Category: Chile

Petrobras may look to develop or acquire refinery capabilities in Chile as it pursues an integrated supply chain in the country, say Itau analysts. The company’s purchase last week of distribution assets in Chile adds a crucial part to its yet to be integrated business. Petrobras currently exports LPG, LNG, petrochemicals and lubricants to Chile, notes the shop. “The one supply chain node still missing, the refinery, will likely be the next step for Petrobras as it aims to establish an integrated business in the country,” says the shop. State-owned ENAP is currently Chile’s only refiner, note the analysts.

Santander Chile has hired JPMorgan to manage its 26m NYSE-listed ADRs. JPM has been aggressively chasing new clients for its DR business, looking to poach from competing depository receipt shops or sign on newcomers to the US markets, says William Kirst, head of the US bank’s LatAm DR business. JPM manages ADR programs for companies like Vale and Petrobras but says it is trying to grow its roster by focusing on Argentina, Chile, Colombia, Peru, Brazil and Mexico, says Kirst. It is particularly enthusiastic about names in homebuilding, commodities and Mexican infrastructure.

Chile’s Colbun has sold $201m equivalent in local bonds and closed a $400m 5-year syndicated loan. The electricity generator placed $80.5m equivalent in 2014 bonds denominated in the UF inflation-linked unit at 99.57 with a 3.80% coupon to yield 3.89%, and $121m equivalent in 2028 UF-denominated bonds at 95.90 with a 4.50% coupon to yield 4.89%. It will use proceeds from the sale to restructure debt and finance investment plans. Celfin managed the transaction. Separately, Colbun closed a $400m 5-year syndicated loan that will refinance an existing $320m 5-year loan. The facility launched June 27 pays Libor plus 235bp. Colbun, which faced drought and fuel shortages that affected its ability to meet covenants on the previous facility, paid lenders only 40bp for the old loan, closed in 2006. Leads ABN, BBVA, Citi, Itau and Santander brought in Rabobank, ING, BNP, Calyon, HSBC, Scotia, Bank of Tokyo-Mitsubishi, and JPMorgan for the refinancing.

Chilean metals processor Molymet has placed $201m equivalent in local bonds denominated in the UF inflation-linked unit. A $121m equivalent 2013 tranche priced at 98.33 with a 3.50% coupon to yield 3.89% and an $80m equivalent 2028 tranche priced at 92.56 with a 4.25% coupon to yield 4.85%. Proceeds from the A+ rated sale will be used to restructure debt and finance expansion. Larrain Vial managed the transaction. Molymet, with production facilities in Chile, Mexico, Belgium and Germany, is also preparing the sale of 10-year bonds in the Mexican market via Banamex, expected this month.

Chilean steel processor CAP has approved a $550m capital increase plan through an equity issue, the company says in a filing with the Chilean regulator. CAP expects to issue 149m units at a price to be determined by the board. The company will dedicate 10% of the issuance to an employee compensation plan. Last month, the company announced it was ramping up investment, with a $1.6bn program. CAP expects to raise production to 17m tons from 8m by 2012. Expansion will be financed with cash on hand and new debt.

Spanish renewable energy conglomerate Grupo Enhol plans to invest $1bn in the Parque Talinay wind farm in Chile. The 10,000-hectare facility, located in the city of Ovalle, will include 243 windmills and is expected to produce 500MW that will be added to the country’s central electrical system, Enhol says. The plant should be operating by 2011, Enhol adds. The company is also developing a hydro power plant in Peru.

Banco de Chile has issued $162m equivalent in bonds denominated in the UF inflation-indexed unit. The AAA rated 2013 notes priced at 94.11 with a 2.50% coupon to yield 3.75%. Proceeds will be used to restructure debt and finance the company’s loan growth plans. Banco de Chile’s Banchile unit managed the sale.

Chile’s Corpbanca has issued $125m-equivalent in subordinated bonds denominated in the UF inflation-linked unit. It priced UF3m (CLP61.53bn) in 2033 notes with a 4.60% coupon at 98.37 to yield 4.76%. Proceeds from the A+ rated issue will be used to restructure assets and debt and to finance the company’s loan growth plans. Corpbanca’s capital markets unit managed the sale.

The long awaited refinancing of a troubled $320m 5-year facility by Chilean energy company Colbun is heard moving along well following launch June 27. The company faced severe drought and shortages of fuel which crushed its revenue and led it to trip bank covenants on the 2006 facility. A new $400m 5-year amortizer at Libor plus 235bp – nearly six times wider than the 40bp at which the 2006 deal was launched – is being syndicated to existing lenders and heard well received, say bankers in the lead group. Out of the initial participating group, only a two or three have opted to leave the facility. Still, it is not expected to close for another few weeks, say bankers. The transaction is joint-led by ABN AMRO, BBVA, Citi, Itau and Santander. Other banks in the 2006 refinancing include BNP Paribas, BayernLB, Calyon, ING, JPMorgan, WestLB, Banc of America, HSBC, Intesa Sanpaolo, Mitsubishi, Monte dei Paschi, Rabobank and Scotia.

S&P has revised its outlook on the Chilean sugar and agribusiness producer Iansa (BB+) to negative from positive. “The action reflects the higher-than-expected deterioration in the company’s financial metrics as a result of weaker cash-flow generation levels and greater use of debt to finance increased working capital needs (related to the merger with Jugos Concentrados) and capital expenditures,” says the agency. Financial metrics are expected to remain weak as a consequence of lower profitability levels in the sugar business given a reduction in sugar volumes produced in the domestic market that present higher margins than imports, the agency says. “The negative outlook reflects the short to medium-term challenges of improving financial metrics in a context of increased working capital needs, relatively high capital expenditure levels, and still relatively weak cashflow generation levels,” adds S&P.