Brazilian sugar, ethanol and bioenergy producer Raizen is heard nearing the close of a $450m loan this week. The 3-year term loan pays Libor+150bp. Citi and HSBC are lead arrangers, with senior MLAs Bank of America, Credit Agricole and Bank of Tokyo. MLAs are Bank of China, Lloyds, Scotiabank, and Sumitomo Mitsui, and arrangers are Barclays, Bradesco, JPMorgan and Mega Bank. The facility will raise funds for refinancing existing debt. Raizen is a joint venture between Cosan and Royal Dutch Shell.
Category: Daily Brief
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Scotia Peru Lands Tier 2
In its international DCM debut, Scotiabank Peru has raised $400m in new 2027 NC10 Tier 2 bonds, while getting $2.3bn in demand from at least 170 accounts. The Bank of Nova Scotia subsidiary priced at par with a 4.50% coupon, to yield tight to 4.625%-area guidance, which followed 5%-area price thoughts. Investors reported pricing inside of Banco de Credito del Peru’s (Baa3/BBB) $350m 2027 Tier 2 bonds trading to yield 4.70%-4.80% and seen as a direct comp despite differences in rating. “Bottom line great transaction and it shows the high quality credit of Scotiabank and fundamentally strong market. If you’re a good credit you will have sufficient oversubscription to tighten pricing and in this case below your peers,” says a DCM banker away from the trade. The 15-year subordinated step-up bonds have the fixed coupon for 10 years and then revert to a floating rate. Proceeds will be used to strengthen the bank’s capital. Bank of America Merrill Lynch, Goldman Sachs and Scotia managed the sale. The deal represents Scotia Peru’s first dollar offering since a $175m diversified payment rights securitization done privately in 2010, according to Dealogic data.
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Brazilian Software Specialist Preps IPO
Linx, a Brazilian provider of software to the retail sector, is preparing to go public, according to regulatory documents. The IPO is to include primary shares as well as secondary shares sold by a private equity fund linked to Itau. The size and timing remain to be determined. Linx booked BRL56m ($27m) in Ebitda in 2011, up from BRL40m in 2010. It is seeking to raise funds for acquisitions and for working capital. BTG Pactual, Credit Suisse, Itau and Morgan Stanley have been hired to manage the sale. Linx offers both cloud-based and on-premises products for Brazilian retailers. It has been operating for 27 years and claims 29% of the market share. Other Brazilian IPOs in the pipeline include water utility Cedae, Vix Logistica and AutoBrasil, with all appearing to be waiting for January at the soonest.
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CMPC to Visit ECM, DCM
Empresas CMPC plans to sell bonds and raise equity capital in 2013, it says. The need comes after the Chilean pulp and paper company received final board approval to start the $2.1bn expansion of its Guaiba plant in Brazil. It expects to raise $500m in equity capital in the first half of 2013, followed by another $250m at a later point, and will seek shareholders’ approval January 24. It will also look to sell $500m in bonds in the international or local markets. Also, it expects a $1.2bn 10-year loan from BNDES and will look to shed some non-core assets, such as a 7.7% it holds in financial services firm Bicecorp.
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EFE Brings Size Back to Chilean Market
EFE has issued UF7.8m ($373m) in domestic bonds, giving the Chilean local market its largest sale in at least three years. The state railway company priced the 2037 bullet at 100.13 with a 3.70% coupon to yield 3.79%, or the BTU30 bond plus 91bp. The issuance saw 2.2x demand. Banchile-Citi managed the transaction, rated AAA on a national scale and guaranteed by the state. EFE last issued in the domestic bond market in 2006. Thursday’s sale was the largest domestic transaction in USD-equivalent terms since a $472m-equivalent deal from Transelec in 2006, though in purely UF terms it is only the largest since a UF10m sale from CMPC in 2009, according to Dealogic data.
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Emgesa Powers toward Local Issue
Emgesa is planning to issue up to COP300bn ($166m) in Colombia’s domestic market on December 12, with the ability to upsize to COP500bn, it says. The generation company’s bonds are expected with a maturity between 10 and 15 years, and either inflation-linked or fixed-rate. The funds will be used for refinancing intercompany debt and financing for the El Quimbo hydroelectric power project. The issuance is rated AAA on a national scale.
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Equatorial Due to Price Share Sale
Brazil’s Equatorial Energia was expected to emerge with a price for its equity follow-on by this morning, targeting a transaction of more than $600m. Books were heard to be more than covered Thursday. The energy holdco is offering 66m primary shares. This would indicate a BRL1.28bn ($604m) deal, assuming a 15% greenshoe is used, based on Thursday’s BRL16.80 closing price. A 20% hot issue, comprised of secondary shares owned by controller Vinci Partners, is also possible. About 70% of the proceeds are marked for capitalizing Centrais Eletricas do Para (Celpa), of which Equatorial bought control in September, with the remainder for acquisitions and working capital. The sale should take Equatorial’s free float to 52.6%, up from 24.2%. Bradesco, BTG Pactual, Goldman Sachs and Itau are managing the transaction. Equatorial agreed to buy 61.37% of heavily-indebted Celpa from Grupo Rede for BRL1.00, and is considering teaming up with CPFL Energia to buy all of Rede.
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Gruma Moves to Block Chico Pardo
Gruma plans to use its right of first refusal to purchase a 23% stake of itself owned by Archer Daniels Midland (ADM) that the US agriculture operator had agreed to sell to ASUR chairman Fernando Chico Pardo, Gruma says. The exact pricing and timing remain unclear, but the move is approved by the Mexican tortilla maker’s board and Gruma is readying financing. In a report, UBS sees the 23% stake fetching at least $380m, and, when stakes in additional subsidiaries are included, the deal could reach $600m. Assuming the raising of $600m in debt to pay for the deal, the likely resulting 3.3x net debt/Ebitda would be “not exorbitant, it does take away some of the flexibility the balance sheet had recently gained,” UBS says. “Although the news reduced the possibility of the company delisting, it could add significant amount of debt only to buy its own shares, rather than for additional investments,” Monex says in a report, calling the move “negative.” ADM had agreed in October to sell the Gruma shares to Chico Pardo, as the American group concentrates on other areas. Bank of America Merrill Lynch is advising ADM.
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Hites Taps Private Placement
Chilen retailer Hites has issued a UF1m ($48m), 2017 6.2% bond in a private placement, according to sources following the sale. The proceeds will be used for investment and to prepay debt. Celfin managed the sale, rated BBB+/BBB on a national scale.
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Mexican Pepsi Bottler to Sell Shares
Grupo Embotelladoras Unidas, a Mexican Pepsi bottler that is changing its name to Cultiba, has filed for an equity offering. The issuer plans to sell primary and secondary shares in Mexican and global tranches, and plans to set a price range for the sale, according to regulatory documents, with its outstanding shares seeing low trading levels. The exact size and timing remaining to be set. The issuer plans to sell primary and secondary shares in Mexican and global tranches, according to regulatory documents, with the size and timing remaining to be set. The issuer would need to raise at least $250m-equivalent to repay the bank loans it will take out with the proceeds, and also targets additional capital for investments. The bottler has a $125m loan due 2022 with Rabobank, costing it Libor+225bp, and an MXP1.61bn ($126m) 2022 loan with Banorte at TIIE+160bp. Bank of America Merrill Lynch, Banorte-Ixe, BBVA Bancomer, Credit Suisse, Inbursa and JPMorgan are managing. The company booked $2.17bn-equivalent in Ebitda during the first nine months of 2012. Unidas is in the process of changing its name to Organizacion Cultiba, and will trade under the symbol CULTIBA.