Two units of Spain’s Acciona are set to begin investor meetings this week ahead of what bankers and analysts say would be LatAm’s first wind energy project bonds. Looking to replace debt initially done in the loan market, the BBB minus rated Oaxaca II and Oaxaca IV projects are seeking respective $164.5m and $167.5m 2031 bonds with an average life of 13 years, according to sources familiar with the process. The key for moving funding away from the bank market is the operating projects’ lack of construction risk, as well a strong track record for wind generation nearby, most notably the Eurus facility also developed by Acciona. “This model has been used in many locations around the world,” Alberto Santos, analyst at Fitch, tells LatinFinance, including the US and Europe. He says the issuers’ investment grade rating reflects the location, proven technology and Acciona’s international status. In addition to being the region’s first wind project bond, he notes it is also unusual to have two separate transactions for a pair of wind farms that are nearly identical. The most recent comparable transaction, bankers say, might be a US solar power bond closed in February. Berkshire Hathaway-sponsored Topaz Solar’s $850m BBB minus rated 5.75% 2039 bond now trades inside of 5.50%. That the CFE is locked into a 20-year power purchase agreement is another strength of the Oaxaca deal, Fitch notes. Bankers suggest pricing should be viewed as a spread to CFE, just as the recent Brazilian drillship project bonds were viewed as paying spreads to Petrobras. “Financing construction in the bank market and replacing it later in the bond market is a template we should see more of,” says a banker on the deal. This has already been done with other assets, such as the drillships, he notes, and makes sense given the limitations on bank funding in recent years. The Oaxaca roadshow begins today in Boston, and visits New York, Chicago and Los Angeles through July 24, with additional meetings pos
Category: Regions
Issuers Set to Test IPO Market
Two IPOs scheduled for today kick off a string of transactions expected to be the last equity new-issue activity before the traditional August hiatus. Louis Dreyfus Commodities’ Biosev is targeting more than BRL750m ($371m). The Brazilian is offering 41.2m primary shares at BRL16.50-BRL20.50 each, meaning a BRL877m size if done at the midpoint and a 15% greenshoe is used. Raising funds for its expansion plan and to repay debt, Biosev is expected to count on significant participation from its controlling shareholder in the deal. Bradesco and JPMorgan are global coordinators on the sale, and Banco do Brasil, Banco Votorantim, Itau and Santander are bookrunners. Mexico’s Corporacion Inmobiliaria Vesta is also testing the waters, selling 177.2m shares at MXP19.00-MXP21.00, meaning a MXP4.08bn sale at the midpoint and if a 15% greenshoe is used. Vesta plans to use 75% of the proceeds for construction of new projects and the remainder for acquisitions. Credit Suisse and Santander are managing. Thursday brings the largest of the pack, Brazil’s Transmissora Alianca de Energia Eletrica (Taesa), which is also the sale that investors and ECM bankers give the best chance of success. The Cemig-controlled transmission company’s “re-IPO” offers 20m units at BRL60.00-BRL70.00 each. This would indicate a BRL1.50bn sale if priced at the midpoint and a 15% greenshoe is exercised. The proceeds will be used for investments and expansion. Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander are managing the sale. Finally, Chile’s Inversiones La Construccion (ILC) should emerge Friday morning with pricing on an approximately $500m-equivalent IPO. The investment arm of Camara Chilena de la Construccion is offering 3.7m primary shares and 28.5m secondary shares. ILC is raising funds to capitalize its health care operations and for organic growth and acquisitions. Bank of America Merrill Lynch, IMTrust and JPMorgan are managing the sale, which includes bot
Findeter Issues in Local Market
Colombian state-owned development finance agency Findeter has sold COP500bn ($282m) in Certificados de Deposito a Termino (CDT) domestic market debt securities. A COP127.6bn 2013 tranche pays DTF+1.46%, a COP148bn 2014 tranche pays DTF+1.58%, a COP60.7bn 2015 tranche pays DTF+1.64%, and a COP163.7bn 2017 inflation-linked tranche pays 3.85%. The issuance saw demand of nearly COP682bn, and will help fund operations. Findeter, rated AAA on a national scale, managed the sale itself.
Marti Names CFO
Mexico’s Grupo Marti has named Ramon Haces Rozada as director of finance and administration, it says. He has previously worked at Calidra, Grupo Gayosso, Wal-Mart and McKinsey & Company. In June, James Paul Smith Marquez was promoted to CEO from the CFO post.
Pemex Finishes Exim Issuance
Pemex has issued another $400m in bonds backed by the US Export-Import bank, the third and final issuance under a $1.2bn program guaranteed by the American ECA. The 2022 bonds with a 5.71-year average life priced at par with a 1.70% coupon, yielding inside of 1.75%-area guidance. Proceeds from the issue will help fund payments of goods and services purchased by Pemex and its subsidiary entities from US suppliers. Credit Agricole, Goldman Sachs and JPMorgan managed the sale, aimed at US high-grade accounts. The previous two transactions in the series were executed in the final week of June. In addition to providing a cheap and diversified source of funding, the deals under the program represents the first time an issuer has issued a US Ex-Im backed structured bond for purposes outside of aviation funding, according to bankers following the trades.
Millicom Buys in Paraguay (1)
Luxembourg-based telecom Millicom International Cellular has agreed to acquire Cablevision Paraguay for $150m, it says. The buy accelerates growth in Millicom’s fixed broadband services, says a person familiar with the deal, noting that CableVision Paraguay provides television and some fixed cable services to about 470,000 households in the country’s capital. Cablevision, meanwhile, is analyzing investment alternatives for the use of funds. Millicom declined to disclose its advisors. Cablevision worked with Saenz Valiente & Asociados, Errecondo, Salaverri, Dellatorre, Gonzalez y Burgio, as well as with Estudio Caniza in Paraguay. The deal is expected to close this year, subject to approvals.
Comex Loan Moves toward Launch (1)
Mexico’s Comex plans to hold a bank meeting on Thursday in Mexico City to launch a MXP6bn ($462m) loan facility. The Mexican paint maker is preparing a term loan and revolver, with additional details to be determined this week. HSBC and Banamex are managing.
Posadas Shifts Focus to Ride Mexican Growth (1)
As part of a continuing strategy to strengthen its balance sheet and refocus on Mexico, Grupo Posadas has sold its South American hotels to France’s Accor for $275m, it says. The deal also reflects a renewed focus on Mexico’s domestic market at a time when economists are forecasting better numbers for growth in the country and in the tourism sector. “We have completed a very satisfactory transaction that will allow us to reduce our debt levels and look forward to further growth and strengthening our leadership position in Mexico,” Ruben Camiro, Posadas’ CFO, tells LatinFinance. Funds from the sale are going to be used to pay down debt and contribute to the company’s domestic growth. Posadas’ growth is likely to be organic, he says, with no plans for acquisitions in Mexico. The deleveraging process has been a long one for Posadas, which was caught on the wrong side of currency swaps during the crisis and has struggled with liquidity since. It raised MXP900m ($71m) through the sale of convertible 9.0% 2014 domestic bonds to existing shareholders in March, bringing leverage to near 6.0x from 6.8x at year-end 2011, according to Fitch, which rates Posadas B minus. Camiro says the company could look at the bond market next year, depending on maturities available and market conditions. The company has $165m-equivalent in local bonds due in April 2013. Monday’s sale proceeds will also go towards that, and the company could use the bond market to improve its maturity profile. In forecasting better GDP growth numbers in the next 5 years for Mexico, economists point to tourism as one of the many sectors that would revive with a continued recovery in the US. In fact, a recovery strong enough to draw visitors outside the US, but not strong enough to send travelers further than next door to Mexico, would suit the industry quite well. “Mexican tourism has been picking up quite interestingly this year,” Camiro says, noting growth in Mexico not seen since the crisis. A bette
Findeter Set for Local Issue (1)
Colombian state-owned development finance agency Findeter is expected to sell today between COP250bn-COP500bn ($140m-$280m) in Certificados de Deposito a Termino (CDT) domestic market debt securities. It plans tranches of 1.5, 2 and 3 years linked to the DTF benchmark, and a 5-year inflation-linked portion. Findeter is leading the issue itself, and will use the money for project finance lending. The lender is rated AAA on a national scale. The deal follows a COP400bn February sale. In that transaction, it secured rates of DTF+1.64% for a COP104.6bn 1.5-year tranche, DTF+1.74% for a COP65.9bn 2-year tranche, and 3.78% for a COP229.5bn 5-year inflation linked tranche.
Mexichem Renegotiates Bothersome Wavin Debt
Mexichem has wrapped up negations with creditors of recently acquired Wavin, it says, renegotiating terms on EUR320m ($390m) in debt. Agreeing to pay down some of the Dutch pipe makers debt, the amount has been lowered from EUR440m, according to an official at the Mexican petrochemicals producer, generating annual savings of EUR3.2m. Several restrictive covenants have also been eliminated. The official declines to comment on the interest on the debt package due 2015, noting only that 15bp-20bp have been shaved off as a result of the negotiations. Mexichem in May surpassed 95% ownership of Wavin shares, spending nearly EUR400m, and has delisted them.