Andean sovereign eyes 2014, “if not before” for debt market return, says trade minister in New York to sell mining, oil opportunities
Category: Regions
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Panama Considers LM Operation
Panama has closed an RFP process for a potential liability management transaction, according to bankers familiar with the process. The request was for a domestic or cross-border liability-management transaction as the sovereign looks to lengthen a curve. Banks now await a mandate decision. Liability management has been a strong theme for sovereigns in LatAm this year, and Panamanian officials have previously indicated they would be interested in joining in. Last year, Mahesh Khemlani, then Panama’s vice minister of Finance, told LatinFinance the sovereign had looked at its 2015 dollar bonds as a starting point. Panama, rated Baa2/BBB/BBB was last in the dollar bond market in April when it priced a $750m 40-year bond.
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Peru Holds Rates
Peru’s Central Bank has kept the country’s benchmark interest rates at 4.25%. It cites inflation and economic growth as considerations in its decision. It raised its benchmark rate to 4.25% in May 2011 and has held since. The board next meets on November 7.
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Findeter Eyes Local Bond
Colombia’s Findeter is considering the sale of up to COP400bn ($200m) in domestic bonds in November, according to people familiar with the process. The government-backed lender for investment projects is planning maturities of 2-7 years, and is raising funds to fund its operations. The sale is rated AAA on a national scale. The bank had indicated at the start of the year that it would look to issue $500m in bonds in the international markets this year.
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Grupo Phoenix Completes Loan
Colombian packaging maker Grupo Phoenix has closed a 5-year, $190m multi-currency senior secured term loan, LatinFinance understands. The facility pays Libor+400bp, and was led by joint lead arrangers Credit Suisse and JPMorgan. The transaction was said to receive 2x demand and brings in new relationships for the borrower, which has operations in the US, Mexico and Venezuela. It initially offered Colombian peso and US dollar tranches, before adding a Mexican peso tranche. Joining as MLAs are Sumitomo Mitsui, Scotia, Bladex, Davivienda, Bancolombia, and Banco de Bogota. Managers are Banco General Panama, Credicorp (BCP), Bank United of Florida, Citi and Banco de Occidente. The deal’s key selling points were the excluding of the borrower’s Venezuela risk and the matching of currencies, say people familiar with the deal. Phoenix, which counts coffee capsules and yogurt cups among its main products, is raising proceeds to refinance debt and fund Capex.
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Inbursa Aims Domestic Note
Mexico’s Banco Inbursa is scheduled to price up to MXP11.5bn ($876m) in domestic bonds November 6, according to people familiar with the borrower’s plans. The 3.7-year bond will pay a spread to the TIIE rate. The bank is raising funds to improve its liquidity profile and for general banking purposes. Inbursa is managing the transaction, rated AAA on a national scale.
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Infonavit Set for RMBS
Infonavit Total’s planned MXP9.1bn ($688m) domestic RMBS sale is expected to price around UDIbono+160bp-180bp, according to people familiar with the transaction. The Mexican government-backed lender’s 28-year UDI-denominated bond with a 6.4-year average life and backed by lnfonavit mortgages is scheduled to price today. Included in the deal is a separate MXP425m mezzanine tranche with an 8.1-year average life. The proceeds will be used for making new mortgage loans. Banamex is managing the transaction, rated AAA on a national scale. Infonavit – through the Infonavit Total unit – last sold MXP1.97bn in UDI-denominated 2040 RMBS bonds in June 2012, pricing at 4.20% via Banamex and Bancomer.
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Saba Readying Strategic Deal
Grupo Casa Saba is in “an advanced stage of negotiations” with a potential partner, it says. The Mexican pharmacy chain and distributor offers few details, noting that it is considering “strategic options,” that could include an outside investment or an M&A transaction. Nothing binding has yet been agreed. Saba is advised by Estructura Partners, according to a person familiar with the matter.
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US Manager Close to CCD
Private equity real estate investment firm Walton Street Capital was due to close books Tuesday for its Mexican certificado de capital de desarrollo (CCD) fund, according to regulatory documents, raising MXP1bn ($76m) of the MXP5bn final target. The remaining MXP4bn is to come through capital calls. The US shop is preparing a fund investing in a broad array of Mexican real estate assets, potentially including residential, commercial, industrial, retail and even hospital assets, according to a prospectus. The return structure follows the typical format for CCDs – a preferred return, in this case 8.5%, followed by an 80%-20% division of additional proceeds between investors and the manager. Walton expects 16%-20% total return for investors. Banorte-Ixe and Banamex are managing the transaction. Walton has been a co-investor in other issuers’ real estate CCDs in the past two years, including deals from Construtora Planigrupo and Finsa.
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Maduro Swaps Economy VPs
Venezuelan President Nicolas Maduro has named Oil Minister Rafael Ramirez as the country’s new vice president responsible for the economy, according to the government news agency, replacing Finance Minister Nelson Merentes. Merentes had been central bank governor until April, when he was moved to the finance ministry. He had been seen by analysts as pushing the country more towards a market economy. Ramirez has been the oil chief since 2002. Despite a selloff in the country’s bonds due to uncertainty about macroecoomic policy, analysts still see upside in the credit, as the country has the ability and willingness to continue servicing international obligations. Worries about Venezuela’s liquidity were “misplaced,” says Bank of America Merrill Lynch. “There is remarkably little in the data to suggest that Venezuela’s liquidity position is any different than what it has been during most of the past four years. We thus expect the selloff to revert as Venezuela’s capacity to service its debt obligations becomes clear,” it says. Venezuela’s 2027 bond slipped around 10 points, to just under 80 cents, at the end of September, according to data from the bank, after trading around par earlier in the year.
“The policy paralysis does not suggest a near-term credit event unless authorities draw down their stock of external liquidity (which would take around three years of import growth similar to 2012 to reach three months of import coverage),” Jefferies says.