Chile’s Molibdenos y Metales (Molymet) has acquired a 13% stake in US rare earth producer Molycorp for $390.2m. The deal involves an all-cash acquisition of 12.5m shares of Molycorp common stock, for which Molymet gets a seat on Molycorp’s board. Officials at Molycorp could not immediately be reached for additional comment, and a Molymet spokesman declined to offer additional details of the transaction. Fitch Ratings noted that the deal should not affect Molymet’s BBB rating. Following the deal, Fitch estimates the Chilean company will maintain a debt to Ebitda ratio of 1.2x, a slight increase from its 1.0x four-year average, but still within its ratings range. Molymet is a leading player in the global market for molybdenum, a metal used to produce high-strength steel alloys, and rhenium, a rare silvery metal used in jet engine production. The deal gives Molymet the capacity to produce 19,050 metric tons of oxide from rare earths, and may reach 40,000 metric tons in 2013, the company says.
Category: Chile
Chilean Quasi Poised to Price
Banco Estado de Chile is targeting a $500m 10-year bond with guidance and pricing expected today. According to one investor, initial whispers are being heard at UST plus mid-200s area. Citi, Deutsche Bank and HSBC are leading the 144A/RegS transaction for the government-owned bank. The Aa3/A+ borrower was last in the international market in September 2010 when it issued a $500m 4.125% 2020 bond to yield 4.219%, via Deutsche Bank and JPMorgan. Those bonds have been trading around 102.50-103.00, or around 3.75% on yield basis.
Embonor Buys 50% of Plastics Maker
Coca-Cola Embonor, a bottler with operations in Bolivia and Chile, has purchased 50% of the outstanding shares of Envases CMF, a plastic container maker. Embonor paid CLP13.13bn ($26.3m) for the stake, which values the whole company at $56.2m, it says. The remaining 50% of the company is held by Embotelladora Andina, a Coca-Cola bottler that operates in Chile, Brazil and Argentina. Officials at Embonor declined to release details of the multiples paid for the company or how the transaction was financed. Officials at Envases could not immediately be reached for comment. The companies did not retain any advisors as they were comfortable in their knowledge of their respective businesses, an Embonor official says. Envases CMF manufactures plastic PET containers used for carbonated drinks, water, fruit drinks, and household cleaning products. The deal comes at a time of increasing consolidation in the carbonated drinks bottling business. This is particularly true in Mexico, a country that consumes more Coca-Cola than any other Latin American nation and is home to Coca-Cola Femsa (KOF), the largest bottler for Coca-Cola. In recent months KOF has acquired two regional independent bottlers in Mexico and industry observers expect more consolidation to take place going forward.
Metrogas Replaces CEO
Victor Turpaud will replace Eduardo Morande Montt as CEO of Metrogas, effective April 1. Turpaud has worked as finance and administration manager for the company, and has held various positions since 1995. Metrogas is a subsidiary of natural Chilean gas supplier Gasco.
Chilean Hospital Preps Local 30-Year Issue
Chilean private hospital Clinica Las Condes is preparing to launch an up to UF1m ($46.2m) 30-year domestic bond during the first half of the year, says a person familiar with the plans. Proceeds will primarily go to finance investments, including an expansion project set to begin in 2013. The project doubles the Clinic’s capacity with three new buildings. The issue is rated A+ on an national scale.
Corpbanca Names CEO
Corpbanca has named Fernando Massu as CEO. Working as the Chilean bank’s chief treasury officer since 2008, Massu will assume the top role on February 6 after resigning his position on the board. Massu previously worked at Citi and Santander. Mario Chamorro announced plans to resign as CEO in December, citing personal reasons.
Factorline Plans Local Bonds
Chilean financial services company Factorline has registered a 25-year, CLP70bn ($142.2m) bond shelf in the domestic market. It is targeting an issuance toward the end of March or early April, with the details likely to be defined in February, says a person familiar with the process. Factorline is raising funds to refinance liabilities and fund growth. Scotia is lead. In April 2011, Factorline issued UF1.6m in domestic bonds.
Red Salud Raises UF2m
Chile’s Red Salud has raised UF2m ($92m) in the domestic bond market as it looks to make new investments and refinance debt. It priced a CLP21.80bn ($45m) peso-denominated 5-year bullet at 99.25, with a 6.50% coupon to yield 6.70%, or government bonds plus 187bp. It also priced a UF1m 21-year inflation-linked bond at 101.20 with a 4.25% coupon to yield 4.14%, or 144bp over comparable government debt. The deal saw more than 2x demand. Celfin and IMTrust led the sale, rated A on a national scale.
Vapores Adds to Equity Raise
Chilean shipping and ports operator Compania Sudamericana de Vapores has raised CLP63.51bn ($129m) in the public phase of its equity follow-on, adding to the $659m raised so far. The issuer, working under a $1.2bn capital raising approval last year to help straighten the company’s finances, sold 630m shares at CLP100.81 each, according to a regulatory document. Vapores got CLP12.61bn in demand from 52 orders, comprised 83% of institutional and 17% retail. Celfin managed the trade. Vapores is controlled by Quinenco, the investment arm of the Luksic group. The plan also includes the spinoff of the company’s port and logistics unit, Sudamericana Agencias Aereas y Maritimas.
Top-Grade Bank Ventures Forth
Banco Estado de Chile plans to start marketing this week a benchmark 144A/RegS transaction among foreign accounts. The government-owned bank will meet fixed-income investors in London and Los Angeles on Thursday and Friday. The following week, the borrower will stop in New York and Boston on January 30, before finishing in New York and Chicago on January 31. Citigroup, Deutsche Bank and HSBC are arranging the meetings. The Aa3/A+ borrower was last in the international market in September 2010 when it issued a $500m 4.125% 2020 bond at 99.24 to yield 4.219% via Deutsche Bank and JPMorgan. Those bonds have been trading around 104.00-104.50 or around 3.55% on yield basis.