Chile’s AES Gener has launched a tender offer for its $400m in outstanding 7.5% 2014 USD bonds with the intention of also launching a new 2021. The electricity provider is offering 5.25% 2021s or cash to holders of the 2014s. Investors who opt for new bonds will receive $1,000 in 2021s plus $150 in cash per $1,000 principal of existing bonds if tendered prior to July 27. Thereafter, they will receive new bonds plus $110 in cash as long as they tender before the final deadline of August 10. Holders choosing cash will get $1,130 per $1,000, and have only until July 27. Gener also plans to sell new 2021s to the market, and is separately tendering for its local 8.0% 2019 bonds in a domestic offer. Fitch has put an up to $475m size on the new issue after rating it BBB minus last week. The offer is contingent upon a minimum $200m overall acceptance to the USD tender, as well as Gener successfully issuing enough new 2021s to the market to cover costs associated with the cash portion of the USD bond tender and the local bond ender. Citi and Deutsche Bank are acting as dealer managers.
Category: Chile
Chile Grabs $564m from Water Equity Sale
The Chilean government’s Corporacion de Fomento de la Produccion (Corfo) has raised CLP260.64trn ($564m) from the sale of nearly all of its positions in water utilities Essbio and Essval. In a public follow-on, Corfo sold 3.655trn shares of Esval at CLP0.03 each and 10.17bn Essbio shares at CLP15.18 each, matching the floor prices set earlier last week. It offloaded 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with budgetary needs created by last year’s earthquake. Last month, for instance, the government sold $879m of Aguas Andinas. Corfo is set to keep a 5.0% position in each of Esval and Essbio, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, BAML and IM Trust managed the transaction, the same trio that handled Aguas Andinas. The offering also gives much more liquidity to each company – previously Essbio had a 5.4% free float and Esval less than 1%. Esval shares closed Friday at CLP0.03 Friday and Essbio at CLP15.18. Esval is the second-largest water utility in Chile, and Essbio the third-largest, both providing service in the central part of the country.
Enap Appoints New CEO
Rodrigo Azocar Hidalgo, the CEO of Chilean national oil company, Empresa Nacional del Petrolio (Enap), is stepping down and will be replaced by Ricardo Cruzat Ochagavia at the end of July. Cruzat was CEO of Transnet from 2008 to 2011. In June, the state-owned company was heard seeking a $500m loan via 3 and 5 year tenors.
Celulosa Arauco Shuffles Leadership
Celulosa Arauco has named Cristian Infante as CEO. He was previously corporate management and development director, and the top job will be his fourth at the Chilean pulp and paper producer since joining in 1996. Infante replaces Matias Domeyko, who moves to the newly created role of executive vice president, responsible for areas including Arauco’s strategic planning and international expansion. Domeyko had been CEO since 2005, and had previously been CFO.
Chile Holds Rates Steady
Chile’s central bank held its rate steady at 5.25% Thursday. The decision is the first pause for the bank in 6 months, having raised its rate at every meeting since January, with 475bp in cumulative hikes this cycle, according to Goldman Sachs. The shop still expects to see the rate reach as high as 6.00% by the end of the year. RBS cites favorable inflation data in June and ongoing concerns about weaker domestic demand in the second half of the year as motives for the pause.
Chile Set for Water Sale
Chile’s Corporacion de Fomento de la Produccion (Corfo) is scheduled to auction and price today shares in water utilities Essbio and Essval, a follow-on transaction that could raise as much as $1bn equivalent. Following the $979m sale last month of nearly all of its stake in water utility Aguas Andinas, the government entity is now ready to offload 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with budgetary needs created by last year’s earthquake. Corfo plans to sell 3.65trn of Esval shares and 10.2bn of Essbio shares. With the respective floor prices set at CLP0.03 and CLP15.18, the total sale would raise a minimum CLP264.3bn ($571.3m). However, the relative illiquidity of the two companies’ shares – Essbio has a 5.4% free float and Esval less than 1% – makes estimating the final price and size difficult. In fact, bankers expect a deal under $1bn equivalent. Corfo is set to keep a 5.0% position in each company, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, BAML and IM Trust are leads, the same trio that handled Aguas Andinas.
Chile Expected to Pause Rate Hikes
Chile’s central bank is widely expected to keep its rate steady at 5.25% today. Goldman Sachs, meanwhile, also sees the central bank pausing now that it is no longer expected to miss its inflation target for 2011 despite an increase in fuel-energy prices. Nomura sees the rate reaching 5.50% in the next 3 months.
Chile’s BCI Taps Mexican Market
Chile’s Banco de Credito e Inversiones (BCI) has issued MXP2bn ($170m) through a 5-year floater, becoming the second-ever Chilean borrower to tap the Mexican market. This follows Chilean miner Molymet, which has also sold bonds to Mexican investors. The deal priced at TIIE+40bp and was 1.23x oversubscribed, says a banker familiar with the transaction. The bonds were bought by a mix of private banks, mutual funds, investment funds, insurance funds and bank treasuries. Banco de Credito, rated AAA on a national scale was brought to market by HSBC with proceeds going towards general corporate purposes. BCI follows Chilean mining company Molymet, which has mining operations in Mexico and has done three MXP bond issuances. The last was in April, for MXP 1.5bn in 1.5-year bonds priced at TIIE +55bp. BCI tried to go outside Chile for funds for the first time in September, when plans for a 5-year USD were derailed by pricing concerns and instead it elected to raise 10-year funds locally.
Metminco Options Chilean Copper Project
Metminco, an Australian mining company, has entered into an option agreement to acquire the La Piedra copper and molybdenum project for $30.5m in Chile. Under the terms of agreement, the company has agreed to pay $350,000 on signing the agreement, $350,000 per annum in advance for two years to June 30, 2013, $1m on or before June 30, 2014, and $28m in cash, or $14m in cash and $14m in shares on or before June 30, 2015. The company has an option to terminate the agreement at any time before June 30, 2015.
Agrosuper Eyes Local Debt
Chilean food products company Agrosuper is indicating that it may raise up to $400m equivalent in the local bond markets during 2H. This comes after it established a program that allows it to sell up to UF8.5m ($403m) in 10 or 30-year bonds. Proceeds would be used to repay debt and for expansion. It has not yet indicated whether banks have been mandated, and finance officials could not be reached for comment. Agrosuper is actively looking for capital in 2011 as it ramps up export capacity, and is also planning an IPO this year through Banchile and LarrainVial. Agrosuper specializes in ham, poultry and salmon, and has operations in Italy, China, Japan, Mexico and South Africa.