Category: Chile

The sale of a 51% stake Chilean drugstore chain Farmacias Ahumada belonging to founder Jose Codner is nearing its end and a buyer should be announced at any moment, says a person close to the negotiations. The target company does not return calls for comment, but local press reports indicate that potential buyers are US-based Walgreens, Walmart, Mexico’s Casa Saba, Chile’s Falabella – which already holds a 20% stake – and Argentina-based private equity firm Pegasus, which controls the Farmacity chain. Goldman Sachs and local shop Altis are advising the seller. Philippi Yrarrazaval Pulido y Brunner is the legal advisor, according to company information. Farmacias Ahumada, which has more than 1,200 stores in Chile, Mexico and Peru, has sales of about $1.7bn. The company has a market cap of about $300m.

A $120m 14-year financing package for Hydro Chile is in due diligence and expected to close by July. Banco Espiritu Santo, Calyon and WestLB are leading the deal and may bring another bank in. A banker not on the transaction but familiar with the sector estimates a price of just over 400bp above Libor. The funding is for 2 run of river hydro power projects, El Paso and San Andres.

Chile’s central bank has opted to leave its monetary policy rate unchanged at 0.50%, saying that the immediate effects of the recent earthquake turned out to be worse than expected, but that consumer demand is increasing faster while unemployment is decreasing. Morgan Stanley had forecast that with inflation under wraps, the central bank may choose to wait until June for further evidence of how fast the economy is rebounding from disruptions caused by the earthquake. Barclays, on the other hand, believed a 25bp hike was possible and that Chile could tighten to 6.25% by December 2012.

Chilean president Sebastian Pinera has appointed former banker Gerardo Jofre as chairman of Codelco, the state-owned copper producer says. In addition to being on Codelco’s board, Jofre is also a director at Deutsche Bank and Lan Airlines, and was a former executive at Santander. He succeeds Nicolas Majluf. Pinera has also elected Fernando Porcile, Juan Ossa and Andres Tagle to the board. Former BHP and Vale executive Diego Hernandez had already been named as new CEO, and will begin May 19.

While some analysts Chile to leave rates at 0.5% today, others believe tightening may begin. Barclays believes a 25bp hike could come today, with the policy rate reaching 6.25% by December 2012. On the other hand, Morgan Stanley forecasts that “with inflation so far well behaved, we suspect the central bank may choose to wait until June for further evidence of how fast the economy is rebounding from the dislocations caused by the earthquake.” It does say, however, that there is a risk of the tightening cycle beginning immediately.

Chilean financial institution Corpbanca has issued UF2m ($80m) in 10-year local bonds. The notes priced at 105.12 with a coupon of 4.00% to yield 3.42%. Corpbanca, previously known as Banco de Concepcion, claims to have a 7% share of Chile’s loan market and operates 107 branches. Corpbanca’s brokerage unit managed the sale.

Banco de Chile has sold UF4m ($159m) in subordinated bonds on the local market, according to Chilean stock market filings. The 23-year note denominated in the inflation-linked UF unit priced at 109.75 with a 4.5% coupon to yield 3.85%. The bank’s Banchile brokerage managed the sale, rated AA on a national scale.

Natalia Corfield has been named LatAm corporate debt analyst at ING, replacing Diego Torres who returned to Chile last month, according to David Spegel, head of EM strategy at ING. She has been working as a desk analyst for 5 months at ING in New York, after moving from Dresdner in London, where she had been since 2004. She was previously at Bear Stearns. Corfield, a Brazilian national, reports to Spegel and will focus on a range of sectors, including banking, airlines, food producers, and metals and mining.

Santander Chile is meeting investors on a “non-deal” roadshow this week in Asia, according to an official familiar with the process. Deutsche and Standard Chartered are managing the tour. Last month, the A+/Aa3 bank sold $500m in 2012 floating-rate bonds priced at Libor+125bp, through Deutsche Bank and Santander.

Corp Group Interhold, the holding company for Chile’s Corpbanca has sold $130m in dollar bonds to international investors, it says. The Reg S 2015 bond priced at 101.520 with an 8.000% coupon to yield 7.525%. Proceeds will be used to finance the holding company’s recent acquisition of local cable television and communications firm VTR Globalcom and for other purposes, it says. LarrainVial managed the sale, rated BBB-/BB.