With an eye on continued growth in infrastructure opportunities in Colombia, Construcciones El Condor could consider issuing a bond of up to $100m in the next two to three years, Alejandro Correa Restrepo, its director of investment, tells LatinFinance. Colombia has a need for continued growth in construction as it relates to infrastructure, with a rising interest in improving road conditions and other forms of transportation, he says. The company will carefully evaluate the opportunities ahead, as it looks to sign on to projects the government is now structuring to allow private companies to propose infrastructure projects. It could also choose to proceed using its own funds, he adds. The builder completed its IPO earlier this year via Bancolombia raising COP162.58bn ($92m).
Yearly Archives: 2012
Colpatria Eyes Domestic Bonds
Banco Colpatria could look to issue COP100bn ($56m) in subordinated bonds in Colombia’s domestic market, with the ability to upsize to as much as COP150bn, say sources familiar with the Colombian lender’s plans. The notes are expected to be sold October 5, and will most likely have a 10-year maturity and be IPC-linked. Colpatria, rated AAA on a national scale, is heard to be self-leading the sale. The upcoming issuance is not yet rated, through its most recent subordinated sale got an AA+ mark. In that sale in February, Colpatria issued COP150bn in 10-year subordinated notes paying inflation plus 4.64%.
Fibria Continues Asset Sales
Brazil’s Fibria has agreed to sell its Losango forest assets in southern Brazil to Chile’s CMPC, it says, for BRL615m ($304m). The asset is the latest outside Fibria’s core business to be sold as a part of a long-term deleveraging plan that has included numerous debt refinancing and an equity raise this year. The Chilean pulp and paper producer plans to make the cash payment to Fibria unit in three steps. It will disburse BRL488m upon approval from the CADE antitrust regulator, another BRL122m upon approval from other government agencies and a final BRL5m upon transfer of contracts associated with the land assets. The final value could also be adjusted following due diligence, Fibria adds. Fibria bought back $514m in 2020 bonds in June, and raised BRL1.44bn through an equity follow-on in April. It sold its Corus Agroflorestal forestry assets in March, raising BRL235m. Investors, debt buyers in particular, have been largely receptive to Fibria’s continuous deleveraging efforts in the past few years, though rough conditions in the global pulp market may challenge Fibria and its peers going forward. “We are negative regarding the debt reduction prospects of Latin American pulp, paper, and forest products companies in the near to medium term. We expect [free cash flow] to continue to be pressured in 2013 as additional pulp capacity enters the market. In order to avoid negative rating actions in this environment, management teams will need to seek alternative avenues for deleveraging, including the sale of assets,” Fitch says in a report. Additional challenges for the industry include poor demand in the weak US and European economies and slower growth in EM, it says. Barclays notes the deal is positive, finding BRL650m value in the assets. “Although we see the asset sale as positive for Fibria, it was widely anticipated by the market and should not represent a major development in terms of deleveraging,” the shop says. It sees 2013 net/debt to Ebitda falling to 2.8x from
Itau Set for Chilean Issuance
Itau plans to issue UF1m ($47m) in 14-year bullet bonds in Chile’s local market Wednesday, according to a source familiar with the bank’s plans. The bonds are rated AA/AA minus on a national scale and come with a 3.75% coupon. Itau is managing the sale. In August, the bank issued UF2m in the Chilean market, pricing a UF1m 2019 bullet tranche at 99.41 with a 3.5% coupon to yield 3.6%, and a UF1m 2028 at 99.40 with a 3.75% coupon to yield 3.8%.
Jaguar Taps CEO
Jaguar Mining, a Canadian gold miner operating entirely in Brazil, has named David Petroff president and CEO, it says. The appointment, which also includes a spot on the board of directors, is effective immediately. John Andrews had been filling the role on an interim basis, and remains on the board of directors. Petroff was most recently CEO of Breakwater Resources from 2009 until it was acquired by Nyrstar Canada in August of last year. Toronto and New York listed Jaguar operates in the Brazilian states of Minas Gerais and Maranhao.
Light Clinches Local Bonds
Brazil’s Light has completed the sale of BRL500m ($245m) in bonds in the domestic market, it says. The utility’s 2026 bond pays the DI+1.8%. BRL470m of the issue was done through the Light Servicos de Eletricidade unit, and BRL30m through Light SA. Proceeds fund Light’s project pipeline. Caixa Economica Federal is managed the sale.
Santander Chile Meets Buyside
Santander Chile is on a 2-day roadshow this week ahead of a potential transaction in the bond market. The bank had visits with fixed income accounts on Monday and plans to wrap up today in London, Boston and New York. Deutsche Bank, Goldman Sachs, JPMorgan and Santander are managing the meetings for the Aa3/A/A+ bank. Santander Brasil was in the market last week with a $550m reopening of its 4.625% 2017 bonds, getting a 4.30% yield.
Stone Harbor Adds Portfolio Manager
Stone Harbor Investment Partners has hired Bill Perry as a partner and portfolio manager for its emerging-market debt effort, according to a source familiar with the move. Perry, a corporate debt specialist, joins from Morgan Stanley, and will be based in New York.
Mexico Holds Rates
Mexico’s central bank has again held the policy rate, which has been at 4.50% since July 2009. Citi notes “a slightly more hawkish stance” from the bank, citing that “in particular, the board opted for changing the wording of its policy paragraph by stating that it will remain watchful of inflation determinants as they ‘may make advisable’ to hike the policy rate.” Nomura, however, calls the hawkish tint a bluff. “A scenario of hikes, with the US economy decelerating, is very unlikely,” it says.
S&P Revises Guatemala Outlook
S&P has revised the outlook on Guatemala’s BB rating to stable from negative, it says. The agency highlights the potential for debt stabilization at 20% of GDP in 2014. GDP growth and tax revenue developments could help the republic’s finances going forward, says S&P, which in August 2011 took the outlook to negative alongside comments that increased political polarization was hindering needed fiscal reform amid low tax revenues and an increasing interest burden.