BBVA Chile is looking to follow BCI and Banco de Chile to Mexico’s domestic debt market. The bank is planning to issue up to MXN2bn ($149.1m) in bonds with a tenor of up to three years and a variable interest rate, according to rating agencies. The deal is rated AAA on a national scale. Banco de Chile is also expected to sell an up to MXP2.5bn 3-year bond, marking its debut in this market. Banamex and JPMorgan are managing that sale.
Category: Chile
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Creditors Approve La Polar Restructuring
Chilean retailer Empresas La Polar’s creditors have agreed to restructure about $900m in debt, helping the company avert bankruptcy. The move calls for a $220m equity capital increase, allowing La Polar to move forward in the restructuring process. In June, La Polar disclosed it overcharged clients for past-due store credit card bills and was setting aside nearly $1bn in loan-loss provisions. Authorities are investigating La Polar for raising interest rates, and charging delinquent fees to more than one million clients without negotiating new contract terms. It also allegedly managed two separate accounting books and gave regulators false financial information. Lazard is advising la Polar.
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Klabin, Arauco Acquire Land-Rich Forest Co
Brazilian paper manufacturer Klabin and Chilean wood products company Arauco have agreed to a $473.5m deal to acquire Florestal Vale do Corisco, a company that controls 107 hectares in the Brazilian state of Parana. The pair plan to acquire the shares through Centaurus holdings, a vehicle owned 51% by Klabin (51%) and 49% by Arauco. An official at Klabin said the company and its partner Arauco planned to use a portion of the land for several industrial purposes but could not offer further details on the deal or the company’s strategy. Both Klabin and Florestal were unable to comment on advisors used on the transaction.
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Sacyr Gets Chilean Road Loan
Spanish Construction company Sacyr Vallehermoso has reached a EUR276m ($379m) financing agreement with Chile’s Corpbanca to fund construction of a pair of motorways. Sacyr has a 35-year contract for the Bio-Bio and Rutas del Desierto concessions. Both parties decline to comment on the loan’s interest rate or maturity.
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LAN-TAM Combo Unveils Officers
LATAM Airlines Group, as the holdco representing the combination of Chile’s LAN and Brazil’s TAM is known, has announced its managerial structure. LAN CEO Enrique Cueto becomes CEO of LATAM, with LAN COO Ignacio Cueto moving up to fill the role of LAN CEO. Marco Antonio Bologna remains CEO of TAM. Libano Barroso, CEO of the TAM Linhas Aereas opco, becomes CFO of LATAM. The merger via share exchange announced late last year is awaiting regulatory clarifications in Chile and in Brazil and is expected to be finalized in Q1 2012. The two airlines will continue to operate independently, as Brazilian law prevents a foreigner from owning more than 49% of a Brazilian airline.
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Codelco Pulls Trigger on Anglo American Assets
Chilean state-owned copper producer Codelco has opted to exercise its option to buy 49% of the Anglo Sur mining complex, a group of Chilean mining projects owned by global miner Anglo American. The company can exercise its right to buy the stake, valued at $9.76bn, in January 2012. In preparation for a potential purchase, the copper miner secured a $6.75bn bridge loan earlier this month from Japan’s Mitsui and Co. Codelco originally bought the rights of purchase from fellow state-owned miner Empresa La Minera for $175m. The prime assets of Anglo Sur include the Chagres smelter, the San Enrique and Los Sulfatos exploration projects and two mines, Los Bronces and El Soldado. In public statements Friday, Chilean finance minister Felipe Larrain said the government expects Anglo American to honor Coldelco’s acquisition rights.
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Banco de Chile Sees Mid-November MXP Pricing
Banco de Chile could see a mid-November pricing for its debut MXP bond, but much depends on the regulatory process, says a banker on the deal. The borrower is expected to come with an up to 3-year tenor, after earlier filing a shelf to issue up to MXP 10bn of debt. While a size was not disclosed, S&P has given a AAA national scale rating to a proposed MXP2.5bn ($186m) issue. Banamex and JPMorgan are leading the transaction. Banco de Chile will be the third Chilean issuer to tap the Mexican domestic market following similar moves by Banco de Credito e Inversiones (BCI) and miner Molymet.
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Codelco Rides Rally
Chile’s Codelco has raised $1.15bn in new 2021 bonds, following a relief rally in the market Thursday on the back of initial progress to curb the euro zone debt crisis. The A1/A/A+ bonds priced at 98.573 with a 3.875% coupon to yield 4.05%, or UST+167bp, flat to revised guidance of 167bp. This came after 170bp-175bp initial guidance and 180bp-area whispers. Bankers away from the deal estimate the quasi-sovereign mining company offered a 15bp-17.5bp new issue concession, considering extra basis points required for a 1-year extension and a Wednesday closing price of UST+130bp-150bp on Coldelco’s existing 3.750% 2020s. “The new issue concession is generous by Codelco standards,” notes one banker away from the deal. Others suggest Codelco offered little to flat new issue concession, based on Thursday prices of UST+150bp on an interpolated basis. The new bonds were up plus 0.50 -0.80 points in the grey. “At UST+180bp it was fair, but further tightening to UST+ 167bp did not offer enough new issue concession,” notes one non-participating EM portfolio manager who sought a 20-25bp new issue concession, given larger premiums seen of late. Still, Codelco met its needs with a final book size of $3.2bn. Proceeds will be used for capex and refinancing debt, according to a Moody’s report, and are thought to cover prefunding needs for 2012. The company had been authorized to raise $2bn, and already had $850m in undrawn commitments from a bi-lateral loan, leaving it limited to issuing $1.15bn through the bond. The paper was placed in the US (65%), Europe (26%), LatAm (7%), with rest going to Asia and the Middle East. Buyers comprised fund managers (62%), private banks and financial institutions (17%), insurance companies (11%) and other types of investors (10%). HSBC and Mitsubishi-UFJ led the transaction. Codelco last came to market in 2010 when it raised $1bn in new 2020 bonds at 98.239 with a 3.750% coupon to yield 3.965%, or UST+130bp with Deutsche Bank and HSBC.