The US Export-Import Bank has authorized $1.2bn export financing for Mexico’s Pemex, it says, which the oil producer will seek to use in the form of guaranteed bonds. Pemex anticipates 4-7 such US Ex-Im guaranteed issuances in the capital markets in the next few months for up to $1bn, but does not offer additional details. In the event bond funding is not feasible, US Ex-Im could provide direct loans. The package also includes a $200m facility to support purchases from US small businesses. Proceeds would fund oil and gas exploration projects.
Category: Regions
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Paraguay on Negative Watch: S&P
S&P has placed Paraguay’s BB minus rating on CreditWatch negative, it says, following the impeachment of President Fernando Lugo last week. The move “reflects the rising credit risks due to the possible political and economic ramifications of the abrupt change in government, and the exit of key economic officials in the government – specifically Finance Minister Dionisio Borda and Jorge Corvalan, president of the central bank,” the agency says. In addition, Paraguay’s main trading partners, Argentina and Brazil, have threatened economic sanctions that, if put in place, would damage economic prospects and lead to worsening fiscal and external indicators. S&P expects to make a judgment on the rating within 3 months.
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Bermuda Whispers
Bermuda is whispering in the low to mid UST+ 200bp range for the yield on a new benchmark-size long 10-year bond, according to sources following the transaction. The island nation wrapped up fixed-income investor meetings on Monday and could price as early as today. The sovereign has an Aa2/AA minus/AA+ rating. HSBC is managing the sale. Bermuda’s previous visit to the DCM was its first, raising $500m in 2020 bonds in 2010, at a 5.603% yield. The bonds were heard trading around 3.40%, or UST+195bp, Monday.
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AB InBev Seen Gunning for Rest of Modelo
Mexico’s Grupo Modelo is in strategic talks with Anheuser-Busch InBev, to expand its current relationship, it says, leading to speculation that a takeover is in the works. Analysts say a deal for all of Model or for control of it would make sense for AB InBev, which already owns a non-controlling 50% stake in Modelo. “It would be a very logical purchase for AB InBev,” says an equity analyst who covers the company, nothing that the market has long expected it. The value is seen as coming with at least some premium to the 11x-13x Ebita multiples seen in recent Beer mergers, including SABMiller-Fosters and Heineken-Femsa. A valuation of 15x for Modelo would imply a price of roughly $14bn, the analyst notes. Estimating the value is difficult, as it is unclear if the possible deal would include payment to Constellation Brands to buy a stake in a distribution joint venture. “A take-out price would be closer to $15bn, equating to a 30% control premium (in line with historical average brewing sector premiums),” Citi says in a report. The bank calls the potential deal strategically “excellent,” noting tremendous upside in Mexico’s beer market and would be 1% accretive to AB InBev’s earnings in year 1. “These discussions may or may not lead to a consummation of a transaction and any speculation on the terms and conditions is premature,” Grupo Modelo says.
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BCP Preps Mexican Domestic Bond
Banco de Credito del Peru, through its Panama branch, is preparing to sell bonds to be denominated in pesos, UDIs or USD in Mexico’s domestic market, according to a regulatory filing. The bonds will represent the first issuance from a MXP10bn program and pay a fixed rate or spread to TIIE benchmark. The net proceeds of the issue may be used by BCP to meet its operational requirements including funding its lending operations. Further details were not provided. Banamex and Deutsche Bank will manage the first issuance, with expected ratings of AAA on a national scale.
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Kuo Prices Domestic Bond
Mexico’s Grupo Kuo has priced a MXP700m ($50m) bond in the domestic market. The 2019 pays TIIE+220bp, and came wide to 200bp guidance. Proceeds will be used to for the group’s working capital. Kuo has holdings in the consumer goods, chemical and automotive industries. IXE managed the transaction, rated A on a national scale. Kuo’s previous local issuance was a MXP700m 2015 bond that came at TIIE+260bp.
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BTG in Russian Partnership
BTG Pactual has agreed to a strategic alliance with Russia’s VTB Capital, it says, to explore opportunities between Russia and the LatAm countries. The Brazilian bank, whose private equity operation is preparing an African investment fund, says the move will allow its clients to explore a diverse investments options in other emerging markets. No specific details were disclosed.
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Australians Partner with Vale for Wind Project
Vale and Australia’s Pacific Hydro have agreed to invest BRL650m ($314m) to build two wind farms in northeastern Brazil, the Brazilian miner says. Each company will own 50% of the project located in Rio Grande do Norte state, and scheduled to be online in 2014. Vale said it will be the sole offtaker of the power for a period of 20 years. The partnership is to be the first free market and self-producer commercialization model for wind farms in Brazil, Pacific Hydro says, and represents a model allowing the Brazilian wind market to expand beyond the regulated energy auction market.
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Glencore to Lose Bolivia Mine
Bolivia’s government has nationalied Glencore International’s Colquiri mine, Glencore says, with immediate effect. The move comes after negotiations to increase the government’s take of the profits to 77%-79% fell through. Colquiri has been developed and operated by Sinchi Wayra, a company owned by Glencore, since 2005. Last year, Glencore withdrew a $475m offer for CST Mining Group’s interest in Peruvian copper project Mina Justa, following a failure to agree on an offtake deal. In May, Bolivia’s government nationalized its electricity grid, with the government’s Empresa Nacional de Electricidad (ENDE) absorbing 99% of the shares of Empresa Transportadora de Electricidad, previously owned by Spain’s Red Electrica.
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Aeromexico Gets Exim Funds
The Export-Import Bank of the United States (Ex-Im) has approved two final commitments for $171m in guaranteed peso-denominated loans to Aeromexico, it says. Proceeds will support the export to Aeromexico of passenger aircraft, as well as various goods and services to be provided by a variety of US exporters. The guaranteed lenders are Banamex and HSBC. It does not disclose further details. The transaction effectively triples Ex-Im support for Mexican aviation companies purchasing goods and services from US companies, the bank says. Earlier this month, Delta finalized a $65m investment in the Mexican carrier.