Mexico’s Banco Compartamos is set to raise MXP1.5bn ($112m) in the local markets today through the issuance of 2016 bonds, with guidance released at TIIE+80bp area. About two-thirds of the proceeds are destined for the repayment of debt, while the rest will be used for lending. Banamex, BBVA Bancomer and HSBC are leads on the transaction, rated AA on a national scale. Compartamos last visited the local bond market in October 2010 when it sold MXP1bn in 2015 bonds, paying TIIE+130bp.
Category: Daily Brief
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Siderar to Sell New Shares
Argentine steelmaker Siderar plans to raise ARP4.17bn ($993m) through the issuance of new shares. Siderar has called a November 10 shareholder meeting to vote on the plan. The issuer majority owned by Ternium does not indicate whether the deal would be through a public offering. Shares closed at ARP24.40 Tuesday.
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Quinenco to Tap Equity Market
Chile’s Quinenco is looking to raise CLP225bn ($477m) through an equity issuance. Shareholders are set to vote on the matter October 6. The holdco for Grupo Luksic assets has been in an acquisitive mode of late, agreeing to buy fuel distributor Terpel Chile from Empresas Copec at the beginning of the month for $320m equivalent. It also will exercise its rights in $1.2bn equity raise for Chilean shipper Vapores, of which Luksic companies form part of a block holding 41%. Shares closed at CLP1,308.50 Tuesday.
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Agrosuper Plots Local Bond
Chilean food products company Agrosuper plans to raise up to UF5m ($230m) in the country’s domestic bond markets. The issuance is still awaiting final regulatory approval, but a banker managing the sale says it is expected in the first half of October. The issuer will choose among the following options: an up to UF5m 3.4% 2018 inflation-linked bond, an up to CLP100bn 6.1% 2018 peso-denominated bond, an up to UF5m in 3.4% 2021 inflation-linked bonds and up to UF5m in 3.8% 2032 inflation-linked bonds. Proceeds are to be used to repay debt and for expansion. Banchile and Larrain Vial are managing the sale, rated AA minus on a national scale. Agrosuper is ramping up its export capacity, and was also – at least before volatility hurt the regional new equity issuance pipeline – in the early stages of planning an IPO, also through Banchile and LarrainVial.
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Anhanguera Readies Domestic Debt Issue
Just a day after announcing the BRL510m ($286m) acquisition of Uniban, Anhanguera Educacional Partipacoes says it plans to borrow BRL400m in the Brazilian domestic bond market. The secondary education company is looking to sell a 2018 bond paying the DI+1.95%, amortizing twice yearly beginning 2015. Itau is managing the sale, to be done under the Rule 476 restricted format. Previous local bond issuance and a December BRL734m equity follow-on have helped fill Anhanguera’s acquisition war chest thus far, But the Uniban purchase agreed this week – taking out one of the few big university players left – was larger than its typical sub-BRL100m buys and may require some replenishment of funds. The issuer also has a BRL200m bond maturity next year. S&P has placed Anhanguera’s BB global rating on negative watch until it can assess the implications of the Uniban buy. This comes less than a month after an upgrade to BB from BB minus.
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BNDES Approves BRL3bn Vivo Financing
Brazilian development bank BNDES has approved a BRL3bn ($1.7bn) loan for Telefonica’s Vivo. BNDES officials decline to specify the interest rate or tenor. The Brazilian unit of the Spanish telecom is set to use proceeds for infrastructure and technology development and research and development. Vivo is also set to invest BRL22m in social programs.
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CFE Gives Fixed-Rate Guidance
Mexico’s Comision Federal de Electricidad (CFE) is out with price talk of MBonos+125bp-135bp for the retap of its fixed rate 2020 bonds, according to market participants. The state-owned electricity provider is reopening for the second time a domestic floating rate 2014 and fixed-rate 2020 bonds, with pricing expected Wednesday. Price talk of TIIE +20-25bp emerged earlier in the week for the floating-rate portion. The total size of the transaction will be up to MXP7bn ($528m). CFE is raising the funds for general corporate purposes. Banamex, and BBVA Bancomer and ING are managing the sale, rated AAA on a national scale.
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Colombia Executes Jumbo TES Exchange
Colombia has completed an exchange of COP6.4trn ($3.46bn) in 5 series of domestic bonds for COP6.38trn in 3 series of longer-dated bonds. “This was the largest peso debt swap in Colombia’s history,” says Juan Manuel Quintero subdirector of internal financing at Colombia’s Ministry of Finance. The sovereign has issued COP2.15trn in 8.0% TES bonds due 2015 at a 6.0% yield, COP2.18trn in 11.25% 2018 notes at a 6.80% yield and a new COP2.04bn 7.50% 2026 bond to yield 7.56%. It turn the government has accepted COP6.4trn in orders from holders of 5 series of bonds due 2012-2014, of which there was COP39trn ($21.5bn) outstanding. Demand reached COP8.7trn.
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Cordiant Extends Funding for Brazilian Port Expansion
Emerging market fund Cordiant Capital has extended a $20m loan to Tecon Salvador, which will use the proceeds to help finance a $117.2m port expansion in the state of Bahia in northern Brazil. The port mainly handles the movement of exports such as petrochemicals, rubbers, tires, cellulose and automotive parts. The IFC acted as lead arranger on the loan.
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KOF Merger Maintains Consolidation Trend
Coca-Cola Femsa (KOF) and regional Mexican Coca-Cola bottler Cimsa have agreed to a share-swap merger valued at MXP11bn ($831m), in KOF’s latest cashless combination with a smaller peer. The move is part of a broader consolidation in the sector that is likely to continue, analysts say. Cimsa owners will get 75.4m new KOF shares, and KOF will assume MXP2.1bn in Cimsa debt. The shift from traditional cash buys to share exchanges has changed consolidation in the historically fragmented industry, says a Mexico City-based beverage analyst, pointing to the fact that KOF has a strong balance sheet and could have done a much larger deal. “Once you allow smaller bottlers to continue to participate in the growth of the system, consolidation is a lot more dynamic. That’s the fastest way for Coke Femsa to consolidate the sector,” he says. For smaller companies, he adds, such mergers are preferable to being acquired outright. A US-based analyst spots the “takeout multiple” of the transaction’s combined entity at about 10x enterprise value/Ebitda, compared to 9.6x for Femsa’s June MXP9.3bn acquisition of Grupo Tampico, and in line with the trend for this type of deal. Though KOF’s investors may prefer cash buys instead of transaction that potentially dilute share holdings, KOF’s choice may be the best way forward, says the analyst. More transactions could be on the way. KOF now has about 50% of the Coca-Cola bottling market in Mexico, with Arca capturing 30% and the rest going to independent bottlers. This market offers numerous opportunities for profitability and growth and the Cimsa deal was generally a “very positive transaction multiple for KOF,” says a second analyst. Further mergers could come as soon as in the next 6-12 months, he notes, with independent bottlers in the center and north of Mexico high on the list of potential partners. Family-owned Cimsa operates in the states of Morelos, Mexico, Guerrero and Michoacan. Deloitte Galaz, Yamazaki, Ruiz Urquiza acted as finan