Cencosud has signed a letter of intent to acquire 85.58% of fellow Chilean retailer Johnson’s for about $99.3m. A deal, once approved and finalized, would add Johnson’s retail stores that target middle and lower income customers, giving Cencosud greater access to this segment of the population. Johnson’s, owned by the Calderon family, recently said it owed the government more than $100m in taxes.
Category: Chile
Posted inDaily Brief
Moody’s Downgrades ENAP
Moody’s has lowered the credit rating of Chilean state-controlled oil company Empresa Nacional del Petroleo (ENAP) to Baa1 from A3. “The rating downgrade reflects ENAP’s high financial leverage relative to its peers and Moody’s expectation that near to medium term efforts to reduce debt levels will not be sufficient to maintain the A3 rating, particularly in the event of weaker refining margin conditions,” the agency says. The rating outlook is stable. This comes as the company seeks what some consider a tight L+80bp margin on a $300m loan launched last month. Leads Bank of Tokyo Mitsubishi, BBVA, HSBC and JP Morgan are offering MLA, arranger and manger tickets of $50m, $30m and $20m, with upfront fees 45bp, 30bp and 20bp, respectively. Commitments are due October 21.
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Santiago Metro Places Local Bond
Empresa de Transporte de Pasajeros Metro, Santiago’s subway operator, has sold UF5.2m ($225m) in domestic bonds. The 2032 note priced at 96.76 with a 3.75% coupon to yield 4.00%. It was the Metro’s largest placement to date, and will provide funds for debt repayment. Santander managed the sale, rated AA/AA minus on a national scale.
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Bank Holdco Prices UF Deal
LQ Inversiones Financieras, the holding vehicle for the Quinenco conglomerate’s 50% stake in Banco de Chile, has sold UF1.5m ($65m) in bonds. The 2033 note priced at 95.77 with a 3.5% coupon to yield 3.87%. The bonds are rated AA+ on a national scale, and come with a 10.75-year grace period. Banchile-Citi and Bice managed the sale.
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Saesa Gets Local Bond
Chilean electricity transmission company Saesa has sold UF2m ($86m) in domestic bonds, completing a sale it has initially hoped to hold in September. A UF1m 8-year bond with a 2-year grace period priced at 97.92 with a 3.0% coupon to yield 3.45%. A UF1m 21-year bond with a 10-year grace period priced at 96.90 with a 3.60% coupon to yield 3.87%. Proceeds are marked for repaying debt. IMTrust managed the sale, rated AA on a national scale.
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Vapores Set For $1.2bn in Fresh Funds
Shareholders of Compania Sud Americana de Vapores have approved a $1.2bn equity capital increase, to shore up the Chilean shipper as it confronts higher oil prices and lower shipping tariffs. The move follows a similar $500m equity increase in July, and is accompanied by a $350m credit line. Grupo Luksic’s Quinenco is contributing $1bn of the capital hike, with Maritima de Inversiones financing $100m and remaining shareholders the $100m. Vapores also approved the spinoff of the company’s port and logistics unit.
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Banco de Chile Holdco Set for Bond
LQ Inversiones Financieras (LQIF), the holding vehicle for the Quinenco conglomerate’s 50% stake in Banco de Chile, is scheduled to sell today up to UF5m ($215m) in domestic bonds. The issuer is offering 2033 bonds paying a coupon of 3.5%. The LQIF notes are rated AA+ on a national scale, and come with a 10.75-year grace period. Banchile-Citi and Bice are managing the sale.
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Banco Falabella Raises Local Bond
Banco Falabella has sold UF2.5m ($108m) in 7 and 21-year bonds in the Chilean domestic market. A UF1m 2018 note priced at 99.73 with a 3.40% coupon to yield 3.45%, and a UF1.5m 2032 note priced at 99.33 with a 3.85% coupon to yield 3.90%. The banking arm of the Chilean retailer is raising funds to support its lending activity. IMTrust managed the sale, rated AA/AA minus on a national scale and done following marketing in Chile, Peru and Colombia. Quinenco’s LQ Inversiones Financieras is expected to issue up to UF5m in Chile’s bond market today, and Santiago’s Metro is looking to raise up to UF5.2m as soon as Friday.
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Chile Port Operator Plans Equity Raise
Chilean port operator Puerto Lirquen has approved the issue of 90m shares to raise approximately $100m, it says. Lirquen, controlled by the local Matte group, has set a price of CLP540 each and shares will be offered first to existing shareholders. This year, Lirquen was awarded a 20-year concession to operate the Costanera Espigon terminal in San Antonio, an estimated $280m project.
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Copec Targets all of Colombian SIE
Compania de Petroleos de Chile (Copec) plans to launch a public takeover bid for the 47.21% of Colombian energy investment company Sociedad de Inversiones en Energia (SIE) that it doesn’t own. The fuel distributor is offering COP12,700 per share for the 87.02m shares, meaning a COP1.105trn ($568m) purchase if all holders accept. The per share price matches what Copec paid Corficolombiana for a 7.85% stake last month, and represents a 0.32% premium to Monday’s COP12,660 closing price. The illiquid stock has risen 7.47% since the previous trading session on September 8. Copec says it has secured a $315m standby facility with JPMorgan to use in the transaction. The offer period is from October 10 to October 24. In September, Copec spent COP183bn on Corficolombiana’s stake, in a transaction following the 2010 purchase of Colombian fuel distributor Terpel.