Mexico’s Red de Carreteras de Occidente (RCO) is expected to price a toll road securitization today, in a deal raising as much as MXP10bn ($770m). The concession operator could be looking at a spread of around Mbonos+270bp for a 15-year peso-denominated tranche with an 11-year average life, and around Udibonos+270bp for a 20-year UDI-denominated portion with a 14-year average life, according to buyside sources following the process. “The deal looks interesting and the spread where they are looking to price is reasonable,” says a Mexico City-based fund manager following the trade. The deal is backed by future toll road revenues and supported by a partial guarantee from government development bank Banobras. It would be the first such sale in Mexico since October of last year, the first for RCO – winner of the 2007 road concession originally known as Farac – and would represent a sizeable transaction for a Mexican local securitization market seeking greater supply. “We are looking at the deal with a lot of interest, but we’re analyzing if we want to add more infrastructure debt in our portfolio or look to equity stakes,” adds another fund manager, highlighting the option of equity deals in a building Mexican pipeline including a follow-on from infrastructure firm Pinfra. The bond market offers a good alternative to refinancing for RCO, which has significant syndicated loan debt, according to investors following the deal. They note market conditions are more favorable this year than last for issuing a securitization of this size and tenor, with more liquidity and appetite now. The asset – offering the fastest road connection between Mexico City and Guadalajara – is not only a mature one with years in operation, but also boasts growth potential. The deal is rated AAA on a national scale. BBVA Bancomer, HSBC, Inbursa and Santander are managing the sale, with Goldman Sachs and HSBC as structuring agents. RCO raised MXP6.5bn in the CCD markets in 2009. The domestic market w
Category: Regions
Moody’s Analyst Joins Research Shop
Filippe Goossens has joined Spread Research as a managing director based in Buenos Aires, according to a source familiar with the move. He had been a corporate credit analyst at Moody’s in Sao Paulo since 2010. He had previously been at Credit Suisse, JPMorgan and financial consulting firm Breakstone Group. Spread Research is a provider of credit research focusing mainly on European high yield at convertible bond issuers that is expanding into EM corporate bond issuers.
Frisa Nears Loan Closing
Frisa Forjados could close a $150m 5-year term loan as soon as this week, according to sources familiar with the plans of the Mexican metal parts manufacturer. The loan is heard paying Libor+300bp. BBVA, Citi, HSBC and Scotiabank are bookrunners on the deal, with Comerica Bank also participating. Proceeds are expected to be used for refinancing debt.
Colpatria Eyes Domestic Bonds
Banco Colpatria could look to issue COP100bn ($56m) in subordinated bonds in Colombia’s domestic market, with the ability to upsize to as much as COP150bn, say sources familiar with the Colombian lender’s plans. The notes are expected to be sold October 5, and will most likely have a 10-year maturity and be IPC-linked. Colpatria, rated AAA on a national scale, is heard to be self-leading the sale. The upcoming issuance is not yet rated, through its most recent subordinated sale got an AA+ mark. In that sale in February, Colpatria issued COP150bn in 10-year subordinated notes paying inflation plus 4.64%.
CAF Eyes Sterling, USD
Regional development bank Corporacion Andina de Fomento (CAF) is heard considering a return to the dollar or sterling markets, according to a buyside source who was briefed on the multilateral lender’s plans. The supranational is heard considering a new 10-year USD in addition to gauging fixed-income investor appetite for a new sterling issue. “If they issue in sterling, CAF will probably have to pay another 15bp over the fair basis swaps level to get a transaction in sterling as there is an illiquidity premium attached to sterling issues though it is a high quality single A,” says the investor. Deutsche Bank is one of the banks heard working with CAF on the process. Bankers away from the process say that while CAF’s dollar bonds are performing well in the secondary – its 2022 bonds were trading at 3.30% Monday afternoon – it makes sense for CAF to diversify its investor base even if it has to pay up. “Sure the sterling market is more expensive than the dollar markets, but CAF can’t continue issuing in USD. It behooves them to look at other currencies even at a bit more of a cost,” says one banker. CAF took advantage of a recent ratings upgrade to raise CHF300m ($313m) in the Swiss market in early August. The multilateral lender’s director for financial policies and international issues, Gabriel Felpeto, told LatinFinance last month that CAF continues to analyze the USD, EUR, GBP and JPY markets, and did not rule out more CHF bonds before the end of 2012 as it seeks to diversify its funding sources. CAF is rated Aa3/A+/A+.
Cemex Completes Debt Exchange
Investor participation in Cemex’s debt exchange has reached 92.6% of existing exposures as of the September 7 deadline, it says, shy of its self-imposed 95% target but still enough to successfully extend maturities of $7bn in debt due 2014. In the operation, holders could exchange their existing exposures for three classes of new debt due 2017 and new 9.5% bonds due 2018. As the demand for the 2018 bonds exceeded a $500m cap, creditors who elected to receive new notes after the July 19 early deadline will be allocated approximately 54% of the amount they elected to receive, with the balance of their exposures allocated to the other classes involved in the exchange – new 2017 loans paying Libor+525bp, new 2017 USD private placement notes paying 9.66%, and new 2017 yen-denominated private placement notes paying 7.735%. The interest rates on the loans and private placement notes reduce over time, based on prepayment targets. The 2018 bonds are callable in 2016 and guaranteed by more than seven Cemex units. Participating creditors receive an exchange fee of 80bp, and a 50bp additional cash fee if the Cemex ADS exceeds $14.50 during the 90 days after April 1, 2015. As part of the proposal announced in June and launched in July, Cemex plans to make a $1bn paydown in 2013. If it misses the payment, the debt maturity reverts to 2014. It expects to fund the pay-down with asset sales, including minority stakes in Cemex operations in select countries, selected US and European assets and other non-core assets. A plan to raise at least $750m-equivalent through an IPO of its ex-Mexico assets is also in the works. BBVA and Citi are heard having been hired so far to manage the sale, for which the timing is unclear.
Colombian Considers Bond Markets
With an eye on continued growth in infrastructure opportunities in Colombia, Construcciones El Condor could consider issuing a bond of up to $100m in the next two to three years, Alejandro Correa Restrepo, its director of investment, tells LatinFinance. Colombia has a need for continued growth in construction as it relates to infrastructure, with a rising interest in improving road conditions and other forms of transportation, he says. The company will carefully evaluate the opportunities ahead, as it looks to sign on to projects the government is now structuring to allow private companies to propose infrastructure projects. It could also choose to proceed using its own funds, he adds. The builder completed its IPO earlier this year via Bancolombia raising COP162.58bn ($92m).
Jaguar Taps CEO
Jaguar Mining, a Canadian gold miner operating entirely in Brazil, has named David Petroff president and CEO, it says. The appointment, which also includes a spot on the board of directors, is effective immediately. John Andrews had been filling the role on an interim basis, and remains on the board of directors. Petroff was most recently CEO of Breakwater Resources from 2009 until it was acquired by Nyrstar Canada in August of last year. Toronto and New York listed Jaguar operates in the Brazilian states of Minas Gerais and Maranhao.
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.
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.