Sociedad de Rentas Comerciales has sold UF1m ($43.8m) in Chile’s domestic bond market, according to people familiar with the transaction. The property company priced the 21-year bonds at 96.79, with a 4.00% coupon to yield 4.30%, or 185bp wide to government bonds. The bonds have a 10-year grace period. Half of the funds raised are expected to be used to refinance long term liabilities and the other half to finance the issuer’s investment program. IMTrust led the sale, rated A/AA minus on a national scale. Elsewhere in Chile’s domestic market, Corporacion Universidad de Concepcion privately placed UF4.2m. State railway company EFE is scheduled to raise up to UF2.9m today. Casino operator Dream had been pondering a sale of up to UF3.2m this week, but has elected to put the deal off.
Category: Chile
University Taps Bond Market
Corporacion Universidad de Concepcion has sold UF4.2m ($184m) in bonds in Chile’s local market. The 8-year bonds were sold via private placement at an interest rate of 5.9%. The issuer, a holding company for different businesses linked to the Chilean university, is raising funds to restructure liabilities and finance investment. CorpBanca led the deal. Concepcion last issued in 2003, selling UF2m in 10-year bonds.
CFR African Vote Pushed to January
Shareholders of South Africa’s Adcock Ingram have postponed a vote on CFR Pharmaceuticals’ takeover offer to January from this week, the drugmaker says. The move follows a recent increase of the Chilean’s cash and stock takeover offer by 1.6% to ZAR12.8bn ($1.23bn). The offer was up from ZAR12.6bn. CFR’s bid comes at ZAR74.50 per share, up from ZAR73.51, and contemplates ZAR6.4bn-ZAR8.2bn in cash, and ZAR4.6bn-ZAR6.3bn in CFR shares. CFR claimed the support of shareholders holding 53% of Adcock as of last month. The acquirer needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.
Chilean Inks IFC Energy Facility
The IFC has agreed to loan $75m to Chile’s Banco BICE to help it finance non-conventional renewable energy (NCRE) projects, it says. The 10-year credit line is the IFC’s first to a South American bank targeting only renewable energy-focused projects, it says. The interest rate was not disclosed. The loan supports lending to borrowers involved technologies such as hydropower, biomass, solar, geothermal and wind power.
EFE Targets Domestic Bond
EFE is heard considering Friday to issue up to UF2.9m ($131m) in Chile’s domestic bond market. The state railway is able to choose among 25-year bullet bonds with a 3.6% coupon and 29.5-year bullet bonds with a 3.6% coupon. The UF-denominated notes are guaranteed by the Republic of Chile. Proceeds from the sale will help finance EFE’s strategic plans. Banchile is managing the transaction, rated AAA on a national scale. The deal would follow a UF1.9m transaction in April, in which EFE placed a 3.70% 2039 bond at 3.54% yield, or government bonds plus 77bp. Elsewhere in the domestic DCM, casino operator Dreams was heard still deciding whether to come to market as soon as today with an issuance of up to UF3.2m.
Saieh Steps in at SMU
SMU approved the appointment of controller Alvaro Saieh as president, the Chilean supermarket operator says, a move aimed at bolstering investor confidence. The billionaire can be more actively involved in the retailer’s turnaround from the position. Following disclosures this year of accounting errors that led to a breach of debt covenants, SMU has been executing a plan that includes a number of store closings, asset sales and a focus on lowering costs. Saieh put up $300m in fresh equity last month and SMU will raise another $200m by 2016. Troubles at SMU have pushed up borrowing costs at Saieh’s CorpGroup. The financial group was expected to announce as soon as this week an agreement to merge the CorpBanca operation – most likely with Itau or BBVA.
CFR Sweetens SA Bid
CFR Pharmaceuticals has increased its cash and stock takeover offer for South Africa’s Adcock Ingram by 1.6% to ZAR12.8bn ($1.23bn), it says. The Chilean’s offer is up from ZAR12.6bn and comes as it faces competition from South African conglomerate Bidvest, who has increased its holding in Adcock to 6.8%. CFR’s bid comes at ZAR74.50 per share, up from ZAR73.51, and contemplates ZAR6.4bn-ZAR8.2bn in cash, and ZAR4.6bn-ZAR6.3bn in CFR shares. CFR claimed the support of shareholders holding 53% of Adcock as of last month. It needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.
Masisa Ends Investor Meetings
Chile’s Masisa has ended fixed-income investor meetings ahead of a potential bond debut, with no announcements heard as of Friday afternoon. The BB rated producer of wood products visited Lima, New York, Los Angeles, Boston, New York and London through Friday. Deutsche Bank, Itau, JPMorgan and Scotiabank are managing. CFO Carlos Toro told LatinFinance in January that Masisa could look to issue a 5-year or 10-year bond this year of $200m-$250m. Proceeds would be used for refinancing the company’s outstanding debt. In September, Masisa raised UF2m ($94m) in a domestic bond transaction that was 2x oversubscribed.
Banco del Estado Offers Sub Bonds
Banco del Estado de Chile has issued UF2m ($88m) in 30-year subordinated domestic bonds, according to people following the sale. The bonds priced at 101.99 with a 3.50% coupon to yield 3.39%, or government bonds plus 80bp. The sale saw four times demand. Next week, Sociedad de Rentas Comerciales is expected to sell UF1m in the Chilean market, with the proceeds to be used for refinancing and investments.
Chile Holds Rates
Chile’s central bank decided to hold rates at 4.5% when its central bank met Thursday, in line with market expectations. “Our trading partners are growing somewhat below their historic average, but a recovery is expected in the coming quarters, grounded on the rebound of developed economies, especially the United States, and the stabilization of emerging markets,” the bank says in a note. The bank cut rates 25bp at its November meeting, following a surprise cut of 25bp at its October meeting.