Grupo Mexico’s Mexico Generadora de Energia (MGE), an electric power generation project supporting mining operations, is preparing a $564.2m 2032 bond, according to Moody’s, which assigns a Baa2 rating to the deal. MGE is heard to be starting a roadshow today with expected visits to US and Latin American accounts through November 28. A 144A/RegS senior secured transaction with a 13-year average life is expected to follow. The 500-megawatt gas-fired electrical power facility has a 20-year power purchase agreement to supply Grupo Mexico’s Mexicana de Cobre and Buenavista del Cobre mines. The project is being built in two phases, which are 88% and 51% complete, respectively. The bonds come with collateral of first priority security on all assets, collection rights under contracts, and equity interests of the issuer. Bank of America Merrill Lynch, HSBC and Morgan Stanley are joint bookrunners on the deal, with Morgan Stanley as sole structuring agent.
Category: Bonds
Itau Chile Plans Domestic Bond
Itau Chile will look to issue up to UF1m ($47m), it says, and can choose among 2023 and 2024 maturities. The bank could also upsize the deal, expected Thursday, to UF2m, as it has a total UF5m program and has already issued UF3m, says a person familiar with its plans. It will self-lead the deal, rated AA minus/AA on a national scale. In September, Itau issued UF1m, pricing a 14-year bond at 99.15 with a 3.75% coupon to yield 3.83%, or the BCU20 benchmark plus 120bp.
Kuo Looks to Take out USD Notes
Mexico’s Grupo Kuo has launched a tender offer for any and all of its $250m in 9.75% 2017 bonds, it says. The holdco with activities in the consumer goods, chemical and automotive industries is offering holders $1,053.75 cash per $1,000 principal before the November 30 early deadline, and $1,023.75 per $1,000 after, through the December 14 final deadline. The offer is contingent on obtaining financing. Credit Suisse is managing.
Posadas Seeks to Check in Near 8%
Grupo Posadas is heard looking for a yield of 8.25%-area for a new 2017NC3 senior unsecured bond, according to sources familiar with the sale, with pricing expected the week of November 26. The issuer is expected to raise $225m, subject to the completion of a tender for Posadas’s 2015 bonds. The Mexican hotel operator is offering holders $1,060 per $1,000 principal for the old notes through November 23, and $1,045 per $1,000 after, through the November 30 final deadline. As of Tuesday, holders of approximately $60.5m of the notes, or 32.6%, had accepted. Bank of America Merrill Lynch, Deutsche Bank, JPMorgan and Santander are managing the sale, expected with B2/B/B+ ratings.
Rede Perp Holders Oppose Sale Plan
A group of investors representing more than 25% of Grupo Rede’s perpetual bonds have formed a group to oppose the process by which Brazil’s government is selling the troubled company’s assets. The holders claim that the government’s approach to selling the assets – exclusive negotiations with Equatorial Energia – diminishes the value received for them. “It is widely known that there are other highly qualified investors who are interested in the Rede assets. But these investors are not being given the chance to compete, or even the assurance that they will have that chance,” the group says in a statement. Brazilians including Energisa and Copel are among those who have publicly expressed interest, according to Brazilian news reports in recent months. Equatorial took control of Rede’s Celpa unit earlier this year under a similarly exclusive process, the group notes. The group claims that this type of action by the government will threaten international investment going forward, and that it “is considering its legal remedies, including acceleration of the notes.” Rede had announced plans to enter negotiations with holders earlier this year, until federal regulators intervened in the company. It is currently negotiating the sale of its operating companies, following the sale of Celpa. Rede issued $575m of the 11.25% perpetual bonds in 2007.
Road Operator Waits on Debenture
Brazilian road operator Triangulo do Sol Auto-Estradas has decided to wait until early next year to issue domestic bonds, according to the CVM. The issuer had been marketing the deal, targeting BRL620m ($301m). The plan was to have a tranche paying the DI plus up to 3.0%, and another inflation-linked tranche paying up to 7.5%. Proceeds are for repaying existing debt. BTG Pactual, Bradesco, Itau and Santander are managing the sale. After a flurry of local issuance, featuring credits including Eletropaulo, Taesa and CCR AutoBan, Brazilian local issuers appear to have applied the brakes. An expected BRL2bn sale from Eletrobras – an issuer also weighed down by recent electric tariff changes – is also said to be pushed into 2013.
Bancomext Readies Domestic Bonds
Mexico’s Banco Nacional de Comercio Exterior (Bancomext) is preparing to raise up to MXP2bn ($160m) in the domestic market, according to a selling memo. The Mexican state-owned bank is planning to price the 10-year fixed rate bonds on November 21. Banamex and HSBC are managing the deal, rated AAA on a national scale. The development bank last priced MXP1.5bn in 2022 bonds at 5.75%, or Mbonos+49bp in July.
Chilean Taps Local Debt
Chile’s Eurocapital has issued UF1m ($47m) in domestic bonds, pricing a 3.5-year bullet at 97.99, with a 4.80% coupon to yield 5.50%, or 285bp over government bonds. The financial services firm is raising funds for refinancing liabilities and general business purposes. The issuance is rated A minus/A minus on a national scale and led by Banco Bice. Eurocapital is the largest non-banking factoring company in Chile.
Costa Rica Aims DCM Return
Costa Rica is heard aiming for a yield of low to mid 4%-area for a new benchmark 10-year bond, according to a people familiar with the sale. With pricing expected as soon as today, the sovereign is considering a $750m-$1bn size for its first international bond transaction since 2004. Citi and Deutsche Bank are managing the transaction. The Baa3/BB+/BB+ issuer plans to use proceeds to address existing debt, including a $250m bond coming due in 2013. The country’s congress has authorized the government to issue $4bn in bonds over a 10-year period.
DCM Banker Leaves CS
Michael Schoen has left Credit Suisse, where he was head of LatAm debt capital markets, according to sources familiar with the matter. The bank has not indicated a replacement. Schoen had been with the bank since 2000, and was previously at DLJ, Lehman Brothers and JPMorgan. A bank spokesman declines to comment on the move.