Colombia’s Empresas Publicas de Medellin (EPM) is heard shortlisting HSBC, Citi, Merrill Lynch and JPMorgan to lead its planned dollar bond offering, according to DCM bankers following the transaction. The Colombian utility had issued in April an RFP for an issue likely of $500m in size and 10 years in tenor. Proceeds from the sale, expected to happen this year, would fund acquisitions as EPM plans to grow beyond Colombia’s borders. Compatriots Ecopetrol and ISA are also in the process of selecting bookrunners for cross-border issues.
Category: Bonds
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Panama Bonds Unmoved by Martinelli Win
Yields on Panama’s most liquid bonds, the 2015s and 2036, are virtually unchanged after opposition candidate Ricardo Martinelli won the elections by 60% to 37% on May 3, says Kathryn Rooney, senior EM strategist at Bulltick. The yield on the 2015s, which closed at 5.66% Friday, traded at 5.65% the day after the elections. The 2036s, Rooney says, did not move since Friday and stayed at 7.08%. “Although this news was not a market mover, we view the results in a very positive light for the continued positive trajectory in the Panamanian economy,” Rooney says. Martinelli, in Bulltick’s view, will prove to be a very market-friendly president and has declared his intentions to encourage further FDI, boost the passage of an FTA with the US, improve relations with the US, maintain fiscal accounts health, and decrease tax rates. “Given that we do not expect Martinelli to introduce any dramatic changes the Panama’s current policy framework, one that has served the country well, we view the outcome of yesterday’s election as credit neutral,” says JPMorgan.
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Mexico Secures IDB Swine Flu Aid
The IDB says it will approve $3bn in loans to Mexico this year to help it deal with the effects of the global economic crisis and swine flu emergency. “The swine flu emergency could worsen Mexico’s contraction, adding to the economic slowdown caused by decreases in remittances and exports,” the bank says. In addition to the $3bn in loans, the IDB says it will grant $1m to support efforts to detect new flu cases and launch a $5m regional initiative with the Pan American Health Organization to help Central American countries strengthen their early alert and diagnostic mechanisms to prevent the spread of the swine flu and other infectious diseases. In general, these public sector loans will have an amortization period ranging from 15-25 years and a grace period between 4-5 years with an interest rate over Libor or adjustable rates, a spokesman explained.
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Brazilian Port Operator Advances CP
Port administrator Santos Brasil has received regulatory approval for a BRL200m promissory note issue, according to the CVM. The 360-day paper pays the DI plus 4%. Itau is managing the sale, rated A-2 on a national scale. Proceeds will be mostly used to participate in auctions for new concessions within the next year in the southern, northern and northeastern regions of Brazil. Santos Brasil operates the port of Santos, in Sao Paulo state, and other ports in Brazil.
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Tractebel Advances BRL Bonds
Brazilian regulators have approved a BRL600m issue of 2011 debentures from Tractebel, according to the CVM website. The bonds rated AA on a national scale will pay 117% of the DI rate. The SUEZ unit will use the proceeds to pay down promissory notes coming due in May, as well as for other debt and working capital. It also is issuing BRL300m in 360-day promissory notes paying 125% of the DI rate. Banco Votorantim is running both transactions.
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Development Banks Pledge up to $90bn
Five multilateral development banks plan to increase support to Latin America by providing as much as $90bn during the next two years. The IDB, World Bank Group, CAF, Caribbean Development Bank and Cabei are working together to identify partnerships to increase their impact and protect gains of the last 5 years, the banks say. The IDB is expected to provide $29.5bn of the total, the World Bank $35.6bn, CAF $20bn, and Cabei $4.2bn and CBD $500m. The banks did not immediately provide further details.
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Panama, Uruguay Secure IDB Loans
The IDB has approved a $500m loan for Panama. The loan is expected to partially offset a shortfall in USD denominated lending to the productive sector. The shortfall is a result of the global financial crisis, the bank says. The loan is for a 5-year term, with a 3-year grace period, at an interest rate based on 6-month Libor plus 400 basis points. Meanwhile, the IDB has approved a $285m loan for Uruguay to streamline the tax system and improve central government efficiency. The loan is for a 20-year term, including a 5-year grace period, with a variable interest rate based on Libor.
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America Movil Nails Down CDB Funds
Major regional mobile telecom America Movil has secured a $1 billion 10-year loan from the China Development Bank (CDB). Pricing is in line with other ECA financing, at slightly above 100bp over Libor, highly competitive versus the volatile bank market. “We likely will have this line closed before end of the month,” America Movil’s CFO Carlos García Moreno tells LatinFinance. Proceeds will be used to finance purchases of equipment from China. Huawei is one of the suppliers. Telemar last month got a $300m loan from CDB. The 7-year facility pays Libor plus 250bp and features a 2-year grace period. The Brazilian telecom, also known as Oi, plans to use proceeds to finance its 2008-2009 investment activity in China with network equipment supplier Huawei.
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Colinversiones Gets CAF Cash
Colombian holding company Colinversiones has secured $65m in long-term funds from CAF to upgrade its Termoflores power generation plant. The company will boost capacity of the plant to 610MW from 441MW, CAF says. Colinversiones recently told LatinFinance it was negotiating a $130m 12-year loan with CAF and the IFC. The company recently funded itself with a $300m bridge from Bancolombia, but securing long-term financing to support investment is part of the investment plan. Colinversiones has interests in the energy, financial and other sectors.
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Colinversiones Preps Multilateral Credit
Colinversiones, the Colombian firm with interests in the energy, financial and other sectors, is negotiating a $130m 12-year loan with CAF and the IFC. The credit should be finalized this month or next, president Juan Guillermo Londono tells LatinFinance, declining to speculate on price. The company recently funded itself with a $300m bridge from Bancolombia, but securing long-term financing to support investment is part of the investment plan. Londono says multilateral rates are more attractive. Colombia’s Empresas Publicas de Medellin recently secured a $450m IDB facility at just 20bp over Libor on a 25-year term, with a 6-year grace period. Colinversiones is looking to fund expansion in the electricity generation sector, a focus that will see it divest holdings in non-core areas over the long term. “In the energy sector, there are favorable conditions for the entrance of new players,” says Londono. He adds that it is a diverse cash generating sector driven by an imbalance – about 1.8x – between demand for electric power and supply. “We are expanding first our current plants, and second designing and building new projects, as well as continuing to expand through acquisitions, including some international expansion in the medium-term,” says the official. Although there is interest, Londono says there are no immediate plans to tap Colombia’s liquid domestic bond market.