Peru-based Southern Copper Corporation plans to meet bond investors in Europe, Latin America and the US starting Friday. The Baa2/BBB/BBB rated unit of Mexican miner and railroad operator Grupo Mexico will visit accounts beginning in Santiago on Friday, followed by visits to London and Lima the following Monday, and New York and Los Angeles Tuesday, before wrapping up in Boston on Wednesday. A global SEC-registered transaction may follow subject to market conditions. The senior unsecured bonds will comprise two tranches with maturities of 2022 and 2042, says Fitch, which assigns a BBB rating. Proceeds will be used for general corporate purposes including capital expenditures. Credit Suisse, HSBC and Morgan Stanley have been mandated. Southern Copper last issued in April 2010, pricing a dual tranche $1.5bn split between a $400m 10-year and $1.1bn 30-year tranche with Credit Suisse, Goldman Sachs and Morgan Stanley. The 2020 and 2040 bonds were trading at 3.5% and 5.5% in yield respectively, according to a trader.
Category: Regions
Finandina Preps Local Issue
Colombia’s Banco Finandina is poised today to round out a COP200bn ($110m) issuance program with a COP27.6bn private placement maturing May 2015, at DTF+1.99%. Corredores Asociados, Correval, Interbolsa, Bancolombia, Casa de Bolsa and Serfinco will lead the transaction, say sources familiar with the deal. The transaction will complete a program that began last August with COP72bn, followed by COP100.5bn in May. In August 2011, Finandina’s issue saw some COP97bn in demand. It sold a COP41bn 2013 tranche paying the IBR+2.09%, a COP12bn 2014 piece paying IBR+2.50%, and a COP19bn 2016 inflation-linked portion paying 4.20%. In May, it issued a COP64.7bn 2015 series paying DTF+1.85%, a COP12.3bn 2016 series paying DTF+1.99%, and a COP23.5bn 2015 series paying IBR+1.84%. The bonds are rated AA on a local scale.
CFE Roadshows MXP Bond
Mexico’s CFE is roadshowing this week for a 30-year fixed transaction with a 15-year average life, according to a banker on the deal. The state-owned utility has filed a MXP50bn ($3.8bn) program, and could issue a minimum size of at least MXP5bn. Issuance is tentatively scheduled for September. Banamex, BBVA Bancomer and Santander are managing the transaction, rated AAA.
Comex Closes Loan
Mexican paint maker Comex has closed a 5-year MXP5.36bn ($407m) amortizing term loan and 3-year MXP700m revolver, according to people close to the deal. Pricing on the loan was tied to a total debt-to-Ebitda leverage grid, at TIIE+325bp out of the box, dropping to 200bp for below 2.0x, 225bp for 2.0x-2.5x, 325bp for 2.5x-3.0x, and 375bp for 3.0x-3.5x. Lead arrangers, arrangers and co-arranger spots were available, with amounts between MXP300m and MXP800m, and fees between 45bp and 80bp. Funds are expected to be used for debt refinancing. The deal, led by HSBC, Citi Banamex and BBVA Bancomer,
closed with a total of 11 banks participating. The majority of the banks were Mexican, with a few international banks that were able to obtain funding in pesos also taking part.
Costa Rica OK to Issue
Costa Rica’s congress has given its second and final vote in favor of issuing $4bn in bonds over a 10-year period, with a maximum of $1bn per year. In what would be its first international bond since 2004, the Baa3/BB+/BB+ sovereign is expected to kick start an RFP process ahead of issuing a benchmark size 10-year. “We expect the new bond to be issued in approximately two months; the law establishes a series of time-consuming procedures that need to be completed before the new bonds can be issued,” Nomura says in a report. Costa Rica is turning to the dollar market to tap low interest rates and ease pressure on local currency financing.
Colombia Cuts Rates
Colombia’s central bank has chosen to lower the benchmark interest rate by 25bp to 4.75%, its second straight 25bp cut. The decision was unanimous, according to Citi. “We expect the CB to continue easing its monetary policy stance going forward, as the economy will continue cooling down throughout the rest of the year,” the shop says, calling for 50bp more in cuts this year.
New Finance Minister Tapped following Echeverry Surprise
Colombian president Juan Manuel Santos has named Mauricio Cardenas as the country’s new finance minister after the resignation of Juan Carlos Echeverry. The well-respected Echeverry was a surprise late inclusion to Santos’ cabinet reshuffling last week. “This announcement came as a surprise as the only movements expected by local political analysts were related to the ministries of agriculture, environment, transportation and interior. Although this announcement took us by surprise, we believe Mr. Cardenas is a suitable and adequate candidate for this job,” Citi says in a report. The shop notes that the change does not affect the positive trend and results displayed in the fiscal front over the last years, which include a series of key reforms passed on Echeverry’s watch. Lately, he had started to oppose directions in monetary policy, Itau says, calling for greater intervention in the foreign exchange market. In the last two weeks, the finance ministry itself started to buy dollars, in parallel to the central bank’s $20m-a-day program. Cardenas had been the energy and mining minister, and has also served as transport minister. “His arrival suggests an easing of the strife between the finance ministry and the central bank, putting the latter again at the helm of exchange rate policy,” Itau says.
Mexican Radio Closes Loan
Mexican broadcasting company Grupo Radio Centro (GRC) has closed a $90m senior secured term loan, according to people familiar with the process. The facility includes a $52m 5-year and $38m 7-year tranche each offered in USD and pesos. The 5-year tranche pays Libor+575bp, or TIIE+525bp for those choosing pesos. The 7-year, meanwhile, pays Libor+675bp, or TIIE+625bp. Proceeds will be used to finance GRC’s acquisition of US-based KXOS-FM from MS Communications. Credit Suisse led the transaction, which was being offered at $10m and $20m. Actinver, Bancomext, HSBC and Monex participated.
Casino Increases GPA Position
French retailer Groupe Casino has increased its stake in Wilkes, the holding company that controls Brazilian retailer Grupo Pao de Acucar (GPA), it says, after the family of Brazilian businessman Abilio Diniz exercised a put option. Casino now controls 52.5% of voting rights in Wilkes and 70.4% of its shares. Casino wrested control of the supermarket operator earlier this year, ousting Diniz, who retained the option to sell down his position.
Codelco, Anglo Settle Mine Fight
Codelco and Anglo American have ended their dispute over a Chilean mining complex, Codelco says, with Chilean miner ending up with a lower stake than it wanted, but at a discounted price. The $2.9bn deal for a piece of Anglo’s Anglo American Sur (AA Sur) unit comes the day before a court-imposed deadline. Anglo reduces its ownership to 50.1% from 75.5%, while Codelco and its financing partner Mitsui come away with a 29.5% stake, below the 49% it originally sought. In the first piece of the transaction, Codelco-Mitsui JV controlled by Codelco acquires a 24.5% stake in AA Sur for $1.7bn, representing a consideration of $1.8bn, adjusted for dividends paid in 2012. Codelco also receives some undeveloped properties from AA Sur. Separately, the JV gets another 5% of AA Sur for $1.1bn, with 4.1% of that coming from Anglo partner Mitsubishi, who retains 20.4%. Anglo American also pays Mitsubishi a $40m fee for its participation in the agreement. The transactions will be settled in cash and Anglo American intends to use the proceeds for general corporate purposes. Cleary Gottlieb advised Codelco and Shearman & Sterling advised Anglo American. Codelco had initially wanted to exercise a decades-old option to purchase 49%, and last year signed financing agreement of up to $6.75bn with Mitsui to fund the buy. Anglo agreed in November to sell 24.5% of the mine to Mitsubishi for $5.4bn, in an attempt to thwart Codelco’s exercising of the option. The two sides paused court proceedings in May to allow for talks. Mitsui is now lending Codelco $1.86bn for one year, and will have a 17% stake in the JV that can increase by 15.25% if it offers long-term financing.