Grupo Financiero Inbursa, Corporacion Inmobiliaria Vesta, and Grupo Aeroportuario del Centro Norte (OMA) are set to press ahead with MXP-denominated equity follow-ons today, despite worsening market conditions, say people familiar with the deals. Corporacion Inmobiliaria Vesta is targeting more than MXP4bn ($309m) from its follow-on, which is set to comprise 120m primary shares and 44.5m secondary shares, assuming a 15% greenshoe. The transaction would raise MXP41bn if the deal is executed with a greenshoe at Monday’s MXP25.1 closing price. Credit Suisse and Santander are managing the deal. Inbursa plans to close books and set the price on an all-secondary sale of shares belonging to CaixaBank. It will sell 482m shares, assuming the greenshoe is filled, which would generate MXP13.2bn at Monday’s MXP27.09 closing price. Credit Suisse, Inbursa and UBS are global coordinators, with BTG Pactual bookrunner on the international portion, and Citi and BBVA on the Mexican sale. OMA’s follow-on is also an all-secondary transaction. The Aeroinvest subsidiary of construction firm ICA is selling 95m OMA shares, assuming a 15% greenshoe. The deal would raise MXP3.6bn at Monday’s MXP37.97 closing price. The company expects to sell 57m shares internationally and 38m to Mexican investors. Bank of America Merrill Lynch and BBVA are managing the sale, joined by Barclays and Morgan Stanley on the international tranche and Santander on the domestic.
Category: Equity
Mexico Targets 2014 MILA Membership
The Mexican Stock Exchange is targeting a 2014 inclusion into the Integrated Latin America Market (MILA), says Mexico Stock Exchange general director, Pedro Zorilla. “Mexico is serious about becoming a part of MILA and offers multiple asset classes and liquidity,” he says. Inclusion in the partnership is subject to legal adjustments and authorization of Mexican regulators – with approval expected as soon as this year, Zorilla says. MILA members – the Santiago Stock Exchange, Bolsa de Valores de Lima, and the Bolsa de Valores de Colombia – welcome Mexico’s inclusion. “If Mexico joins MILA it will add significant critical size. You have the Brazilian market as a big and liquid and respectable market and you will have MILA as an alternative. If you are an investor and look at LatAm you will have two clear alternatives to invest in,” says Juan Pablo Cordoba, CEO of the Colombian Stock Exchange. “Mexico is working on legal changes and we hope the process will be approved this year so we can start the process of integration next year,” adds Jose Antonio Martinez, CEO of the Santiago Stock exchange. Currently, MILA has 552 listed companies, with a stock market value of $703bn. All panelists spoke at the MILA Day in New York.
MILA to Add Fixed Income
The Integrated Latin American Market (MILA) expects to include fixed income trading from 2015, say stock exchange heads. Similarities across equity issuances in different markets made it easier for MILA to begin as a joint share trading platform, between Chile, Colombia and Peru. “The fixed income markets are much more complex,” says Juan Pablo Cordoba, CEO of the Colombian Stock Exchange. Jose Antonio Martinez, CEO of the Santiago Stock Exchange, notes that the fixed income markets are more local and more sophisticated. The countries will have to standardize their debt markets, he says. “It’s a matter of having enough capacity to deal with it all at the same time,” says Lima Stock Exchange CEO Francis Stenning. All spoke at the MILA Day in New York.
Chileans Move to Join Equity Pipeline
Latam Airlines and Compania Cervecerias Unidas (CCU) have both hired banks to mange upcoming equity follow-ons. The recent volatility has dampened the hopes of Brazilian issuers and IPOs, but bankers remained confident about the prospects of follow-ons from well-known issuers, particularly from the underrepresented Andean markets. Latam previously indicated a $1bn raise through the issue of 63.5m shares. The carrier formed from the merger of Lan and Tam has selected BTG Pactual and JPMorgan as international bookrunners, according to people familiar with the process. BTG’s Celfin is on the Chilean domestic portion, with perhaps another Chilean to be named later. The airline is said to be planning Chilean, US ADR and Brazilian BDR portions. The timing for the sale remains to be determined. Proceeds are destined for fleet enhancement. Separately, CCU has named the banks for its planned CLP340bn ($660m) equity capital raise, it says. The Chilean has hired JPMorgan, Citi, Deutsche Bank, and Goldman Sachs for the international portion. LarrainVial and BanChile are handling the local portion. The beverage company plans to issue 51m shares and timing remains to be determined. The new funds will allow it to finance growth, including increasing production. CCU plans to invest CLP1.35bn through 2020. This week, the MXP11.0bn Inbursa follow-on sale of secondary shares owned by CaixaBank is up next in the pipeline, joined by the MXP4.0bn OMA sale of secondary shares owned by ICA and a MXP4.4bn follow-on from Vesta. All three are scheduled for Tuesday. Beyond that, the market is waiting for others to launch – with follow-ons from Grana y Montero and Banorte being the most likely to move ahead, bankers say.
Debt, Equity Funds Continue Poor Performance
Fund performance continues to fall amid market volatility and international uncertainty, with LatAm equity funds falling 8.09% during the week ended June 20, according to Lipper. They are down 17.46% year-to-date. EM funds were down 4.62% during the week, to bring them to a year-to-date loss of 9.81%. Global small and mid-cap funds were down 2.80% on the week, and have earned 7.04% year-to-date. EM dedicated bond funds as an asset class was down 2.98% during the week ended June 20, for a year-to-date loss of 7.35%. Global income funds were down 1.89% during the week, and are down 3.55% year-to-date. International income funds were down 2.30% during the week, for a 5.05% loss year-to-date.
Vapores Moves Forward with Equity Raise
Chilean shipping and port operator Sudamericana de Vapores has filed for a $478m equity transaction, according to the SVS. The Grupo Luksic-controlled is looking to issue up to 6.45bn common shares, following shareholder approval earlier this year. It is raising funds to purchase new vessels and prepay a $260m loan from American Family Life Assurance Company. It also planned to use a loan of up to $140m with Bladex to prepay the debt. The timing remains to be set.
OHL Prices Follow-on Against Rough Backdrop
OHL Mexico has priced a MXP6.99bn ($524m) equity follow-on, landing at a slight discount to a share price that had been hit hard in the last few days along with the rest of the Bolsa. The Mexican unit of the Spanish concession operator is selling 241.2m primary shares, assuming a 15% greenshoe, at MXP29.00 each, according to a person following the sale. The price compared to Thursday’s MXP29.84 closing price. The shares had fallen 13.5% what in June, versus a 9.8% drop in the Mexican Bolsa during that time. About 55% of the sale went to international buyers. “This is a quality portfolio of assets, and there is still much opportunity in Mexico in the infrastructure space,” says an analyst following OHL Mexico. Expectations are a bit more cautious than earlier in the year, he says, but the global volatility has not yet done much damage Mexico’s positive growth outlook. The transaction was expected to represent about 13.9% of the unit and result in a 36% free-float. The issuer plans to use about half of the proceeds to make investments in projects and half to repay debt. BBVA and UBS were global coordinators, joined by Goldman Sachs and JPMorgan on the international portion and Santander on the local side. The deal should give some confidence to the other follow-ons in the region’s new issue pipeline. Next up is the MXP11.0bn Inbursa follow-on sale of secondary shares owned by CaixaBank, the MXP4.0bn OMA sale of secondary shares owned by ICA and a MXP4.4bn follow-on from Vesta. All three are scheduled for Tuesday.
Peruvian Lender Gets IFC Funds, Plans Bond
The IFC has made a $50m equity investment in BanBif, which the Peruvian commercial bank hopes to follow with an international bond this year, it says. BanBif would like to raise $200m in the cross-border bond market in the second half of the year, in addition to domestic market debt. The IFC’s investment makes the multilateral a 12.66% shareholder in BanBif, and will help BanBif serve small and medium enterprises. It follows a $18m 10-year subordinated loan to BanBif. In 2009, the bank also received a 2020, $30m loan from the IMF and FMO. BanBif notes that it has received more than $300m in medium and long term loans from various groups such as CAF, the IFC, FMO, the IDB, Bladex and Cofide as it continues to grow. BanBif currently has 32,000 SME clients in Peru and a loan portfolio of about $560m.
Nexxus Close to CCD
Mexican private equity manager Nexxus Capital is targeting the close of a MXP2.5bn-MXP3.0bn ($187m-$224m) certificado de capital de desarrollo (CCD) transaction in Mexico’s local market within the next few weeks, according to a person familiar with the plans. The 10-year fund created in the transaction would invest in a broad range of Mexican companies. It plans a return structure similar to other CCDs, with investors getting their money back plus a preferred return, and then returns divided 80% to investors and 20% to Nexxus. Banamex and Santander are managing, the transaction, to be Nexxus’ second CCD.
CCU Approves Equity Raise
Compania Cervecerias Unidas (CCU) has approved a CLP340bn ($680m) equity capital raise, it says, to help fund expansion plans. It plans to issue 51m shares and does not indicate details for timing. The new funds are an important move for the Chilean beverage company, say people familiar with its plans, and will allow it to finance growth, including increasing production. CCU plans to invest CLP1.35bn through 2020, and is also preparing to tap the domestic bond markets. In April, CCU registered up to UF10m ($454m) in domestic bonds, a shelf to be used in the event of non-organic growth needs, according to a person familiar with the registration. The brewer has a UF2m 10-year line, a UF5m 10-year line, and a UF10m 30-year line, which can be used in combination but cannot exceed UF10m total.