Peru’s Minsur has injected an additional $100m into its Cumbres Andinas subsidiary, via the issue of new shares, to help finance the acquisition of a stake in the Marcobre copper project, it says. The funds follow a $300m equity issuance announced last week for the same purpose. After the transaction, Minsur will hold 99.96% of Cumbres’ shares. It is already putting together a $200m loan to help with the purchase. In April, Minsur agreed to acquire 70% of Marcobre from Hong Kong’s CST Mining for $505m.
Category: Regions
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Paraguayan Bank to Test DCM
With new issuance conditions still somewhat uncertain, Banco Continental Paraguay is planning to start meeting fixed-income investors this week in Europe, Latin America and the US. A deal, to be the issuer’s first in the international markets, could follow if conditions allow. The Ba3/BB minus bank begins in Montevideo Wednesday, visits London and Santiago Thursday, Switzerland and Lima on Friday, and Los Angeles and Miami the following Monday, before wrapping up in New York June 19. The investor circuit suggests that Banco Continental may be eyeing $100m-$200m in a 5-year, 7-year or 10-year bond, though no official details have been released. Guatemalan Banco Industrial’s 2021 subordinated bond (Ba2/BB) and BBVA Paraguay’s (B+/Ba3/BB minus) 2016 are two bonds highlighted by bankers and investors as reference points for Banco Continental. Banco Industrial and BBVA Paraguay were trading Monday to yield 7.44% and 8.14%, respectively, according to a trader. Investors have been saying that markets are open only to top investment grade names if they can pick the right window. The potential transaction is heard to be backed by reverse inquiry from the US, with full meetings scheduled with both retail and institutional interest. Though plans announced over the weekend for a Spanish rescue package have improved sentiment, Greek elections looming this weekend mean borrowers run the risk of the mood suddenly turning against them once they have announced a deal. Other would-be issuers have decided to hold off on announcing transactions until after the elections. Some investors are open to hearing Banco Continental Paraguay’s story, while others say timing is not yet right for a high-yield first-timer. “I haven’t seen the credit fundamentals but this represents scarcity value, and there are not too many corporates out there,” says a London-based portfolio manager. Irrelevant of its sub-investment grade status, participation in the issuance will depend on the quality of the ba
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Unifin to Sell MXP Bonds
Mexico’s Unifin Financiera is preparing to issue up to MXP2bn ($144m) in domestic bonds, according to a regulatory filing. Ixe is leading the transaction. Unifin last raised MXP1bn in asset-backed bonds in May. The 2017 floater priced at TIIE+160bp, inside of 165bp price talk. The bonds were backed by credit receivables for automobile and equipment contracts.
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Moody’s Lifts Bolivia
Bolivia has seen its bond rating upgraded to Ba3 from B1 by Moody’s, which cites economic growth and increasing international reserves, as well as improvement in debt metrics. Its rating outlook has been changed to stable from positive, reflecting challenges in accessing the capital markets and history of policy unpredictability, among other factors. Last month, S&P raised Bolivia’s sovereign credit rating to BB minus from B+, giving the country a stable outlook, and citing Bolivia’s improvement in the government’s debt burden coupled with the country’s strengthened external indicators. The moves come as the sovereign is planning to issue $500m in bonds in the international market this year, in what would be a return after nearly a century. It has hired Bank of America Merrill Lynch and Goldman Sachs to manage a deal, initially planned for July, though unstable market conditions are forcing all potential bond issuers to reconsider.
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Honduras Upgraded by S&P
S&P has raised the credit rating of Honduras to B+ from B, S&P says. S&P cites public pension fund reform and 3%-4% GDP growth as helping keep the deficit in 2012 to about 3% of GDP. “The central bank has also taken steps to gradually float the national currency within a narrow band,” the agency says, also noting a more stabilized political environment that makes room for addressing longer-term issues and reform needs. The outlook is stable.
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Arauco Adds in Canada
Celulose Arauco has agreed to purchase Canadian wood panel firm Flakeboard for $243m, it says. The forestry unit of the Chilean Copec conglomerate claims the buy makes it the top wood panel producer in the Americas, including capacity of 2.9m cubic meters of panels per year in the US. Flakeboard operates two wood panel plants in Canada and five in the US. Arauco is funding the purchase with cash on hand, an investor relations official says, through it does not rule out a bond sale near the end of the year or early next year to replace the cash, as the company also has a maturity coming due then. Arauco did not use an external advisor. The sale, subject to regulatory approval, is expected to close in the second half of the year.
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Banxico Holds Rate
Mexico’s central bank kept its benchmark interest rate at 4.5% as global uncertainty and slowdowns continue. Still, the bank points out that economic activity is trending positive in the country. “To a large extent this is due to the dynamic performance of manufacturing exports,” it says in a statement. “We believe that, with still-healthy growth prospects, inflation running close to 3.9%, and a weaker peso, the central bank should adopt a more balanced tone,” JPMorgan, one of the many banks forecasting a hold, said ahead of the move.
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Canacol Clinches Credit Facility
Canacol Energy, a Canadian oil company operating in Colombia, Brazil and Guyana, has closed a $200m loan facility, it says. An $85m initial approved amount is to be divided in to a 3-year $30m term loan and 3-year $55m revolver, with suggested rates of Libor+2.50%-3.25%. The $30m loan is to be used to replace debt at an existing gas plant, and the remainder will be used at Canacol’s discretion to pursue new business opportunities. Scotia was MLA and administration agent, with Citi as documentation agent.
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SIPyT Preps MXP ABS Debut
Servicios Integrados de Pasaje y Turismo (SIPyT), a unit of Mexico’s Inversionistas en Autotransportes Mexicanos Servicios (IAMSA), is preparing to issue up to MXP3.5bn ($251m) in the domestic bond market. The 15-year securitization is to be issued in UDIs or pesos as soon as July, and would be a debut debt issuance. The bonds will be backed by its bus fleet and receivables from bus fleet operations. Santander is managing the deal, rated AAA on a national scale. Crecimiento Programado is structuring agent.
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Ecuador Gets S&P Upgrade
S&P has raised Ecuador’s credit rating to B from B minus, it says, citing the country’s growth prospects and the government’s willingness to pay debt. “The upgrade reflects the perceived improvement in the government’s willingness, as well as capacity, to service its debt due to improved financing options and higher oil production and economic growth prospects,” the agency says. The public sector is able sustain higher levels of investment thanks to higher levels of financing from China combined with the increased oil revenues. The government’s improved relations with private-sector investors, especially in the oil and mining sectors, demonstrate the government’s more pragmatic economic policymaking stance. Real GDP growth was 6.6% in 2011, though is expected to moderate to just under 3% in this year. Ecuador’s recent history of default and inconsistent economic policies remain as credit constraints, the agency notes. The outlook is stable.