Chilean equity issuers should find it as difficult as the rest of the region to issue before the end of the year. Parque Arauco took advantage of a calm window to raise $168m-equivalent through a follow-on, but this does not necessarily indicate that more will follow, bankers say. “It will be very difficult to see more issuance. The issuer came through a window that opened in a challenging environment,” says a local ECM banker. The shopping center developer and operator sold 90m shares, with the controlling shareholders purchasing $60m-equivalent. Parque Arauco plans to use the funds for its $840m expansion plan. LarainVial and Banchile led. Looking ahead, the government could bring the offering of shares in water utility Essal before the end of the year. Food producers Agrosuper and CM Chiloe are awaiting better conditions for IPOs, as are builder Ingevec and retailer SMU.
Category: Chile
Itau Chile Places Local Bond
Itau Chile has sold UF1m ($44.1m) in 2021 domestic bonds. The transaction priced at 98.21, with a 3.5% coupon, to yield 3.72%. Itau self-led the sale, rated AA minus on a national scale, and part of a UF5m program from which UF3m has now been sold.
Itau Chile to Sell Domestic Bonds
Itau Chile is scheduled to sell UF1m ($43m) in 2021 domestic bonds, it says. The notes have a coupon of 3.5%, and are part of a UF5m program from which UF2m have already been sold. Itau is self-leading the sale.
SK Advances Equity Increase
Shareholders of Chilean conglomerate Sigdo Koppers (SK) have given the gree light for a $370m capital increase, according to a company official. The move comes after SK paid EUR550m ($790m) for Belgian portfolio company Magotteaux. That purchase is initially being funded with an 18-month bridge loan from advisor BNP Paribas. The group has been shedding non-core assets in order to be more acquisitive in the mining sector. SK shares closed at CLP821.97 Tuesday.
Essal Close to Sale Decision
Chile’s Essal water utility is close to making a decision about a possible M&A deal or an IPO, perhaps as soon as the next 3-4 weeks, a person familiar with the matter says. Options include a public offering of shares or a block sale to strategic partners, as government entity Corporacion de Fomento de la Produccion (Corfo) looks to reduce its 45% position to about 5%. Timing of a public transaction would depend on market conditions improving. A sale would follow the pattern set in public share offerings this year from fellow water utilities Essbio and Esval. In July, Corfo raised CLP260.64trn ($564m) from the sale of all but 5% of each of the pair, as part of a plan to help with budgetary needs created by last year’s earthquake. That transaction followed an $879m exit from Aguas Andinas. Aguas Andinas owns 54% of Essal. Banchile, Bank of America Merril Lynch and IMTrust, the same trio that managed Aguas, Essbio and Esval, are working with Essal.
Masisa to Issue Debut USD Bond
Chilean board products manufacturer Masisa plans to raise $200m-$250m in what would be its debut USD bond offering in the first quarter of 2012, says CFO Eugenio Arteaga. The company is still deciding between a 5-year or 10-year tenor for the planned 144A transaction and expects to mandate banks in the first two weeks of November. The company is raising funds to refinance existing debt. In January 2009, it sold $103m-equivalent in 2029 domestic bonds denominated in the UF inflation-linked unit. That transaction was led by BBVA and priced at 6.42% yield, with a rating of A on a national scale.
Chilean Water Company Signs Loan
Esval has signed a UF1.5m ($65.5m) 5-year bullet loan with BBVA. The loan pays 3.85%, to be made in semi-annual payments. The water treatment company will use proceeds to pay down outstanding commercial paper, says CFO Agustin Benavente. The loan is being done in accordance with the company’s strategy to issue long-term debt, he says.
Banco de Chile Inches Closer to MXP Debut
Banco de Chile seems to be moving closer to its local Mexican bond debut after S&P assigned an AAA national scale rating to the proposed MXP2.5bn ($186m) issue. The borrower is expected to come with an up to 3-year tenor after earlier filing a shelf to issue up to MXP 10bn of debt in the local Mexican market. Banco de Chile will be the third Chilean issuer to tap the Mexican domestic market following similar moves by Banco de Credito e Inversiones (BCI) and Chilean miner Molymet. Banamex and JPMorgan are leads.
Chile AFP Names CEO
Joaquín Vial Ruiz-Tagle, CEO of Chilean pension fund manager AFP Provida, has resigned. Joaquin Cortez replaces him. Provida is the country’s largest pension and is controlled by BBVA.
CMPC Completes 10-Bank Syndication
Chile’s CMPC has closed a $600m 2-tranche loan syndication after luring 10 banks into the deal. The pulp and paper company secured $400m through a 5-year term loan with a margin of Libor+65bp, and a $200m through a revolver that will be available for 3 years. The company did not disclose pricing on the revolver, but bankers had been talking about a Libor+70bp margin after the deal had been launched earlier this year. Pricing had been seen as tight, but banks were keen to participate in what was a partial refinancing for a credit that is an infrequent issuer in the loan market. If drawn the revolver would amortize every 6 months starting in month 42, with the term loan carrying the same amortization structure. Bank of America Merrill Lynch, Bank of Tokyo Mitsubishi, EDC, JPMorgan and Scotia led the transaction, while Banco Santander-Chile, Citibank, Deutsche Bank, HSBC and Nordea Bank Finland also participated..