Daimler Mexico is planning to issue up to MXP2.5bn ($192m) in 5-year floating-rate domestic bonds in January, according to people familiar with the issuer’s plans. It originally had targeted November pricing. Banamex, HSBC and Scotiabank are managing the auto manufacturer’s sale, rated AAA on a national scale. Daimler last came to market in November 2012, when it priced a MXP1bn 2015 bond at TIIE+35bp.
Category: Regions
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OHL Mexico Concession Lands Coupon Inside 6%
OHL Mexico’s Concesionaria Mexiquense (Conmex) road concession unit got a 5.95% coupon on its MXP8.24bn-equivaqlent ($636m) 2035 UDI-denominated bond, according to a report from Fitch. The MXP18.78bn-equivalent private placement also included a second MXP10.54bn-equivalent 2046 zero-coupon UDI-denominated tranche. Both tranches were sold at unspecified discounts that resulted in total proceeds of MXP13.52bn, according to Fitch. The bonds amortize monthly and the tranches have respective weighted average lives of 19 and 28 years. Proceeds will be used to refinance existing debt. Goldman Sachs managed the 144a/RegS international private placement, rated BBB/BBB. Goldman also provided Conmex with a MXP6.47bn loan due 2027 that pays TIIE+210bp through 2017, and 350bp after, according to Fitch. Conmex is an indirect wholly-owned subsidiary of OHL Mexico, and is its largest asset in terms of kilometers, toll revenue and Ebitda generation. It operates the 155km Mexico City Beltway under a 30-year concession.
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SanMex Sets Target for Novel T2
Santander Mexico is out with mid-6% initial price talk on what would be LatAm’s first Basel III-compliant Tier 2 bond, according to people familiar with the matter. Books opened Tuesday with pricing expected as soon as today. The Mexican bank is targeting an issue of $1bn in the 10-year bond that carries risk of coupon deferral or principal write-down. Coupons on the instrument will be deferred, cumulatively, if the bank’s core tier one ratio breaches 7% of risk weighted assets (RWAs). The instrument will take a partial principal write-down if the bank’s capital falls below 4.5% of RWAs, according to Moody’s. The deal, which could set a precedent for additional sales of Tier 2 debt in the region, is 75% underwritten by the parent company. Deutsche Bank, Morgan Stanley and Santander are managing the deal, rated Ba1/BB/BB+, below the bank’s Baa1/BBB/BBB+ senior rating. Santander Mexico is aiming to have a Tier 1 capital ratio of at least 12% and a Tier 2 capital ratio of approximately 2.5%. In November 2012, Santander Mexico debuted in the international market with a $1bn senior unsecured bond, getting $4.3bn in demand and a 4.351% yield, or UST+260bp.
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Aval Opens Follow-on
Colombia’s Grupo Aval has opened the subscription period for an equity follow-on targeting COP2.41trn ($1.25bn), according to regulatory documents. The financial group is offering 1.86bn common shares at COP1,300 each through January 9. Existing holders will be allowed to subscribe 0.14 shares per share held, and are expected to make up a large part of the sale. This is seen as driving the issuer’s choice to not use the SEC process for which it registered earlier this year, and opt for a more easily completed domestic deal, in which the issuer has better control over price. Corficolombiana is leading the transaction, joined by Casa de Bolsa, BTG Pactual, Citi, Credicorp, LarrainVial and Serfinco. Aval is funding a busy M&A agenda, having completed in April the purchase of BBVA’s Horizonte Colombian pension operation for $530m, and is working on closing the $411m purchase of Guatemala’s Reformador and the $646m purchase of BBVA Panama. Separately, Aval’s Banco de Bogota subsidiary is scheduled to close the books Wednesday on a COP1.0trn follow-on of its own. Aval is expected to use some of its proceeds to replace funds used to subscribe to the Banco de Bogota transaction.
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Pemex Revolver Draws 20-plus
Pemex has closed a $1.25bn 3-year revolver, with 16 banks joining the six leads, according to people familiar with the terms. Bookrunners Citi, Credit Agricole, HSBC, Mizuho, Natixis and Sumitomo Mitsui added Bank of Tokyo-Mitsubishi, Bank of America, Banorte, Barclays, BBVA Bancomer, BNP Paribas, Export Development Canada, JPMorgan, Societe Generale and Scotia at the MLA tier. Deutsche Bank is lead manager and Bank of New York, Credit Suisse, Goldman Sachs, Morgan Stanley and Santander are in at the manager level. Final allocations ranged from $43m-$69m, with the Mexican oil producer heard having to cut back as much as 40% from the initial ticket size targets due to a large oversubscription. The loan pays Libor+80bp, with 29bp commitment fees. MLAs were offered 60bp fees, lead managers 50bp and managers 40bp. Pemex is using proceeds to refinance a similar facility that was due in November.
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Road Operator Completes International Placement
OHL Mexico’s Concesionaria Mexiquense (Conmex) road concession has priced MXP18.78bn-equivalent ($1.45bn) in inflation-linked international bonds through a private placement, OHL Mexico says. The toll road operator has sold MXP8.24bn-equivaqlent in 2035 UDI-denominated bonds, and MXP10.54bn-equivalent in 2046 zero-coupon UDI-denominated bonds. The zero-coupon tranche was to priced at a “discount,” though no additional pricing info was disclosed. The issuer and its bankers declined to comment or were not available for additional comment. The tranches have weighted average lives of 19 and 28 years, respectively. Proceeds will be used to refinance existing debt. Goldman Sachs managed the 144a/RegS transaction, rated BBB/BBB. Goldman has also provided Conmex with a loan facility of up to MXP6.47bn. Conmex is an indirect wholly-owned subsidiary of OHL Mexico, and is its largest asset in terms of kilometers, toll revenue and Ebitda generation. It operates the 155km Mexico City Beltway under a 30-year concession.
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Harvest Exits Venezuela
Harvest Natural Resources has agreed to sell its 32% Venezuela’s Petrodelta in Venezuela to Argentina’s Petroandina for a total of $400m, it says. In the two-step deal concluding exclusive negotiation that started last month, Harvest is to sell its 80% interest in Harvest-Vinccler Dutch Holding (HVDH). Harvest would sell 29% of HVDH immediately for $125m, and sell the remaining 51% for $275m during 1Q2014. Proceeds of $330m will be used to pay Harvest’s long-term debt with the remaining proceeds used for working capital. The deal is expected to close by mid-year 2014. Bank of America Merrill Lynch advised Harvest.
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Vene Dropped Again
Venezuela has seen another rating downgrade, this time to Caa1 from B2 by Moody’s. “Venezuela is facing increasingly unsustainable macroeconomic imbalances, including a skyrocketing inflation and a sharp depreciation of the parallel exchange rate. As government policies have exacerbated these problems, the risk of an economic and financial collapse has greatly increased,” the agency says. Inflation is “out of control” at more than 50%, and the parallel exchange rate has reached, 64 VEB/USD, or 10 times the official rate. Sovereign yields have reached more than 15% in early December from less than 10% in mid-May, suggesting the country’s ability to access markets has been “severely curtailed.” The outlook is negative. The move follows an S&P downgrade last week to B minus.
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CFR Sweetens SA Bid
CFR Pharmaceuticals has increased its cash and stock takeover offer for South Africa’s Adcock Ingram by 1.6% to ZAR12.8bn ($1.23bn), it says. The Chilean’s offer is up from ZAR12.6bn and comes as it faces competition from South African conglomerate Bidvest, who has increased its holding in Adcock to 6.8%. CFR’s bid comes at ZAR74.50 per share, up from ZAR73.51, and contemplates ZAR6.4bn-ZAR8.2bn in cash, and ZAR4.6bn-ZAR6.3bn in CFR shares. CFR claimed the support of shareholders holding 53% of Adcock as of last month. It needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.
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Hydro ABS Approaches Pricing
The Reventazon hydroelectric project sponsored by Costa Rica’s Instituto Costarricense de Electricidad (ICE) has opened bids from investors for a planned $415m cross-border corporate securitization of a project loan, according to people familiar with the plans. The 20-year senior secured RegD/RegS notes, issued by the Reventazon Finance Trust (RFT) entity, are backed by a 100% participation interest in a 20-year B-loan from the Inter-American Development Bank (IDB), according to ratings reports. Allocation of bids was expected to take place during the early part of this week, with settlement to take up to a month. The B-loan is part of the secured debt which finances the design, construction, future operation and maintenance of the 305.5 megawatt Reventazon hydroelectric power plant in Costa Rica. The project has been structured so that construction, operation, and other risks are covered by ICE. The notes begin amortizing in 2017, and benefit from a debt service reserve account equivalent to the next principal and interest payment due amount. BNP Paribas is managing the transaction, rated BBB minus/Baa3 and which was aiming to complete pricing this month. The total project cost is $1.4bn, according to the IDB, with funding also coming from a $475m equity contribution from ICE, a $200m IDB A-loan, $100m IFC loan and $218m in domestic bank debt, according to Moody’s. Reventazon is expected operational in 2016.