Pemex says it has selected Abengoa Mexico and Abener Energia to build a $461m cogeneration plant in Tabasco that is expected to generate 300MW of electricity and 500-800 tons of steam per hour. The winners of the tender will operate the plant for a 20-year concession period, during which time total sales are expected to amount to almost $2.2bn. Banobras has approved financing for the project.
Category: Daily Brief
Posted inDaily Brief
Comerci Reaches Deal with Domestic Creditors
Controladora Comercial Mexicana has reached a debt restructuring agreement with domestic bondholders. It will exchange 5 series of its existing bonds on a 1-for-1 basis with new 7-year floating-rate notes paying interest at the TIIE rate. The new debt will be issued in “as soon as possible,” the retailer says, without providing the total value of the new bonds. While seen as a positive step by the markets, the transaction represents only a small piece of the $1bn-$2bn in liabilities Comerci is seeking to restructure, after defaulting last year when it racked up more than $2bn in derivative losses. It says it continues to negotiate with other groups involved in the restructuring process, which includes foreign creditors and derivative counterparties.
Posted inDaily Brief
Brasil Foods Shifts Funds to Sadia
Brasil Foods plans to transfer BRL3.5bn to its Sadia unit to use for working capital and to repay debt, it says. The meatpacker, created this year through the merger of rivals Perdigao and Sadia, raised BRL5.29bn in a July follow on offer. Some BRL950m of the BRL3.5bn has already been transferred, with the remainder to come by the end of the year. Sadia will use a portion of the funds to repay obligations tied to FX derivatives, which forced the company into the merger with Perdigao.
Posted inDaily Brief
Aluar Plans More USD Bonds
Argentine aluminum producer Aluar Aluminio Argentino plans to issue $50m in 2014 bonds, part of a $100m domestic market foray approved in August. Proceeds will help fund the company’s capital expansion plan, according to a Moody’s report assigning a B2 global and Aa3 national-scale rating. The agency highlights Aluar’s improving liquidity profile, following the recent repayment of $170m in debt using resources from a $241m equity capital subscription in July. Aluar sold $50m in 2014 bonds at Libor plus 300bp in June. Citi and SBS managed the transaction, the first from a $300m shelf.
Posted inDaily Brief
Chilean Bank Places Local Bond
Chile’s Banco del Estado has sold $76m equivalent in domestic inflation-linked bonds. The bank priced UF2m ($76m) in 2029 bonds at 97.38 with a 4.00% coupon to yield 4.20%, or 80bp above Chilean government bonds. Banco del Estado’s own brokerage unit coordinated the sale, rated AAA on a national scale. The issue comes from a UF30m shelf, from which Estado sold UF5m in 3.5% 10-year bonds in June.
Posted inDaily Brief
PDG Follows Debt with New Equity
Brazil’s PDG realty plans to raise BRL750m-BRL850m through a primary share offering, as it makes use of improving market sentiment to raise funds for new projects. The developer plans to offer 56m shares, and arrives at the total range based on Monday’s close of BRL27.70 and considering a September 9 one-for-two share split. The lead bank may also exercise a 15% greenshoe. Investor presentations and bookbuilding are expected to begin September 21, with pricing likely October 1, according to the offering prospectus. UBS will manage the transaction, alongside Itau and Goldman Sachs. PDG shares closed Tuesday at BRL25.49. It is also preparing to raise up to BRL300m through the sale of 2014 debentures.
Posted inDaily Brief
JPMorgan Tops Fees League
A flurry of summer DCM and ECM underwriting has rocketed JPMorgan to the top of the investment bank fee charts for the year to date, Dealogic data shows. The US shop has bagged $100.5m in revenue in the year to August 31, or 15.2% of a battered regional fee pool, which includes commissions from M&A, ECM, DCM and loans. JPMorgan was fifth in mid-June, when it had booked $28m in fees. In second place is Bradesco ($66.7m, 10.1%), which jumped 8 places due to senior participation in VisaNet’s $4.26bn June IPO, according to Dealogic. Third is fellow VisaNet equity global coordinator Santander, with $59.2m, or 8.9% of the market. The top 3 is completely different to this time last year, when Credit Suisse led with $233.6m (20.2% share), Citi was second ($117.5m, 10.2%) and Itau third ($110.8m, 9.6%). The LatAm fee pool has shrunk 43% to $662m in the year to mid-August, from $1.16bn in the corresponding period of 2008, Dealogic data shows. However, bankers are hoping that a post-Labor Day Brazil-led revival will drag regional investment banking revenue back up. Year-to-date, Brazil has accounted for 75% of M&A and 97% of ECM revenue, according to Dealogic. Colombia leads a more diversified DCM fee market, with 27% of the fees from entities based there, while Brazil yielded 24% of the total bonds, down from 30% in 2008. By market, Credit Suisse has bagged most M&A fees, at $29.0m, or 17.7% share, while JPMorgan leads DCM revenue, with $30.4m, or 17.9%. By volume so far this year, JPMorgan tops DCM and ECM rankings, while UBS heads M&A and Santander is well ahead for loans. (For full rankings, see www.latinfinance.com/LeagueTables2.aspx#Fees)
Posted inDaily Brief
AMX Has Leverage Room in Rating
Mexico-based wireless telecom America Movil has flexibility to boost leverage to 1.5x Ebitda and still keep its A minus rating, according to Fitch. The agency notes that total debt to Ebitda was 0.8x for the last 12 months ended June 30. “While potential acquisition opportunities for America Movil in Latin America seem to be currently limited, the company historically has made opportunistic acquisitions,” says Fitch. “If an opportunity were to arise in the medium term and lead America Movil’s pro forma total debt-to-Ebitda to rise as high as 1.5 times, Fitch believes the current rating could be maintained if the company demonstrated a clear path for leverage to return in the near term to approximately 1.0x,” it adds. America Movil has $4.2bn in senior unsecured debt, and an approximately $1bn UF-denominated Chilean notes program, including approximately $157m outstanding. Fitch notes high levels of liquidity, with a cash balances as of June 30 of approximately $1.50bn, undrawn committed facilities of $2.00bn for general corporate uses and $2.75bn for capex. America Movil has upcoming maturities for the next 3 years of $2.2bn and approximately 30% of net debt exposed to the US dollar, says the agency. Fitch estimates that approximately 15% of revenues are generated in US dollars, which covers the exposure.
Posted inDaily Brief
Emcali Can Lower Debt Through Sale: Fitch
Colombian utility Emcali, in which the Cali government is considering selling a stake, would be able to lower its debt level through a sale, says Fitch, which rates the company CCC with a stable outlook. BBVA is advising on a possible divestment. “Emcali’s strategy is to sell a portion of its telecommunications and electricity generation businesses, which could significantly change the company’s credit quality. Should this strategy succeed, the company is expected to use the proceeds from these sales to prepay a portion of its external debt, which will free up cash flow needed for infrastructure investments,” Fitch says. As of June 30, it adds, the company had a total adjusted debt of COP1.7trn, which is relatively high compared with the cash flow generation ability of the company. Emcali’s future cash flow generation is projected to cover debt service by about 10x, and government support will likely be required to meet financial obligations from time to time. The Colombian government covers a portion of Emcali’s debt, Fitch says.
Posted inDaily Brief
Brazil May Not Cut Rates
Brazil’s central bank is expected to leave the monetary policy rate at 8.75% following Wednesday’s meeting, having reduced it by 500bp since the start of the year. “Both the communique and the minutes of the July meeting widely telegraphed the board’s intention to interrupt the easing cycle, in our view,” says Bank of America-Merrill Lynch, adding that the bank “could more forcefully signal its intention to leave rates at the current level for an extended period of time.” Morgan Stanley, which also sees Brazil pausing, says that some board members of the bank considered not cutting at the July meeting.