an option to take a stake in a fifth. The blocks are owned by Karoon Gas Australia, and with the agreement, Pacific Rubiales takes a 35% stake in four of them and has the option to take a 35% stake in the fifth. An upfront payment of $40m covers sunk costs and could be increased by three wells at $70m each as the process continues, with the expectation of up to some $250m total to be paid out over the next 1.5-2 years. Pacific Rubiales plans to use cash on hand or generated cash flow to fund the project, and works with internal advisors on the deal.
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Aval Looks at Bond Market
Colombia’s Grupo Aval preparing to issue $1bn in the international bond market, according to Moody’s and Fitch, who assign respective Baa3 and BBB minus ratings to the proposed issuance. The bond is expected with a tenor of up to 10 years, and is heard coming as soon as this week. The holdco for financial institutions including Banco de Bogota is raising funds to bolster investments and for general corporate purposes. Aval debuted the international bond market in January, pricing a $600m 5.25% 2017 at a 5.375% yield, through JPMorgan and Goldman Sachs.
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Brazilian Gets High-Yield Rating
S&P has given Brazilian infrastructure company OAS a BB minus rating, it says, based largely on a strong outlook for regional infrastructure investments in the coming years. “We expect OAS will reduce its debt in the next several years as it captures cash dividends from its several investments without incurring significant additional debt,” the agency says, noting a high indebtedness now resulting from aggressive expansion in recent years. It expects adjusted total debt to Ebitda of less than 6.0x by 2013 and lower afterwards, with sub-4x levels likely resulting in an upgrade. OAS was also assigned an A minus national scale rating, and has a stable outlook.
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FPSO Bond Talking with Buyers
SBM Offshore’s SBM Baleia Azul unit is heard to be in discussions with buyers regarding its planned $500m bond financing for a floating production, storage and offloading vessel (FPSO). Mistubishi UFJ, Mizuho, Rabobank and TD are managing the sale, to be done as a private placement under the RegD format. The timing is unclear. The BBB rated 2027 bonds are backed by future revenues from a contract between Petrobras and SBM’s Cidade de Anchieta vessel, which initiated production Monday. The structure appears similar to transactions used to finance drillships with Petrobras contracts, but this would be the first time in LatAm it is used for an FPSO, an asset so far accustomed to the loan markets.
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Mexican Gets Loan
Mexican industrial group Cydsa has signed a $50m 5-year loan, it says. The credit from Rabobank is done at its Valores Quimicos subsidiary and raises funds for an electric cogeneration project. It does not disclose the interest rates and officials do not respond to a request for comment.
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Mexican Specialist Plans CCD
Mexican investment shop Grupo Axis is preparing a transaction of up to MXP6.5bn ($508m) in Mexico’s certificado de capital de desarrollo (CCD) market, according to regulatory filings. The specialist investment bank and asset manager is preparing a fund that may make equity or credit investments across a broad group of setors. As has quickly become the trend in the CCD market following regulatory changes last year, the total amount should be reached through a series of capital calls. The documents do not detail the return structure, though the issuer says is targeting a return of more than 20%. Banamex is managing the sale. Founded in 1990, Axis has made investments in and done transactions for sectors including energy and telecommunications.
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Moody’s Negative on Argentina
Moody’s has lowered the outlook on Argentina’s B3 rating to negative from stable, it says. The rating agency cites a “haphazard” policy environment, concerns about official reporting of GDP, inflation and other data, and the sovereign’s lack of resolution to debt arrears with the Paris Club. “The combination of unreliable economic statistics, continued underpayment of debt obligations, and lack of resolution of debt arrears one decade after the original default represent conditions that are unique among B-rated sovereigns and denote underlying credit risks,” Moody’s says. If the country’s main economic and debt metrics are affected these problems, the agency would consider a downgrade. S&P lowered the outlook in its B rating to negative in April. Following a meeting with the government, the IMF “regretted the lack of sufficient progress” Argentina has made regarding the quality of its inflation and GDP growth statistics, and may consider additional steps after further review, the IMF says. The reprimand was well short of what the fund was expected to do as far as punishing Argentina, Nomura says in a report.
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Safra Tightens Grip on Swiss Bank
Safra is set to control 90.47% percent of Swiss private bank Sarasin following an offer to minority shareholders, it says. The bank has also extended the offer to October 5 in the hope of getting additional acceptance. Safra bought a controlling stake in the Swiss private bank from Dutch cooperative Rabobank last year.