Chile’s Sociedad de Inversiones y Servicios de la Construccion has unveiled more details on its upcoming UF2.5m ($118.9m) 3 tranche domestic bond issue after filing a prospectus late last week. A pricing date has been set for July 28. The borrower plans to issue up to CLP54.8bn in a Series A tranche with a 6.8% coupon, a Series B tranche of up to UF2.5m paying a 3.2% coupon, and a Series C tranche of up to UF2.5m with a 3.6% coupon. Series A and B carry 5-year tenors and bullet payments. Series C has a 21-year tenor with a 10-year grace period. Celfin and IM Trust are managing the sale, rated AA/AA+ on a national scale. The issuer is an investment vehicle of a construction trade association called Camara Chilena de la Construccion. It holds stakes in the AFP Habitat pension fund, insurance companies Camara and Isapre Consalud, while also having holdings in clinic operator Red Salud and other companies.
Category: Chile
Parque Arauco Sets Share Price
Chilean commercial property developer Parque Arauco has set a price of CLP950 per share for a 90m share sale, which would raise CLP85.5bn ($185.2m). Proceeds will help fund Parque Arauco’s expansion in Chile, Colombia and Peru. Arauco’s shares closed at CLP993 Friday.
CAP to Spend $150m in 2036 Buyback
Holders of Chilean steelmaker CAP’s 2036 bonds have agreed to sell back $130m (65%) of the bonds in a tender offer, meaning it will spend $149m on the repurchase. CAP offered holders of the $200m in outstanding 7.375% 2036 bonds $1,117.33 per $1,000 principal in the offer expiring Tuesday. Citi was dealer manager. The 2036s were originally sold in 2006 through Citi and HSBC and priced at 99.761 to yield 7.395% or 250bp over. The BBB minus rated CAP recently extended a 3-year loan into a 5-year facility, upsizing to $200m from an original $150m.
CAP Sets Buyback Price
Chilean steelmaker Cap has set the repurchase price for the tender of its $200m of outstanding 7.375% 2036 bonds. It will offer holders $1,117.33 per $1,000 principal in the offer that was to expire at 5pm Tuesday, with settlement July 22. CAP has not yet give the results. Citi is acting as dealer manager. The 2036s were originally sold in 2006 through Citi and HSBC and priced at 99.761 to yield 7.395% or 250bp over. The BBB minus rated CAP recently extended a 3-year loan into a 5-year facility, upsizing to $200m from an original $150m.
Cementos Bio Bio Sells Ceramic Assets
Subsidiaries of Cementos Bio Bio has sold its stake in its ceramic businesses in the US, Ecuador, Chile, and Peru for $67m. Cementos says the sale is in line with its decision to focus on its core businesses of cement, lime, concrete, aggregates, and mortars. Cementos does not say which parties acquired the businesses.
Cencosud Loses CFO
Chilean retailer Cencosud’s CFO, Gerardo Molinaro, will leave the company, effective July 31. CEO Daniel Rodriguez, will take over the role in the interim.
Chilean Investor Readies Local Bonds
Inversiones la Construccion is scheduled to start marketing today a UF2.5m ($118m) bond sale in Chile’s local market, according to bankers on the deal. It is offering investors a choice of 6.8% 2016 CLP bonds, 3.2% 2016 UF-denominated bonds and 3.6% 21-year UF bonds, with pricing scheduled for August 2. Inversiones la Construccion is looking for funds to refinance debt. Celfin and IM Trust are managing the sale, rated AA/AA+ on a national scale. The issuer is an investment vehicle of a construction trade association called Camara Chilena de la Construccion. It holds stakes in the AFP Habitat pension fund, insurance companies Camara and Isapre Consalud, as well as clinic operator Red Salud and other companies.
Issuers Prep Bonds in Volatile Market
Close to $2.5bn in new LatAm bond supply is sitting in the immediate pipeline, but whether much of that sees the light of day will depend on events in the broader markets, say bankers. After a brief spurt of issuance earlier this month, activity was reduced to a trickle last week with just the Province of Buenos Aires raising $250m through a retap of its 2015s, but a failure to reach a consensus on pricing forced other borrowers to either extend deadlines or indefinitely postpone deals. Worries over European and US debt problems are threatening to close windows as the buyside seeks extra premiums to compensate for increased risks. More bad news from the US and Europe this week could spoil the fun for LatAm issuers preparing to issue. These include Argentine oil company YPF, Guatemala’s Banco Industrial, oil services credit Quieroz Galvao, sugar and ethanol concern Usina Vista Alegre and the Dominican Republic. This comes as several companies carry out liability management operations involving the issuance of new bonds. Chile’s AES Gener, for instance, is looking to sell a new 2021 as part of its exchange and tender, while Argentine utility Transener wants to do the same. This doesn’t include new names that are also heard plotting bond sales such as Argentina’s Grupo ODS, which is thought to have mandated Credit Suisse for a $150m 2018. If market conditions stabilize YPF could be the first off the block with an up to $300m 8-year, 7-year average bond (Ba2/BB minus). The subscription period has now been extended to July 22. The Argentine blue-chip name wants to push out a marquee trade, but it may have to show some flexibility on pricing versus comp Pan American Energy. “[YPF’s postponement] is a precautionary measure on the issuer’s part,” says one trader Friday. “Markets have stabilized post the Province of Buenos Aires tap so I would expect them to put out guidance Monday sometime, if they can overcome their pride to price flat to Pan American Energy.” On Friday PA
AES Gener Launches Tender, New 2021
Chile’s AES Gener has launched a tender offer for its $400m in outstanding 7.5% 2014 USD bonds with the intention of also launching a new 2021. The electricity provider is offering 5.25% 2021s or cash to holders of the 2014s. Investors who opt for new bonds will receive $1,000 in 2021s plus $150 in cash per $1,000 principal of existing bonds if tendered prior to July 27. Thereafter, they will receive new bonds plus $110 in cash as long as they tender before the final deadline of August 10. Holders choosing cash will get $1,130 per $1,000, and have only until July 27. Gener also plans to sell new 2021s to the market, and is separately tendering for its local 8.0% 2019 bonds in a domestic offer. Fitch has put an up to $475m size on the new issue after rating it BBB minus last week. The offer is contingent upon a minimum $200m overall acceptance to the USD tender, as well as Gener successfully issuing enough new 2021s to the market to cover costs associated with the cash portion of the USD bond tender and the local bond ender. Citi and Deutsche Bank are acting as dealer managers.
Chile Grabs $564m from Water Equity Sale
The Chilean government’s Corporacion de Fomento de la Produccion (Corfo) has raised CLP260.64trn ($564m) from the sale of nearly all of its positions in water utilities Essbio and Essval. In a public follow-on, Corfo sold 3.655trn shares of Esval at CLP0.03 each and 10.17bn Essbio shares at CLP15.18 each, matching the floor prices set earlier last week. It offloaded 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with budgetary needs created by last year’s earthquake. Last month, for instance, the government sold $879m of Aguas Andinas. Corfo is set to keep a 5.0% position in each of Esval and Essbio, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, BAML and IM Trust managed the transaction, the same trio that handled Aguas Andinas. The offering also gives much more liquidity to each company – previously Essbio had a 5.4% free float and Esval less than 1%. Esval shares closed Friday at CLP0.03 Friday and Essbio at CLP15.18. Esval is the second-largest water utility in Chile, and Essbio the third-largest, both providing service in the central part of the country.