Mastellone Hermanos, owner of Argentina’s La Serenisima dairy brand, is extending for the third time the deadline on a $222.5m debt exchange offer to February 26 from February 12. The dairy producer known in the bond markets as Masher says it has received consent from holders of $171m so far, representing 76.9% of creditors. Mastellone wants to exchange up to $222.5m in bonds and bank debt maturing 2011-2013 for new 2015 notes paying Libor plus 2.5% (capped at 6% all-in) and 2018s paying 7.0% initially, stepping up to 9.0% in 50bp annual increments starting January 2012. The swap will not reduce net debt. Bank of America-Merrill Lynch, hired in August to evaluate financial alternatives, is managing the process. Mastellone launched the offer early December.
Category: Daily Brief
GEM Outflows Hit Peak
Outflows from GEM equity funds hit a 60-week high of $1.76bn in the week ended February 10, says EPFR Global, adding that LatAm equity funds also recorded net redemptions for the third straight week that left them in negative territory year-to-date for the first time since early Q108. However, Lipper data shows that for the week ended February 11, LatAm equity funds returned 4.95%, although still down year-to-date with a drop of 8.56%, the highest of all equity funds Lipper tracks. Meanwhile, EM equity funds were up 1.33% for the week and down 5.17% ytd, and global small and mid-cap funds gained 1.14% on the week and are off 3.39% ytd.
EM Bond Funds Enjoy Inflows
EM bond funds received almost $700m in the week ended February 10, their best week since November, according to EPFR Global. “The flows into EM bond funds still favored those funds investing in local currency debt, generally perceived as riskier, but their share of overall inflows continued to slide, dropping to 43% versus over 95% during the fourth week of January,” the shop says. Performance was also positive, according to Lipper, with EM debt funds up 0.19% on the week ended February 11 and 0.19% year-to-date. Global income funds fell 0.19% for the week and are up 0.52% ytd, while international income funds dropped 0.08% in the week and have also lost 0.13% ytd.
Panama on Upgrade Review
Moody’s has placed Panama’s Ba1 foreign currency government bond rating on review for possible upgrade, taking it closer to reaching investment grade, in response to the country’s significantly improved fiscal and debt positions over the past several years and of a structural upward shift in economic growth. Together with the Panama Canal expansion, intentions to undertake an ambitious infrastructure development program are likely to sustain growth rates in the next few years, says Moody’s. The new administration has announced plans to spend around $14bn over the next five years, or the equivalent of 7.0% of GDP annually, with the aim of further developing Panama’s role as a logistics hub and of diversifying the economy. Moody’s also highlights Panama’s ability to survive the global financial crisis. “Even though GDP growth declined sharply last year, it remained in positive territory at around 3%, according to preliminary estimates,” it says, adding that there was no significant deterioration in government debt metrics. The fiscal deficit came in at just 1.0% of GDP in 2009, well below the 2.5% of GDP limit established by the Fiscal Responsibility Law. S&P and Fitch also have Panama’s ratings just one notch under investment grade with positive outlooks.
Infrastructure Issuers Flock to Float in Brazil
Julio Simoes, a logistics operator, has filed for an IPO on the Bovespa to become the fourth infrastructure-related company to seek to raise shares in the past month. There are currently 6 initial offerings on file. Julio Simoes, a little known provider of services ranging from supply chain management, fleet outsourcing, public and private passenger transportation and cargo services, had Ebitda in 2009 of BRL240m, up from BRL200m in 2008. The company does not specify a target amount for the issue. Bradesco and Credit Suisse are leading. Julio Simoes joins a pipeline that includes OSX, the Eike Batista shipping company, Ecorodovias, the tollroad operator, and Mills, a heavy construction material provider in the general infrastructure space.
Cruzeiro Nips in for Debt Before Carnival
Banco Cruzeiro do Sul has raised $250m in new 2015 bonds, fitting the issue in before the Brazilian Carnival holiday amid continued volatility in the global markets. The Ba2 offering priced at 99.007 with a 8.500% coupon to yield 8.750%, in line with 8.750% area guidance. Bankers on the deal spot the demand at about $280m from more than 100 accounts. BCP and BTG Pactual managed the 144a/Reg S sale, marking a debut for the latter in this market. Cruzeiro sold $175m in 2012 bonds in September to yield 8.5%, also through BCP. A general decline in risk appetite has not deterred some Brazilian banks from issuing, with Banco Votorantim pulling off a $500m 3-year deal earlier this month. However, larger expected issuers heard wanting 10-years, such as Bradesco and Itau, appear to be waiting.
Vanguarda Throws in Bond Towel
Brazilian farmer Vanguarda do Brasil has opted not to continue with a dollar bond transaction in the international bond markets, according to an official familiar with the transaction. The soy and cotton grower was heard negotiating with a 3-4 investors into last week, following a roadshow that ended just before international volatility put a wrench in several issuers’ plans and brought new deals almost to a halt. Vanguarda had hoped to sell $200m in 2015 bonds in what would have been its debut dollar deal. Morgan Stanley was managing. It was aiming to pay an 11% handle on the B3/B minus transaction.
Cemex Paves Way to Local Issue
Cemex has filed for a 4-year MXP30bn domestic bond shelf, according to regulatory documents. The program allows for fixed and floating rate bonds at maturities up to 20 years. BBVA Bancomer is the manager named in the documents. A local certificados bursatiles offering is expected soon, as a part of the Mexican cement maker restructures its financial profile. It has already raised $2.27bn equivalent in dollar and euro bonds since agreeing to extend its bank debt early last year. In December, Cemex sold MXP4.1bn in bonds convertible into CPO shares.
Davivienda Sells Local Notes
Colombian financial institution Davivienda has sold COP500bn ($254m) in local ordinary bonds, double the amount it originally intended to issue, says finance vice president Marco Franco. He adds that demand for the bonds was COP1.18trn. The issue was done in 4 tranches. Davivienda placed COP97.00bn in 18-month bonds paying IBR plus 0.95%, COP86.00bn in 2-year bonds at DTF plus 0.95%, COP101.80bn in 3-year bonds at IBR plus 1.36% and COP215.00bn in 5-years at IPC plus 3.98%. Franco says Davivienda will return to the market with a 10-year subordinated issue of around COP250bn in about 2 weeks. He says this is part of a plan to issue COP1trn over time to bulk up working capital. Davivienda managed the sale itself.
Vale Contemplates Fosfertil Future
Vale is trying to decide whether to keep Fosfertil listed entity or take it private, says CFO Fabio Barbosa. “We’re analyzing our alternatives and will let the market know at the appropriate time,” he tells LatinFinance when asked about the company’s plans. With the exception of PT Inco in Indonesia, which bankers say has been kept public for practical reasons tied to local regulations, Vale has habitually taken all of its targets private. Itau analysts say it may make sense to keep Fosfertil a publicly traded entity that can finance itself and be used a platform for Vale’s growing fertilizer business. Last week, Vale acquired the remaining stake it did not own in Fosfertil, bringing ownership in the company to 100% of the common shares and 68% of the preferred shares, or 78% of the total capital. Vale says it is paying $1bn for Mosaic’s 25% stake in the company after having purchased stakes from Yara Brasil BPI, Heringer and Fertipar. The total value of Vale fertilizer acquisitions, done between January and last week, adds up to $5.6bn.