Chile’s Masisa expects to start a roadshow Tuesday for a domestic bond issue of up to UF2m ($94m), expected at the end of the month or in early September. The board products manufacturer can choose from a 5.00% 2017 bullet bond and a 5.30% 2033 note with a 10-year grace period. Proceeds would refinance existing debt. BCI and Scotia are leads on the deal, rated A minus on a local scale. Masisa is also heard looking next year to the international markets as an option for additional refinancing. Earlier this month, Masisa agreed to acquire the Rexcel particle board business from Mexico’s Grupo Kuo for $54m plus working capital through the close of the deal.
Category: Regions
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EPM to Receive French Loan
Colombia’s Empresas Publicas de Medellin EPM has agreed on a $338m loan from the Agence Francaise de Developpement (AFD), it says. The 15-year credit has a 3-year grace period. Further terms of the funding were not available, and EPM officials were unable to comment. EPM is the first corporate in Colombia to receive such a credit, with AFD previously providing funding to the country and also to the city of Medellin. The funding is part of a program aimed at helping developing countries address poverty, economic growth and environmental issues.
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Mexico to Issue $2bn-plus in Exchange
Mexico plans to issue $2.19bn in reopened 2022, 2044 and century bonds as a result of the tender offer in which it accepted $1.88bn principal in 15 series of existing notes, its government says. The swap increased the average life of the debt by more than two years, and lowered the costs. The sovereign expects to issue approximately $559m of reopened 2022s, $963m of reopened 2044s and $670m of re-opened century bonds. It will also pay $19m of cash to accepting holders, with the premiums varying depending on which specific bonds the holder is exchanging. The sovereign accepted $522m in six series of old 2013-2017 bonds in exchange for reopened 2022 bonds, $792m in13 series of 2013-2040 bonds in exchange for reopened 2044 notes and $568m in 14 series of 2013-2040 bonds in exchanged for reopened century bonds. Bank of America Merrill Lynch, Credit Suisse and Goldman Sachs managed the process.
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Metro Postpones Bond
The Dominican Republic’s Metro Country Club has decided to postpone a planned $150m 2019 bond, according to a banker managing the sale. The developer was aiming to price the securitization this week, following release of 14%-area price guidance last week. A need to update financial statements with fresh 2Q results, as numbers went stale Monday, and to give investors more time to analyze the credit were among the reasons for the wait. The transaction has a 3.5-year average life and is backed by flows related to the sale and operational revenues from the Las Olas, Marbella, Costa Blanca and Metro Country Club projects. “My guess is that they didn’t find the investor base and the price signal was wrong,” says a New York-based EM investor who opted out citing robust credit risks. Proceeds were destined to refinance $75m in existing debt, as well as complete current projects and fund the acquisition of land for new ones. Bank of America Merrill Lynch is managing the transaction, rated B2/B minus and done through the MCC Finance vehicle. Relying on private equity for funding, Metro tried a $110m debt placement in 2007 and again in 2008, and also attempted a 5-year $75m Reg D private placement in 2010.
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Colombian Bank Raises COP Bond
Banco de Occidente has issued COP300bn ($168m) in Colombia’s domestic bond market. The sale includes COP50bn in 2015 bonds paying DTF+1.67%, COP101bn in 2022 inflation-linked bonds paying 4.10% and COP149m in 2027 inflation-linked bonds paying 4.27%. Total demand was more than double the amount issued, and the interest rate for each tranche came in below the maximum levels set prior to the sale. The transaction raises funds for the Colombian bank’s loan portfolio. The issuance brings the unit of Grupo Aval to completion of about half of a COP3trn program. InterBolsa led the deal, rated AAA on a national scale.
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Slim RE Lands Mexican DCM Debut
Mexico’s Inmuebles Carso has raised MXP5bn ($381m) in its domestic bond market debut. The 2017 priced at TIIE+75bp, according to sources following the transaction. The real estate company spun off from Carlos Slim’s Grupo Carso holdco last year priced within TIIE+70bp-75bp guidance. While difficult to comp, it offered a premium to holdco Grupo Carso’s (AAA/AA+) MXP5bn 5-year bond priced at TIIE+53bp in March. “It priced in line with our relative value estimates,” says one Mexico-City based investor. Afores, insurance companies, retail investors and banks accounted for most of the participation, allowing the issuer to see MXP6.4bn in demand. Proceeds will be used for short-term debt refinancing. Actinver, Inbursa, Banamex, and BBVA Bancomer led the transaction, rated AA+/AA on a national scale. Mexico’s local DCM continues to see activity in August, with Thursday’s sale bringing the year-to-date total to $4.39bn-equivalent according to Delaogic data, which is down from $8.25bn at this point in 2011.Red de Carreteras de Occidente (RCO) is on the road this week with a toll road securitization and is targeting MXP6-MXP10bn divided among 15-year peso and 20-year UDI bonds. Microlender Banco Compartamos is preparing to issue up to MXP2bn ($152m) in 2017s on August 22. The CFE has also registered for a 30-bond of unspecified size.
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Puma Looks to Close Loan
Puma Energy, a subsidiary of commodity trader Trafigura, is expected to close a $330m, 5-year syndicated loan within 2-3 weeks. The funds will be used to pay for the acquisition of gas stations and storage facilities in Central America and the Caribbean from Exxon completed earlier this year. Citi is leading the deal.
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Belize Proposes Restructuring Scenarios
The government of Belize has put forth indicative debt restructuring scenarios including haircuts and maturity extensions for discussion with holders of 2029 “super bonds,” puzzling and spooking analysts. The government contemplates one scenario with no reduction of principal, a 15-year grace period, a 2% coupon and final maturity of 2062. A second sees a 45% haircut, no grace period, and a coupon of 1% through 2019, 2% through 2026 and 4% through a 2042 final maturity. A third would entail a 45% haircut, 5-year grace period, 3.5% coupon, and mature in 2042. “Overall, the government’s strategy is puzzling. On one hand, they are going through the motions in consulting with bondholders and making their case for a restructuring. On the other hand, the lowball offer will undoubtedly anger all bondholders, who would lose tremendously if they participated in such an exchange,” Scotiabank says. The proposed restructuring terms would close the financing gaps facing the country in a sustainable manner, the government says, after the government on March 19 issued a public statement announcing the commencement of a comprehensive and urgent review of its external public sector debt and contingent liabilities. “The three proposals have combinations of haircuts and coupon reductions that go beyond our worst fears. In our view, the short notice of this proposal sounds more like a threat of a credit event than a willingness to negotiate,” Citi says. The shop adds it would not be surprised if the government decides not to pay the full 8.5% coupon rate if no agreement is reached before August 20. An ad-hoc group of at least 10 bondholders representing approximately $200m formed a steering committee last month to engage the government, amid initial talk of restructuring. S&P downgraded Belize’s long-term sovereign ratings to CCC+ from B minus after the country’s Prime Minister Dean Barrow raised debt service as an election issue. Moody’s has downgraded Belize’s credit rating to Ca fro
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Peru Holds Rates
Peru’s central bank kept its reference rate at 4.25% Thursday, in line with market expectations. The bank cites near-potential economic growth as influencing the decision, and indicated it will closely monitor inflation going forward.
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CFE Plots Domestic Issue
Mexico’s Comision Federal de Electricidad (CFE) has registered to sell bonds in the domestic market, according to regulatory documents. The state-owned utility has filed for up to MXP50bn (3.8bn), and though the a size and timing of the first issuance have yet to be defined, the issuer is heard considering a 30-year sale with a 15-year average life. Banamex, BBVA Bancomer and Santander are managing the program, rated AAA.