Mexichem has launched a cash tender offer targeting its $350m outstanding in 8.750% 2019 bonds, it says, ahead of what is expected to be a $1bn sale of new 2022 and 2042 bonds this week. The chemicals producer is scheduled to meet today and Tuesday with investors in London, New York, Los Angeles and Boston. The issuer plans a $700m 2022 bond and $300m 2042 bond, according to rating agency reports assigning Ba1/BBB minus/BBB minus ratings to the proposed deal. In the tender, Mexichem is offering holders $1,245 per $1,000 cash, which includes a $30 consent payment to holders that tender and adopt proposed covenant amendments before the September 13 deadline. Moody’s moved the outlook on Mexichem to positive from stable due to the refinancing, noting the credit’s strong credit metrics, improved business profile and relatively strong industry conditions in its major Latin American markets. Proceeds from this week’s bond sale will be used to fund the tender and to refinance other debt, including $600m borrowed under a $1bn revolving credit facility. Citi, HSBC, JPMorgan and Morgan Stanley are handling the tender offer, the new bond sale, and an upcoming equity follow-on expected to raise as much as $1bn.
Category: Regions
CR Refiner Looks for Debt
Costa Rican state oil refiner Recope is preparing up to $200m-equivalent issuance in the domestic and other Central American bond markets, it says. After receiving regulatory approval, the issuer plans a $50m tranche this year, and the remainder next year and 2014. The proceeds will be used in the development of several projects, including expansion of the Moin terminal. The issue is rated AAA on a national scale.
Mexico Holds Rates
Mexico’s central bank has again held the policy rate, which has been at 4.50% since July 2009. Citi notes “a slightly more hawkish stance” from the bank, citing that “in particular, the board opted for changing the wording of its policy paragraph by stating that it will remain watchful of inflation determinants as they ‘may make advisable’ to hike the policy rate.” Nomura, however, calls the hawkish tint a bluff. “A scenario of hikes, with the US economy decelerating, is very unlikely,” it says.
Colombia’s Popular Set to Issue
Banco Popular will look to issue COP250bn ($139m) in Colombia’s domestic bond market, with the ability to upsize to as much as COP400bn, according to a source familiar with the transaction. In the sale expected September 19, the Colombian bank can choose from fixed-rate 18-month, 2-year, and 3-year tranches as well as a 5-year inflation-linked tranche. Popular will self-lead the deal, rated AAA.
S&P Revises Guatemala Outlook
S&P has revised the outlook on Guatemala’s BB rating to stable from negative, it says. The agency highlights the potential for debt stabilization at 20% of GDP in 2014. GDP growth and tax revenue developments could help the republic’s finances going forward, says S&P, which in August 2011 took the outlook to negative alongside comments that increased political polarization was hindering needed fiscal reform amid low tax revenues and an increasing interest burden.
Pemex Launches Revolver Renewal
State-owned oil producer Pemex has launched a 5-year $1.25bn senior unsecured revolving credit facility, to renew an existing facility of the same size, according to people familiar with the process. The unfunded transaction offers commitment fees of 45bp and lead manager tickets of $75m at 70bp, and would pay Libor+115bp if used. More than 25 financial institutions attended a bank meeting Thursday in Mexico City, with a second to be held Monday in New York. MLA spots were by invitation only, with BBVA joining for $100m ahead of the meeting. Credit Agricole, HSBC, JPMorgan, Mizuho and Sumitomo Mitsui are bookrunners. Pemex is rated Baa1/BBB/BBB.
Aruba Returns with Size
The government of Aruba has completed a $253m 2023 bond sale, in its first visit to the DCM in four years. The island sovereign saw about $1.9bn in orders for the deal offering a far more liquid size than its previous transactions, all under $60m, according to Dealogic data. The A minus/BBB credit priced at par with a 4.625% coupon to yield UST+295.6bp and in line with 4.625%-area guidance revised from an earlier 4.875%-area. Aruba had also whispered 5.0% during a US and European roadshow. Investors who had found Aruba cheap in its previous deals were disappointed by the tightening on the new transaction, with the 5.0% level seen as very attractive and final pricing seen as reasonable or modestly attractive. The deal was thought to offer investors at least 100bp pickup to better-rated Bermuda (Aa2/AA/AA-) or Cayman Islands (Aa3), and priced perhaps 25bp through a hypothetical new Bahamas (A3) curve, according to bankers familiar with the sale. The deal traded up 1.5 points in the grey, investors say. US and LatAm investors were heard driving the bulk of demand. The bond, with a 10-year average life and three equal amortizations in 2021, 2022 and 2023 raised funds to repay certain debt obligations and for general budgetary purposes. Credit Suisse and UBS managed the sale.
Bancoldex Wraps up Domestic Issue
Bancoldex has raised COP700bn ($388m) in Colombia’s bond market, according to a source following the sale, getting nearly 2x demand. The development bank issued a COP100bn 2014 tranche at DTF+1.47%, a COP100bn 2015 tranche at DTF+1.59%, a COP261bn 2019 tranche at IPC+3.87% and a COP239bn 2022 tranche at IPC+4.02%. The bank self-managed the sale, rated AAA on a national scale, with a group of other brokerages.
Peru Holds Rates
Peru’s central bank kept its reference rate at 4.25% Thursday, in line with market expectations. Goldman Sachs pointed out ahead of the decision that the rate had remained unchanged since May 2011. “The MPC is likely to sound relatively comfortable with the inflation outlook, expressing confidence that inflation will converge to within the target band during the remainder of the year despite what it perceives to be a weather-driven ‘temporary’ surge in agricultural commodity prices,” the bank says.
Inmet Moves for Panama Gold
Inmet Mining plans to make an offer to acquire all of the outstanding common shares of Petaquilla Minerals, a Panamanian gold mine operator, for CAD112m ($110m), it says. The Canadian miner active in LatAm is offering CAD0.48 cash, or 0.0109 Inmet shares, per Petaquilla share. The proposal would contemplate a spinout of Petaquilla’s assets in Spain to Petaquilla holders, allowing them to keep the potential upside of Petaquilla’s only asset outside Panama. Assuming the spinout, that offer represents a 37% premium to the Petaquilla closing price on Wednesday and a 30% premium to the 20-day average price. The offer is open for 35 days and requires acceptance from 50.1% of Petaquilla holders. Dundee is advising Inmet. Inmet is developing the $6.2bn Cobre Panama copper-gold project, which is adjacent to Petaquilla’s Molejon gold mine.