Category: Chile

Japan’s Mitsubishi is wants to buy a stake in Chilean iron ore producer Minera del Pacifico (CMP), according to Cap, which controls the miner. Cap adds that the size of the stake Mitsubishi would buy has not yet been determined. Mitsubishi already holds 50% of Cap’s Cia. Minera Huasco and 19.3% in Cap itself. Cap’s stock closed down 0.8% at CLP13,435.

Swiss miner Xstrata says it has received overtures for its 70% stake in the El Morro copper and gold project in Chile. A company spokeswoman says Xstrata is evaluating the approaches it has received, though no decisions have been made on whether or not to divest El Morro or dilute its stake. El Morro is a minor project for Xstrata and is not yet in production, according to a mining analyst. And while some press reports say El Morro could be worth $700m, it is difficult to say how much the project could be worth since that would depend on the buyer’s expectation for copper prices 5-10 years, he adds. Using copper’s average price this year of $2 per pound, the project could actually have a negative valuation, says the analyst, who declines to be named. Xstrata has indicated that developing this project would require capex of about $2bn. Xstrata, which is also trying to push Anglo American into a merger, is in the process of paying down $13bn in debt.

Chilean holding company Inversiones Oro Blanco has raised $200m by issuing a dollar bond and taking out a bank loan. The controller of SQM a fertilizer and chemical producer, and Pampa Calichera, a publicly listed subsidiary with holdings in other assets, sold $100m in 5-year 8.5% bonds at par in a RegS offering. The bonds are guaranteed by Calichera shares. The issue was sold to 20 plus, mostly Chilean, investors, says an Oro Blanco official. The deal, managed by LarrainVial and Celfin, is the fourth Chilean USD issue following much larger placements from investment grade credits Coldelco, ENAP and Arauco. Oro Blanco also says its parent company Norte Grande has signed a $100m 5-year loan with Banco de Credito e Inversiones and Banco Itau Chile, of which $80m will go to Oro Blanco. The official declines to disclose the interest rate on the loan.

Chilean electric transmission company CGE Transmision is preparing to issue up to UF7.9m ($306m) in domestic bonds denominated in CLP or the UF inflation linked unit. The issuer can choose from 3.9% 2014 bonds, 4.4% 2019s and 4.8% 2031s denominated in UF, or 6.2% 2014 CLP-denominated notes. LarrainVial and HSBC are managing the transaction, rated AA+ on a national scale. CGE started roadshowing the deal last week, and is has set August 13 as the pricing date, according to regulatory documents. Proceeds will fund the repayment of existing debt, including some $220m in 7.875% 2011 dollar bonds that it has repurchased through a tender offer closed last week. CGE says it received orders for $352.5m of the bonds in the tender, which had a limit of $220m. HSBC was dealer-manager on the buyback.

Chile-based airline LAN says it raised $210m in bank loans in Q2, bringing its 2009 volume of new funds raised in the local bank market to $250m. The bilateral CLP-denominated facilities have tenors of 3 years and pay around 150bp over the local TAB rate. Among the lenders are CorpBanca, Itau Chile and Santander, say executives familiar with the process. LAN says it is also wrapping up a long term financing with US Exim Bank for 3 Boeing 767s to be delivered between 2009 and 2010. LAN’s total cash position at the end of the quarter stood at $700m.

A group of 15 investors is looking to collectively acquire a 10% stake in Chile tech company Quintec, offering CLP168 per share to any willing sellers, in order to keep competitor Sonda from taking over the company. “They believe Quintec would be better off without Sonda,” says Jose Miguel Barros, a parter at Larrain Vial partner, which is advising the group of investors. He tells LatinFinance some of those investors are already Quintec shareholders. Sonda is offering to acquire 100% of the company, its most recent bid upgraded to CLP165 per share this week, valuing the target at $49m. Celfin Capital is advising Sonda. Quintec shares closed at CLP168.00, up 0.7%.

Telefonica Moviles Chile has sold CLP32bn ($59.3m) in 2014 bonds in the local market. The mobile phone operator better known as Movistar priced the notes at 99.61 with a 5.60% coupon to yield 5.69%. It plans to use proceeds from the sale, rated AA/AA+ on a national scale, to repay short-term debt and for working capital. IMTrust managed the transaction, and served as financial advisor along with BBVA.

Scotiabank has plans to open wealth management centers in Panama, Costa Rica and Chile over the next 9-12 months, Dan Wright, the bank’s senior vice president of international wealth management, tells LatinFinance. In late June the bank opened a wealth management center in Miami to provide private banking services to non-US residents and non-US citizens only. “Because of the flight to safety, investors have been sitting on cash. But partly because of this our assets have continued growing,” Wright explains. He adds that over the last 2 years assets have sees CAGR growth of 30%, but Scotia declines to state how much it manages. The banker also says that he still does not see high-net worth investors in LatAm turning to riskier investments. “They are still careful and conservative in their investments, sticking to fixed income – such as good credit quality bonds – and cash,” he says.

Chilean technology company Sonda has improved its offer for 100% of Quintec’s shares to CLP165 per share, or about $49m, from CLP150 per share, or $43m in cash, after the target’s board balked at the offer. The original offer was made on July 9. Celfin Capital is advising the buyer. On August 4, Sonda’s shares closed up 1.2% at CLP777. Quintec’s shares closed up 1.2% at CLP167.

Chilean blue chip miner Antofagasta is looking to raise an up to $750m loan for its Los Pelambres open pit copper mine. In its RFP to banks, it requested bids for tenors of 3, 5, 7 and 10 years, say market participants, who note invitations went to ECAs and commercial banks. The company is understood to be already evaluating proposals, and may select leads in the coming weeks. Bankers say Antofagasta faces a cost of around Libor plus 200bp for 3-year bullet risk. The deal will be structured as a corporate loan rather than as project finance, given the brownfield nature of the venture, which has an long operating track record and predictable Ebitda. The borrower will also seek to avoid a broad syndication, sticking instead to a club of willing lenders, speculate market participants. In May, Antofagasta wrapped up a $1.05bn 12-year project financing for Minera Esperanza, a copper and gold project it co-owns with Marubeni. Of the total pile, $650m was taken by ECAs and the remaining $400m distributed among commercial banks Tokyo-Mitsubishi, Calyon, ING, Mizuho, Santander, SMBC and Natixis. While this deal means some banks already have exposure to Chilean mining risk and Antofagasta, it should not detract from interest in deploying more capital to the credit, given its high quality.