Colombian food company Nutresa is now fully capitalized for this year after its recent COP522.5bn ($299m) equity follow-on, but could come to the markets again once it finds other acquisition targets, the company’s CFO Ana Maria Giraldo tells LatinFinance. Giraldo points out that with a net-debt-to-Ebitda ratio of just 1x, Nutresa’s leverage is still low. “We have low debt levels and this allows us to look at acquisitions,” she says. The company is looking to spend anywhere between $500m-$600m on its next target and the recent share issue has helped prepare the ground for any potential purchases. Target countries and regions are Peru, Central America, the Caribbean and the US, and Nutresa is now focusing its efforts on the cold cut sector after having bought US biscuit maker Lil’ Dutch Maid in 2010 and ice-cream company Helados Bon in the Dominican Republic this year. Depending on the size of the acquisition, the company may try its luck with a level 3 ADR, Giraldo says. Though Giraldo doesn’t discount international bond issues, she says there are more cost effective sources in the local markets and through bi-lateral loans with domestic banks which are still liquid. “Banks are offering very competitive financing,” she adds. Raising capital in other LatAm bond markets is also a possibility. Indeed, Nutresa was one of the first companies to tap this type of funding source when in 2009 it placed $40m equivalent of 10-year notes among Peruvian institutional investors, paying Libor+1.80%. It also raised local financing in Costa Rica after buying Galletas Pozuelo in 2006, and took out an $85m bi-lateral loan with US boutique Stephens when it acquired Lil’ Dutch Maid.
Category: Bonds
Pemex Plots Local Jumbo Bond
Pemex is preparing a transaction of up to MXP15bn ($1.22bn) for the domestic bond market. The state-owned oil producer plans a TIIE-based 7-year tranche, a 10-year fixed-rate portion and a 15-year piece denominated in inflation-linked UDIs. Proceeds are marked for investments and repaying existing debt. Banamex, BBVA Bancomer and HSBC are managing the deal, rated AAA on a national scale. Though timing depends on regulatory progress and market conditions, bankers say the deal could come as soon as the first week of September. Pemex placed MXP10bn in 5-year bonds locally earlier this year.
Brazil to Create Blue-Chip Credit Reference
Brazil’s central bank plans to start publishing in September a new benchmark interest rate to be granted to low-risk clients, according to remarks made to the press by the central bank head Alexandre Tombini. The move is aimed at increasing transparency and conditions for competiveness in the banking sector. The new indicator will be published first as part of the central bank’s financial stability report in mid-September and would be similar to that of the prime rate used in other countries. The central bank currently publishes average interest rates charged by banks but does not distinguish them by credit risk.
Cofide Selects Banks on External Bond
Peru’s Cofide has mandated Deutsche Bank and JPMorgan to issue up to $500m in 10-year bonds. The development bank plans to sell the paper in the latter part of the year, but may issue earlier depending on how the Humala administration’s economic policies evolve. This would be the borrower’s debut offering in the international capital markets. Plans for a foreign debt issue have been on the table since last year when the borrower was expected to raise $200m-$300m through a 10-year to lend for infrastructure projects. Other funding options under consideration were local debt issues and a foray into the Japanese market. In 2010, Cofide closed an amendment and restatement of a $160m 3-year loan coming with pricing at 125bp over Libor, but with a smaller size than the $185m it had originally sought after European banks were constrained by rising funding costs.
EM Bond Funds See Outflows
EM bond funds reversed gains from last week and shed $607m for the week ending August 10, according to fund data company EPFR Global. The funds’ performance showed a loss of 2.6% for the week ending August 11, according to Lipper, but is still up 3.9% ytd. Meanwhile, global-income funds inched 0.6%% lower for the week, to yield 4.5% growth ytd. International income funds also slipped 0.8%, bringing the ytd return to 6.65%.
Gran Colombia Prints Silver-Linked Notes
Gold producer Gran Colombia Gold has placed $80m of 7-year silver-linked notes at par with a 5.0% interest rate. Investors will receive on a pro-rata basis either the $1,000 principal amount per note or the US dollar equivalent to about 66.7 ounces of silver per note, whichever is greater. The company says it is hedged against silver prices as it produces the metal as a by-product at its gold mining operations and it also has developed significant silver resources at its Marmato project in Colombia. Proceeds will be used to develop the Marmato project as well as fund social programs and the relocation of the town of the same name. The deal was led by GMP Securities with RBC Dominion Securities, Fraser Mackenzie, Raymond James and TD Securities also participating. Gran Colombia is a Canada-based gold and silver mining company with operations in Colombia.
Lindley Heard Mandating for Foreign Foray
Peru’s Corporacion Lindley, a non-alcoholic beverages company, is preparing an international bond with Citi and JPMorgan, bankers say. The Lima-based company produces bottles, and distributes Inca Kola among other carbonated and non-carbonated drinks such as fruit juices, isotonic beverages, energy drinks and mineral water. Lindley has strategic alliances with The Coca-Cola Company. This would be the issuer’s debut bond offering abroad.
AES Gener Hits 60% in Tender
Chilean utility AES Gener has received acceptance from 63.2% of holders of its 2014 bonds targeted in an exchange offer that expired Thursday. Holders of $151m in the 7.50% 2014 bonds agreed to sell the bonds back for cash, and holders of $102m agreed to exchange the bonds for new 5.25% 2021 bonds. In the offer launched July 16, creditors were offered new bonds plus $150 in cash per $1,000 principal of existing bonds if they had tendered prior to July 27, and new bonds plus $110 thereafter. Investors choosing cash got $1,130 per $1,000, and only had until July 27. AES Gener also sold $400m of the 10-year notes at a 5.375% yield. Close to $300m of that took the form of new money. Citi and Deutsche Bank acted as dealer managers and led the new bond sale.
Brookfield Closes Local Debenture
Brookfield Incorporacoes has finalized its BRL300m ($191m) bond sale in Brazil’s domestic market. A BRL77m 2015 tranche pays the DI+1.55%, coming in under a DI+1.6% ceiling, and amortizes equally in years 3 and 4. A BRL223m 2016 piece pays the DI+1.75%, equaling the maximum set prior to bookbuilding, and amortizes equally in years 4 and 5. Both feature a 1-year grace period. BTG Pactual and HSBC are managing the sale, done under the rule 476 restricted format. Brookfield is rated A3/A+ on a national scale.
Banacol Sounds Accounts on Debut Issue
Banacol Group, a fruit producer with operations in Colombia and Costa Rica, is sounding out investors in New York about plans to issue bonds in the international capital markets. New York accounts are being pitched a potential bond in the $200-$300m range as the banana and pineapple producer looks to improve its maturity profile by paying off bank debt. In June 2010 the company closed a $32.5m 3-year secured export facility to finance fruit exports to Germany. Banacol is the largest producer and second largest exporter of bananas from Colombia, and also produces and exports pineapples from Costa Rica. This would the borrower’s debut offering. Citi is managing investor meetings.