French insurance group AXA was seen paying a reasonable price to acquire control of Colpatria’s Colpatria Seguros insurance business, in a EUR259m ($346m) transaction that is the latest M&A deal in a busy and often expensive Colombian FIG sector. The move represents about 13x earnings, analysts say, which puts it in line with deals AXA and other global powers have done in the emerging markets. “It’s a reasonable and rather attractive transaction given the growth prospects in this market,” Daniel Bischof, analyst at Helvea tells LatinFinance. He says the 13x figure compares to a 10x figure in Zurich Financial’s $1.67bn purchase in 2011 of Santander’s LatAm insurance operations, and a 15x-16x level seen in the $879m purchase by Allianz of Turkey’s Yapi Kredi Sigorta earlier this year. “Paying 13x for a number four position in a fast-growing market where the target is making money is attractive,” Peter Eliot, analyst at Berenburg Bank tells LatinFinance. Colpatria Seguros is Colombia’s fourth-largest insurance company, with a market share of 7%, AXA says. The move is in line with a previously communicated emphasis on EM growth markets. The transaction, reached through a controlled auction process, is subject to the usual regulatory approvals and is expected to close in 2014. UBS advised Colpatria, according to a person with knowledge of the transaction, with Simpson Thacher & Bartlett and Gomez-Pinzon Zuleta as legal advisors. JPMorgan advised AXA, with Debevoise & Plimpton as legal advisor.
Category: Regions
Cabei Back for More Francs
The Central American Bank for Economic Integration (Cabei) has raised CHF275m ($299m) in dual-tranche bonds, according to a person familiar with the deal. A CHF130m 2016 bond priced at 100.28 with a 0.625% coupon to yield 0.665%, or mid-swaps+45bp. A CHF145m 2019 bond priced at 100.65 with a 1.500% coupon to yield 1.465%, or mid-swaps+65bp. Proceeds will be used for general funding purposes. Credit Suisse managed the transaction, rated A/A2/A. Cabei now turns to the Mexican domestic bond market, and is looking at a $150m-equivalent bond with a tenor of 3 or 4-years. Cabei is also targeting a $50m 15-year bond through a private placement in the dollar market before the end of the year. Looking farther ahead, Cabei is considering issuance in a range of other international markets, including Australian dollars. In January, Cabei raised CHF150m ($164m) in new 2020 bonds, in its first deal in Switzerland since 2010.
Guatemalan Clinches A/B Loan
Banco Agromercantil de Guatemala (BAM) is receiving a $100m senior unsecured A/B loan led by the Netherlands Development Finance Company (FMO), it says. A $50m, 7-year tranche from FMO and Germany’s DEG comes at Libor+425bp. A $50m 5-year commercial bank tranche pays Libor+400bp, and includes participation from Westtrust Bank, Davivienda El Salvador, Global Bank, Interbanco, Banco Aliado, Banco Ficohsa and BICSA. Their participation levels were not disclosed. The loan will be used to enhance BAM’s long-term lending capabilities, with a focus on renewable energy projects, as well as SME and private sector growth in Guatemala and Central America.
Vale Cutting Aluminum Stake
Vale is preparing to sell a stake of as much as 12% in Norwegian aluminum producer Norsk Hydro, it says, which could fetch more than $1bn. Vale is selling up to 246m shares, including an overallotment option, through an accelerated bookbuilding process launched Monday. The block of shares would be worth NOK6.63bn ($1.08bn) at Monday’s NOK26.96 closing price. Morgan Stanley and DNB are slated to manage the transaction, according to a person familiar with it. The sale could take Vale’s stake in Norsk to 201m shares, or 9.7%, and is part of a divestiture plan to help the Brazilian miner cope with lower commodity prices that have meant leaner profits. In September, it sold stakes in its VLI cargo unit to a Caixa Economica Federal fund and Japan’s Mitsui for a total of BRL2.71bn ($1.2bn). This followed $1.47bn of divestments in 2012. Vale’s 22% position in Norsk Hydro comes from a $5.27bn 2011 sale of its bauxite and aluminum assets in Brazil to Norsk.
AIH Discloses Demand
Peru’s Andino Investment Holding (AIH) saw $142m in total demand for its $115m 2020 bond issued last week, it says. The issuer widened pricing last week to a final 11% from earlier 10%-area indications, and issued less than the anticipated $130m size Thursday. The B+/BB minus issuer priced at par with a 11.0% coupon, according to people following the sale, which had initially been expected to price Wednesday. The trade and transport-focused holdco is raising funds to help repay $86.5m in bank debt and finance $43.5m in capex. Bank of America Merrill Lynch, Credicorp and Goldman Sachs managed the transaction. Last year, AIH raised $43m in the ECM and sold $110m in bonds at its Terminales Portuarios Euroandinos unit, in a sale managed by Goldman Sachs.
Peruvian Brings Novel Hotel Securitization
Peru-based property owner Inversiones La Rioja has priced a $40m domestic market securitization, according to people following the transaction. The 20-year notes with a 10-year grace period are backed by the cash flows and assets of the JW Marriott hotel in Lima, and priced at par with a 7.28% coupon. The transaction, which drew 2.25x demand, saw strong participation from insurance companies and pension funds. Proceeds will go to developing new properties and to pay older debt. Scotiabank managed the transaction, rated AA/AA on a national scale. A person working on the deal says it is the first hotel-based bond in Peru, and likely the first single-asset hotel securitization in LatAm.
Alsea Looks for Acquisition Funds
Mexico’s Alsea has approached regulators for an equity sale, it says. The proceeds would be used to repay short-term debt used in the $627m purchase of Wal-Mart de Mexico’s restaurant unit agreed in September. It does not give additional details. Bank of America Merrill Lynch advised Alsea on the purchase. Alsea held an IPO in 1999, and has come back to the market twice, most recently in 2012 to raise $88m.
Italian Seeks Argie Sale
Telecom Italia has received an offer worth $1bn for a stake in its Argentina unit, it says. The shedding of the 22.7% stake is part of a larger plan to raise funds that included a EUR1.3bn ($1.74bn) convertible bond sale. The company does not make any comments about strategy for its largest LatAm asset, a majority stake in Brazilian mobile phone operator TIM Participacoes – which has also been the subject of speculation.
Ecopetrol Considers Equity Options
Though Ecopetrol’s $2.5bn September bond sale leaves it with a strong cash position, the state-controlled oil company will continue to look for financing, President Javier Gutierrez says at the Ecopetrol Investor Day in New York Friday. “We have enough resources for 2013 and part of the 2014. We still have the possibility to go out to the national or international markets for bonds, loans and ECAs and, finally, if we needed additional resources we may consider the possibility of issuing shares,” he says. Gutierrez adds Ecopetrol has some space to go to the market without affecting its investment grade ratings and says there is a possibility to take advantage of the additional shares it has approvals to sell, though an offering is not under immediate consideration in the short term. Ecopetrol has congressional approval to issue 20% of its capital via primary offerings, of which it has already issued 10.1% in its IPO in 2007 and another 1.4% in a 2011 follow-on. In those sales, only Colombians were allowed to participate directly, with international access available through the secondary market. Now, with the option to sell an ADR, it can target an international investor base and make a big difference in its investor base diversity. So far, the company estimates international investors own just 1.5% of its shares. In Ecopetrol’s September bond transaction, it received $12bn in orders for 2018, 2023 and 2043 bonds. Ecopetrol is carrying out its strategic growth plan through 2020 with capex of approximately $80bn with the goal of increasing production and transport capacity and modernizing existing refineries by 2020.
Paraguayan IPO Plan is Off
Dahava Petroleos is no longer on track to hold an IPO in Paraguay, what would have been a rare Paraguayan equity transaction. Paraguay’s CNV regulators denied Dahava Petroleos’ registration in January, according to CNV documents seen by LatinFinance, and officials say there has been no resolution since. Dahava claimed to have ownership of various oil concession assets in its filing, but was unable to meet officials’ requests for additional information to confirm their valuations and prove they should be counted as part of the listed entity. The issuer did not provide suitable proof of ownership of certain concession assets, the documents show. This included a concession held by CDS Energy, claimed to be worth more than $100m, for which the license had expired. Dahava spokespeople did not return requests for comment. In July, Dahava announced discussions with an “international oil company” to acquire 100% of Dahava, but has not provided an update since. Dahava had been looking to raise $100m in the IPO for an oil and gas drilling program in the Chaco basin in northern Paraguay. Paraguayan brokerage Valores, part of the Andorra-based Credit Andorra Group, had been managing the sale.