BancoEstado is planning a UF5m ($217.4m) 3.5%, 7-year bullet, with talk heard at about 110bp-120bp over comparable government bonds. Roadshows began Tuesday and pricing is expected January 16. Banco Estado is managing the sale. In 2010, the bank priced UF3m of local bonds at 112.38 with a coupon of 4.50% to yield 3.74%, or 32bp over the local central bank notes. Proceeds were to be used to finance the bank’s expansion plans. The bank itself led the sale.
Category: Chile
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Forum Parks New Bond
Chilean auto lender Forum raised CLP22bn ($43m) in the local bond markets Thursday, pricing a 2.5-year bullet at 98.83 with a 6.15% coupon to yield 6.70%. Proceeds will be used for growth and debt financing, says a person familiar. BancoEstado led the sale, rated AA minus/AA+ on a national scale.
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Celara Rolls Out New 10-Year
Chilean pulp and paper company Celulosa Arauco (Celara) has rolled out its first bond issuance of the year, a $500m 10-year that drummed up about $2.5bn in orders with participation from nearly 200 accounts. The Baa2/BBB/BBB plus 10-year priced at 98.530 with a 4.75% coupon to yield 4.938%, or UST plus 295bp, in line with plus 295bp area guidance. Demand was healthy with the deal being 5x oversubscribed. Leads were heard citing a new issue premium at around 10bp, calculating from a Wednesday morning G-spread level of 285bp on its existing 2021s. One non-participating EM portfolio manager estimated a 27bp premium versus Celara’s 2021s, which he spotted at 248bp after accounting for a tenor extension. “It was a fair deal,†the investor adds. Proceeds will be used to refinance existing debt and for general corporate purposes. The bonds were trading in the grey at reoffer plus 3/8, according to an investor. Participation came from a mix of Latin American, US, and European accounts. In September 2010, Celara came with a $400m 5% 2020, which was priced to yield 5.12%. Itau, JPMorgan and Scotia managed the most recent 144A/RegS transaction.
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Chilean Regulator Eyes Entel’s GTD Acquisition
Chile’s antitrust authority is reviewing the acquisition of telecom company GTD Grupo Teleductos by Chile’s Empresa Nacional de Telecomunicaciones (ENTEL), voicing concerns about the deal’s impact on the country’s telecom industry. The Fiscalia Nacional Economica noted that the transaction could, among other effects, create a dominant player in the fixed line and broadband markets. The FNE has recommended to the antitrust tribunal that it impose a number of conditions for the transaction to move forward. These include Entel divesting part of its wireless spectrum, and the new company maintaining the products GTD currently offers to the market for at least two years. These, as well as other measures, meant to give breathing room to competitors in regions where Entel would be a dominant service provider. Officials at Entel would only say that the company is reviewing the FNE opinion. In late November, Entel purchased GTD in exchange for a 9.8% stake in the Chilean telecom operator. Entel has a $4.46bn market capitalization, with a free float of some 236,523,695 shares. In 2010, the company generated Ebitda of around CLP67.5bn on the back of some CLP150bn ($285.8m) in revenues.
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Codelco Takes Legal Aim Against Anglo American
Chile’s state-owned copper miner Codelco is planning to sue Anglo American in its bid to purchase a 49% stake in the Anglo-controlled Anglo Sur mining complex. In the latest of a dispute that has now run for several weeks, Codelco has exercised its option to buy the 49% stake in the Anglo Sur project for $6bn or 10.2x 2010 Ebitda, despite Anglo’s 24.5% stake sale to Japan’s Mitsubishi. Coldelco is now asking Anglo to hand over 24.5%, while the Chilean company continues to fight to complete the 49% purchase. A Codelco statement cited finance vice president Tomas Keller pointing out that “this does not mean [Codelco] will settle for 24.5%.” For its part, Anglo is legally challenging the validity of the 49% purchase option. Officials at Codelco could not comment further and Anglo representatives could not immediately be reached. In early November Anglo sold a 24.5% in Anglo Sur to Mitsubishi for $5.39bn or a multiple of 18.1x 2010 Ebitda, higher than the 10.2x multiple the company would realize by selling the 49% stake to Coldelco as stipulated in the option agreement. According to the option, Codelco can buy 49% as long as Anglo still holds a 100% in the venture, otherwise it must buy less. Codelco argues, however, that Anglo had already received notice of its intentions to buy the 49% stake and as such it must still sell that piece of the business.
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Forum Narrows Options, Preps Pricing
Chilean auto lender Forum is expected to issue a 22bn peso ($42.9m) bond today, say people familiar with the deal. The company had delayed its issue into the new year in anticipation of lower spreads and market improvement. The borrower can choose from four series, but pre-sounding has investors congregating mostly around the 2.5-year bullet in pesos with a 6.15% coupon. CEO Raul Aronsohn previously told LatinFinance that he favored a peso issue. “If we go to UF we have to swap them against pesos after that, so we prefer to go straight ahead to pesos,” he said. Banco Estado de Chile is managing the issue, rated AA+/AA minus on a national scale.
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Quinenco Lands Local Trade
Chilean conglomerate Quinenco raised UF4.65m ($203m) in the local bond markets Wednesday. It priced a UF2.325m 21-year at 97.82 with a 4% coupon to yield 4.17%, or 139bp over government paper, and a UF2.325m 7-year at 98.76 with a 3.5% coupon to yield 3.78% or 146bp over. Banchile Citi and BBVA managed the sale. Proceeds will be used for investments. The issue is rated AA minus.
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Chile Seeks Longer Maturities
The Chilean government plans to raise $6bn equivalent in the local market in 2012 through peso and inflation-linked UF-denominated bonds, including its first ever 20-year.
The idea is to lengthen maturities in its domestic curve and encourage the use of long-term nominal peso-denominated paper among corporates, similar to what happens in developed markets. The finance ministry expressed an interest in seeing more long-term mortgage bonds denominated in pesos, which at the moment comprise only 1% of this market. The sovereign hopes to issue up to CLP500bn ($976m) of nominal 10-year bonds and up to CLP280bn of 20-year paper. It is also targeting up to 23m UFs of 5-year paper, up to 13m UFs of 7-year bonds, up to 26.5m UFs 10-year issues, and up to 16.5m UFs of 20-year paper. At the same time, finance ministry plans to inject another $1.7bn in its economic stabilization fund (FEES) as it looks to build a liquidity buffer against any deterioration in the broader international markets.
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Quinenco Poised to Tap
Chilean conglomerate Quinenco is expected to price an up to UF4.65m ($202m) bond offering in the local market today. Delayed late last year, the offering could comprise an up to UF2.3m 3.5% 7-year with a 2-year grace period, and an up to UF2.3m 4% 21-year with a 15-year grace period. Proceeds will be use for investments. Banchile Citi and BBVA are managing.
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Sacyr Sells Stake in Chilean Concessions
Spanish construction company Sacyr has decided to sell 49% of two Chilean motorway concessions to the family offices of Chilean retailer Falabella group. The stakes were sold for a combined EUR177.2m ($231.2m), Sacyr says. Corso and Auguri, both part of the Falabella group, paid EUR120.7m for a stake in the Concepcion-Cabrero motorway concession and EUR56.5m for the Accesos a Iquique motorway. Officials at Falabella and Sacyr could not immediately be reached for comment. In November, the construction company secured a EUR276m financing agreement with Chile’s Corpbanca to fund construction of its motorways. On another front, earlier this month Sacyr sold a 20% stake in Repsol back to the energy company and was left with a 10% stake. The sale came after Sacyr had teamed up with Mexico’s Pemex to attempt a management change in Repsol.