Mexico’s Unifin Financiera is preparing to issue up to MXP1bn ($75m) in 3-year domestic bonds as early as September, according to a regulatory document. Ixe is leading the transaction, rated A/A minus on a national scale. Unifin’s last local bond was a MXP1bn 2017 asset-backed bond in May, pricing at TIIE+160bp. The bonds were backed by credit receivables for automobile and equipment contracts.
Category: Regions
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Chile, Peru Hold Rates
Chile held its benchmark interest rate at 5.00%, and Peru did the same, at 4.25%, both in line with market expectations. Chile’s central bank highlights market volatility and weaker-than-expected performances on the parts of large economies. “The statement came again neutral, with balanced risks between external developments and Internal growth/Inflation,” Nomura says, predicting a possible rate cut in Q4.
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Codelco and Anglo Want More Time to Talk
Anglo American and Codelco will ask for a second extension, to mid August, to finish discussions aimed at resolving a dispute over ownership of Anglo’s Chilean unit, Codelco says. The pair, fighting over the Anglo American Sur mine, had in May requested a pause in court proceedings to allow for talks, and pushed back the first June 22 deadline to July 17. Coldelco wants to exercise a decades-old option to buy 49% of Anglo American Sur. Anglo agreed in November to sell 24.5% of the unit to Mitsubishi for $5.39bn, which Codelco saw as an attempt to block it from exercising its option fully. “The negotiations between the two firms continue and there is still no deal between the parties,” Codelco says.
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Australians Take Brazilian Mining Stake
Australia Acquisition Corp has agreed to purchase a 9.7% stake in Brazil’s Ferrous Resources from Harbinger Capital Partners, it says. The Australian investment vehicle will swap 9.3m shares, worth about $93m, for the stake, as part of a broader $350m transaction that also involves Australia Acquisition getting Asian gaming assets. The transaction should be completed by august. Ferrous operates 6 iron ore mines in the states of Minas Gerais and Bahia. PrinceRidge advised Australia Acquisition.
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Bancomer Lands Tier 2 Debt
BBVA Bancomer has raised $1bn in 2022 subordinated Tier 2 bonds, drumming up around $3.6bn in orders. Investors appeared to see value in the issuance from the Mexican bank, considered high-quality despite troubles at its Spanish parent. The A3/BBB bond priced at 99.97 with a 6.75% coupon to yield 6.75%. The bonds traded up 1.00 point in the grey Thursday afternoon, according investors. Bankers away from the deal estimate Bancomer priced 50bp-70bp wide to the yield seen on its outstanding subordinated 2021 bonds. Lead managers, however, calculate a 40bp-45bp difference once curve extension and structural differences – most notably a feature for deferrable interest and principal upon a capital ratio or Mexican regulatory event – in the new notes are taken into account. “I think the bonds are trading cheap over the medium to long-term at 70bp-100bp wide of peers from Brazil. This is mostly likely due to parent problems,” says one investor following the deal. “Despite the BBVA portion of the name, this bank is a strong credit and the only possible wrinkle we envisage is the structure, with interest and principal potentially deferrable in the case of capital ratio or Mexican regulatory events,” says Richard Segal, EM credit analyst at Jeffries. Segal notes, however, that there is a general level of confidence in the quality and transparency of Mexican banking regulation, such that the structure shouldn’t be a major risk. At least 236 accounts participated, with asset managers driving bulk of demand, followed by insurance companies, banks and some hedge fund participation. The notes rank junior to all senior debt, and pari passu with subordinated debt and to holders of common stock, according to Moody’s. Proceeds will be used to strengthen the bank’s capital structure and for general corporate purposes. BBVA, Bank of America Merrill Lynch and Goldman Sachs managed the deal, the bank’s first in the international market since March 2011.
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Mexican VC Firm Closes CCD
Mexican venture capital firm Latin Idea Ventures has completed a MXP615m ($46m) certificado de capital de desarrollo (CCD) transaction, according to regulatory documents. Along with a parallel fund Latin Idea is raising, the CCD fund will target small investments in the telecom, media technology and service sectors. The parallel fund has had three closings and plans a fourth, with Latin Idea targeting a total fundraising of $100m-equivalent, including both the CCD and parallel funds. It will seek to make up to $15m investments – in $3m-$6m increments – in companies with competitive advantages in technology or innovation. The return structure of the CCD has investors recovering their initial investment plus a 13% preferred return, with remaining profits split 80%-20% between investors and the manager. Credit Suisse managed the CCD.
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Chile, Peru Expected to Hold Rates
Economists expect Chile and Peru to hold their rates at 5% and 4.25%, respectively. Bank of America Merrill Lynch sees a hold until July 2014. Goldman Sachs expects a repeat in the Chilean’s “somewhat neutral language.” Goldman also notes Peru’s central bank has held rates at 4.25% since May 2011.
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Moody’s Raises Fish Exporter’s Outlook
Moody’s has raised the outlook on Copeinca’s B2 credit rating to positive from stable, it says. “The outlook change reflects the company’s progress in improving its operating performance under the individual transferable quota system and expectations for a sustainable free cash generation with the conclusion of its expansion plan,” the agency says. Moody’s highlights Copeinca’s position as the second largest fishmeal producer in Peru, a successful operating history in its current business configuration; and favorable earnings prospects. Modest business diversification compared to protein-industry and regional peers, exposure to potentially volatile volume and price trends and the sensitivity of cash flows to climatic conditions, regulation and seasonality, are among the major restraints. Adjusted debt/Ebitda improved to 1.9x, in the 12 months to Q1 from over 2.4x in previous years, and interest coverage in the same period has also improved to 5.2x from 4.1x.
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Chavez Looks to Raise Debt Ceiling
Venezuela’s government hassent congress a bill to raise the country’s debt ceiling of 37%, or VEB30bn ($6.9bn), according to local news reports citing remarks from government officials. “It has become customary for the government to raise the debt ceiling at this time of the year. Although in our view, most if not all of the additional debt will be issued locally, the possibility of USD denominated debt issuance cannot be ruled out,” Citi says in a report.
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Bancomer Aims Below 7%
BBVA Bancomer is heard targeting a yield in the mid to high 6%-area for a benchmark-size 10-year subordinated Tier 2 bond, pricing as soon as today. The A1/A minus rated Mexican bank was scheduled to wrap up a 7-day roadshow in Los Angeles and Chicago on Wednesday after visiting Asia, Europe, Latin America and the US. Proceeds will be used to strengthen the bank’s capital structure and for general corporate purposes. Bancomer’s subordinated 2021 bonds, trading at 6.10% Wednesday, offer a direct comp, as do other recent Tier 2 issuances from Colombian and Brazilian banks. BBVA, Bank of America Merrill Lynch and Goldman Sachs are managing the transaction, rated A3/BBB.