Citi led the LatAm DCM tables through the end of June, according to Dealogic, followed by HSBC and Itau. The US bank booked $12.6bn in volume from 52 deals in the first half when cross-border and local market deals are considered, ahead of HSBC ($8.2bn from 42) and Itau ($6.9bn from 41). Citi also claimed the lead when cross-border deals only are considered ($7.4bn), and when local market deals only are considered ($5.1bn). “Business has become fungible across product lines in the region, and we move pretty fluidly from one type of issuance to the other. Issuers are pretty agnostic about what they do, they just want the best terms,” Chris Gilfond, co-head of LatAm DCM at Citi, tells LatinFinance. Overall volume in the market remained on a pace to top last year’s record regional total. Cross-border volume in the region reached $54.2bn in 1H 2012, up from $45.3bn in 1H 2011, and marked the highest half-year volume on record, boosted by an aggressive first quarter. Volume with local market deals included was also higher, hitting $79.9bn, compared to $72.9bn in the corresponding period of 2011. “There is a really solid pipeline of business that should get done. It may need to wait a month or two in terms of finding the right window, but I’d expect something like second quarter volume in the third quarter,” Gilfond says. He expects DCM volume this year to exceed 2011’s total, both in terms of cross-border volume and combined cross-border and local market volume. In particular, appetite for global local-currency transactions should return, with deals appearing in between bouts of volatility. Brazil, Mexico and Peru led the region in 1H 2012, accounting for 54%, 22% and 6% of total volume respectively, Dealogic says. Citi also led in terms of DCM revenue, booking $52m, or 16.7% of the fee pool. The bank was followed by HSBC and JPMorgan, with $26m (8.5%) each.
Category: Regions
CFE Names New CEO
Mexico’s government has named Jaime Gonzalez Aguade CEO of the CFE, the CFE says. He replaces Antonio Vivanco, who steps down for medical reasons. In December 2011, Vivanco underwent surgery to remove a benign tumor from his head. Vivanco has been in the position since March 2011, when he replaced Alfredo Ayub. Gonzalez Aguade was an undersecretary of energy.
Mapfre Takes All of CentAm Holdco
Spain’s mapfre has agreed to buy the 35% that it doesn’t own in the holdco for its Central American business from Panama’s Grupo Mundial, it says. Mapfre Mundial, as the holdco is known, contains the insurer’s operations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. It does not disclose the value of the transaction, and does not respond to requests for comment. Mapfre bought the initial 65% from Mundial in 2009.
Vale Joins Euro Party
Vale has come through a Euorpean bond issuance window to raise EUR750 ($949m), a move that allowed it to diversify its investor pool and price inside its dollar curve. Coming the day after Mexico’s America Movil raised EUR1bn, the Brazilian miner, also keen to solidify its Euro curve, got about EUR1.8bn in orders. The new 2023 bond priced at 99.608, with a 3.75% coupon, to yield 3.798%, or MS+180bp, at the tight end of 180bp-185bp guidance that followed earlier 185bp-area talk. Bankers following the deal calculated a 5bp-10bp concession versus MS+170bp levels seen on Vale’s existing EUR 2018 bonds and calculated least 20-25bps inside its dollar curve. At least 170 accounts participated, according to bankers managing the sale, with investment managers driving bulk of demand at 55%, with banks at 15%, hedge funds 15%, insurance companies 10% and 5% allocated to others. In geographic terms, Germany comprised 29%, UK 26% France 16%, Switzerland 7%, and the Netherlands 5% with the rest allocated to other parts of Europe. BNP Paribas, Credit Agricole, HSBC, Natixis managed the sale. Vale, which is rated Baa2/BBB+/A minus, says it will use proceeds for general corporate purposes. It was its second-ever visit to the Euro bond market, following a EUR750m sale in 2010.
Mexican Developer Kicks Off IPO
Mexico’s Corporacion Inmobiliaria Vesta has launched its IPO, targeting about MXP4bn ($300m), according to regulatory documents. The industrial property developer plans to price July 18. It is offering 177.2m shares at MXP19.00-MXP21.00, meaning a MXP4.08bn sale at the midpoint and if a 15% greenshoe is used. The base deal includes 50.7m primary shares sold in Mexico, 88.6m primary shares sold internationally, and 37.9m secondary shares sold in Mexico by members of the founding Corona family and other investors. Vesta plans to use 75% of the proceeds for construction of new projects and the remainder for acquisitions. Credit Suisse and Santander are managing. The developer is in 11 Mexican states and specializes in light manufacturing and distribution facilities.
German Exits Chilean Highway Position
German construction company Hochtief has sold its 45.45% its stake in the Vespucio Norte Express toll road operator in Chile to a consortium led by Canada’s Brookfield for EUR230m ($276m), it says. The sale raises the Brookfield consortium’s position up from the 50% it bought last year from Spain’s ACS, as part of a EUR261m deal that also included a stake in the San Cristobal tunnel. Hochtief and its original partners received the build, operate and transfer contract in 2001, and have been operating the road since 2006. Closing is expected by year-end. Lazard advised Hochtief, and a Brookfield spokesman does not return a request for comment.
Petrobras Takes All of Texas Refinery
Petrobras has agreed to pay $820.5m to acquire the 50% that it doesn’t already own in Pasadena Refining Systems, it says, ending a prolonged legal dispute with former partner Transcor Astra over the US asset. In the deal, Petrobras pays Belgium’s Astra, controller of Astra Oil Trading, the value of a put option set in 2009. The option was the subject of a lengthy arbitration process between the two parties, which has now been resolved with the agreement. Petrobras acquired its original 50% stake in the Pasadena, Texas-based refinery in 2006 for $360m.
Portuguese Bank Hires DCM Vet
Dennis Holtzapffel has joined Espirito Santo’s investment banking operation as head of LatAm DCM, according to a source with knowledge of the matter. Holtzapffel left Jefferies in March, where he was head of EM debt capital markets and syndicate for 2 years. He had previously been at UBS and ABN Amro.
S&P Lifts Panama
S&P has raised Panama’s rating to BBB from BBB minus, it says. It expects Panama’s GDP growth to remain strong in the medium term, thanks to diversified investment, and double-digit revenue growth since 2010 has allowed the government to increase infrastructure investment without increasing its debt burden. “Panama’s economic policy flexibility is strengthening as the economy continues to grow, diversify, and gain resilience,” the agency says. S&P expects GDP should expand 6% this year and by about 4% annually through 2015. The outlook on is stable.
Cielo Expands with US Buy
Cielo has agreed to buy US payment processor Merchant e-Solutions (MeS) for $670m, it says. The Brazilian credit card payment processor was particularly drawn to MeS’s payment platform technology and its potential use in Brazil, rather than to the international expansion. The move offers Cielo diversification and better defense against increasing competition in Brazil’s credit card payment sector, which will remain its major focus. The deal was seen at a multiple of 11x Ebitda, according to remarks from Cielo’s CEO cited in local news and wire reports, and Cielo does not expect to put money into growing MeS in the US. MeS processes more than $14bn per year in transactions, with more than 250 financial institution clients, taking in $124m in revenue for the 12-month period through May 31. The transaction is being financed through Cielo’s own cash generation and prepayment of receivables from issuers, according to a spokesman. Goldman Sachs advised Cielo, and JPMorgan advised MeS.