Mexico’s Empresas ICA is looking to sell its ViveICA homebuilding unit, a business providing only marginal revenues and EBITDA to the builder and engineering group. “It is indeed subject to be sold, as any asset within the portfolio that doesn’t provide a substantial component to the construction division,” a source at the company says, noting ViveICA provides less than 5% of revenues and Ebitda. ICA’s Ebidta in 2011 was MXP6.59bn ($500m), according to its financial statements.
Category: Regions
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Mexican VC Closes Fund
Venture capital firm Alta Ventures Mexico has closed its first fund, the $70m Alta Ventures Mexico Fund 1, it says. Alta is looking to invest in early-stage IT, telecom, education, health and energy companies. The IFC structured and invested in the fund, along with Mexican government-backed Fundo de Fundos and the IDB’s Multilateral Investment Fund (MIF). The investment comes from 29 family offices in Mexico, and other investors included US investment firm 500 Startups, the Guadalajara Angel Investment Network and two US family offices. “This highly educated generation of Mexican entrepreneurs is poised to transform the country. Alta’s goal is to democratize early-stage capital and help the entrepreneurs capitalize on massive growth opportunities in Mexico,” says Alta founder Rogelio de Los Santos.
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Paccar Heard with Price Reference
Paccar Financial Mexico is heard looking at issuance Volkswagen Bank and Toyota Financial Services Mexico as pricing reference points for a new MXP1bn ($76m) 2015 floating-rate bond, according to an investor following the transaction. The truck leasing operation is meeting with potential buyers ahead of a tentative September 5 price date. In July, Volkswagen Bank priced a MXP1bn 2016 bond at TIIE+45bp, while Toyota raised MXP1bn in 2015 floating rate notes at TIIE+33bp. BBVA Bancomer and Banamex are managing the deal, rated AAA on a national scale. It would be Paccar’s first domestic Mexican bond since 2008.
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Sura Remains on Lookout: CFO
With M&A bankers claiming that European divestment of LatAm assets still has room to continue, Colombia’s Grupo de Inversiones Suramericana (Grupo Sura) is among those remaining on the lookout for additional financial assets, its CFO says. “The exit of European financial groups is being substituted by financial groups from Latin America and North America,” Ignacio Calle tells LatinFinance, noting that Grupo Sura remains “watchful for new opportunities that come our way.” These would be particularly in financial services, insurance, social security, savings, and investments. “Many of the large European financial groups are in the process of reducing their size and investment in the region,” Calle says. This retreat had been forced on European lenders, Calle says, not by a lowering of their expectations across the region, or by poor investments, but because “some of them have been forced by their European regulators to decrease investment.” In 2011, Grupo Sura paid $3.76bn for ING’s Latin American pension and insurance assets, funded through a COP3.5trn ($1.8bn) equity follow-on, and additional investment from strategic partners. This year, European selloffs have included HSBC unloading of operations in 3 Central American countries to Colombia’s Davivienda for $801m, and operations in Colombia, Uruguay, Peru and Paraguay, to GNB Sudameris for $400m. Spain’s BBVA is considering selling all or part of its pension units in Chile, Colombia, Peru and Mexico.
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Belize Skips Payment, Enters Grace Period
The government of Belize has entered a 30-day grace period following failure to make a $23m coupon payment due Monday. “By defaulting on the bond, we believe the government is forcing bondholders to make a difficult decision between holding out, litigation and hoping to get paid sometime down the line, or simply cut their losses and accept whatever payment the government has to offer,” JPMorgan says in a research report. An ad-hoc bondholder group formed in response to the situation, now said to include at least 30 holders representing $275m of the $543.9m outstanding of the 2029 “super bonds,” is weighing all options, according to a source familiar with its plans. As a precursor to any negotiations, the group will request of the government to make its debt sustainability analysis (DSA) public, so as to avoid a repeat scenario seen in Argentina’s sovereign debt restructuring in which the sovereign introduced aggressive restructuring terms to bondholders without disclosing a framework and analysis of the sustainability of its total public and external debt as reviewed and undertaken by the IMF, the World Bank and the debtor. The government released August 10 three possible restructuring scenarios involving haircuts and maturity extension, but has not indicated if it will pursue any of them. The bonds were trading at 29-37 Monday, according to an investor.
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Official Exits Peruvian Fish Exporter
Eduardo Castro Mendivil has left Copeinca, where he was chief strategy officer, the Peruvian fishmeal and fish oil producer says. Castro moved to that position in March after spending six years as CFO and being replaced by Jorge Ramirez. He leaves to pursue “other personal projects,” and no replacement for the strategy position has been immediately named. As CFO, Castro oversaw the company’s Norwegian equity debut and its international bond debut in 2010.
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Panama Copper Gets $1bn Boost
Canada’s Franco Nevada has agreed to provide $1bn in funding to Inmet Mining’s Cobre Panama project in exchange for future precious metals production, it says. The funds are to be delivered over a 3-year period to the project, which has total funding needs of $6.2bn. In exchange, Franco Nevada receives a percentage of the precious metals output, indexed to copper and payable in gold and silver. Cobre Panama has received 20% equity funding from the Korea Panama Mining Corp consortium, and also raised $1.5bn in the bond markets in May. The 8.75% 2022 NC4 bond came at a 9.00% yield, via Citi, Credit Suisse, BAML, JPMorgan, Morgan Stanley and RBC. The $1bn from gold-focused royalty and stream company Franco Nevada brings the total committed funding to $4.2bn, says a person familiar with the project, and Inmet is expecting to use operating cash flow to round out the funding needs. The transaction was handled by internal advisors, say sources familiar with the deal. Cobre Panama’s first production is expected in 4Q 2015.
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Peruvian Hydroelectric Project Closes Loan
The Cerro Del Aguila hydroelectric project in Peru has closed on $534m in loan financing, according to sources familiar with the process. The funding for the project sponsored by Israel Corp includes a 12-year portion paying Libor plus approximately 5.0% and divided into a $305m amortizing tranche and a $164m bullet tranche. A 15-year portion arranged by Italy’s SACE has $65m funded so far, and has space for an additional $48m post-closing. Finally, a $61.5m subordinated sponsor-funded tranche may be syndicated after closing. Israel Corp is also providing a $65m guarantee. Original mandated lead arrangers are BBVA, HSBC, Scotia and Sumitomo Mitsui, with Banco de Credito del Peru, DEG, FMO, Interbank and Intesa Sanpaolo as participant MLAs. The $900m 510-megawatt project is expected to come online in 2016. Israel Corp is active in Peru, as well as Bolivia, Chile, Dominican Republic, El Salvador, Jamaica, and Panama, and is said to be considering expanding into Colombia. Last year it raised $300m in the bond markets through its Inkia unit, to help fund various projects in the region. The BB minus/B1 8.375% 2021 NC5 bond came at an 8.5% yield.
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Brazil, Mexico Most Traded: EMTA
Brazilian bonds were the most commonly traded in EM during the second quarter, EMTA says, with Mexico coming in second. Brazilian debt saw $298bn in turnover, up from $250bn in the first quarter and from $171bn in 2Q 2011. Mexican instruments came in second, with $243bn traded, up from $231bn in the previous quarter and from $242bn in the corresponding period in 2011. The $246bn in local market Brazilian bonds during the quarter also led EM, followed by Mexico’s $216bn. Brazil’s 2021 bond, with $4bn volume, was the second-most traded individual instrument, after Russia’s 2030 ($16bn), with the Argentine Pars ($4bn) and Brazil’s 2024 ($3bn) also in the top five. EM debt trading volume overall in 2Q was $1.413trn, down from $1.58trn in 1Q 2011 and from $1.704trn in 2Q 2011.
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Markets Await Cemex Results
Cemex is expected to announce the results of its offer to creditors as soon as today, following Monday’s deadline, as it seeks to extend maturities of $7bn in debt to 2017 from 2014. In a process launched last month, the Mexican cement maker is offering lenders an exchange of their current exposure into one or more of new 9.5% 2018 bonds, new loans paying Libor+525bp, new USD private placement notes paying 9.66%, or new 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 proposed 2018 bonds are capped at $500m, 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 US$14.50 during the 90 days after April 1, 2015. The offer is contingent upon acceptance from creditors representing at least 95% of existing exposures.