The Inter-American Development Bank (IDB) has agreed to provide $57m in loans to Bolivia to improve rural irrigation systems, it says. The package includes a $45.7m 30-year loan with a 6-year grace period and undisclosed fixed interest rate, coming from the bank’s ordinary capital. A second $11.4m 40-year loan comes from the IDB’s fund for special operations, and has a 0.25% interest rate.
Category: Regions
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CFE Defines Pricing Expectations
Mexico’s Comision Federal de Electricidad (CFE) is looking to pay Mbonos+130bp-140bp for the 10-year portion of a domestic bond sale scheduled to price Wednesday, according to people following the transaction. The government electricity monopoly is targeting up to MXP10bn ($766m) through the 10-year fixed-rate portion and a 5-year tranche paying a spread to the TIIE. The issuance falls under a MXP100bn program, and is to be managed by Banorte-Ixe, BBVA Bancomer, Santander and HSBC. CFE’s most recent domestic bond was in June, when the issuer priced a MXP12bn ($911m) floating rate note via Banorte-Ixe, HSBC and Santander. It is rated AAA on a national scale.
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DF Preps Domestic Debt
The government of Mexico’s Distrito Federal will look to issue up to MXP3bn ($227m) in the domestic bond market November 21, according to a selling memo. The 10-year fixed-rate bonds are backed by future revenues passed down from Mexico’s federal government. The capital’s government is raising money to fund infrastructure projects and to repay debt. Santander is managing the transaction, rated AAA on a national scale. In November of last year, DF sold MXP2.5bn in 15-year bonds at 6.85%, or Mbonos+85bp.
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Fibra Looking to Go Large with Local Bond
Mexico’s Fibra Uno real estate trust is targeting MXP13bn-MXP18bn ($983m-$1.3bn) in what would be the first-ever domestic bond placed by a Fibra fund, say bankers familiar with the deal. It had initially targeted MXP10bn. The real estate fund is considering up to four tranches and may choose among a 5.5-year floating rate bond, 10-year and 20-year fixed-rate bonds and 15-year UDI-denominated notes. Proceeds will be used to refinance bank debt. BBVA Bancomer, Banamex, Credit Suisse and Santander are managing. Fibra Uno’s CFO Javier Elizalde told LatinFinance in June it was plotting a domestic bond issuance this year, with the issuer previously relying on banking lines for leverage. The fund was Mexico’s first Fibra to IPO, in 2011.
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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.
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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.
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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.
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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.
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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.
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Fresnillo Tightens Debut
Mexican precious metals mining company Fresnillo has raised $800m in its debut bond sale, tightening the 10-year bond by 25bp, while deciding against an additional 30-year tranche due to tepid demand. Despite the tightening, the BBB/Baa2 credit drew more than $4bn in orders. The silver and gold miner priced the 2023 at 99.242 with a 5.50% coupon to yield 5.60%, or UST+300bp, at the tight end of 300bp-area guidance and earlier 325bp-area talk. The bond was up 0.50 in the grey late Thursday, investors say. “There is apparently frenzy and everybody wants to participate in the deal. Fresnillo is a good credit and people can’t get enough of stable credits,” says an East Coast EM portfolio manager. “It looks cheap to US mining comps, but looks rich to fair value to other LatAm names. At 300bp, I’d rather own Volcan in Peru,” says a bond trader, noting expectations that gold and silver prices will drop in the medium to short-term. With Barrick Gold and Newmont trading around 200bp, Fresnillo offers value at 300bp, he says, but the other mining companies have a diversification component away from precious metals. Investors say there was not enough demand for Fresnillo at 30 years, and it was better to focus on having a single, more liquid tranche. The miner plans to use proceeds to fund current investments and a development plan. Moody’s Baa2 rating reflects the expectation that per-ounce gold and silver prices will remain in the range of $1,200 and $20, respectively, over the next 12-18 months, which will support operating cash flow. Fresnillo is the world’s largest silver company and second-largest gold mining company in Mexico in terms of production. Citi, Deutsche Bank and JPMorgan managed the 144A/RegS offering, listed in Ireland and governed by New York law.