Mexican regulators have decided against approving multimedia company Televisa’s purchase of a 50% stake in wireless provider Iusacell, in a deal valued at $1.6bn. The companies reached an agreement in April 2011 as a way to give Televisa access to the mobile industry and strengthen Iusacell’s business. Commissioners at Mexico’s Comision Federal de Competencia, COFECO, voted 3 to 2 in favor of blocking the transaction, Televisa says. The company says it is contemplating “several legal alternatives” to encourage COFECO to reconsider its decision. Officials at Televisa declined to offer additional comments, while officials at Iusacell could not immediately be reached for more details. Televisa says it has invested $37.5m in Iuscacell equity, and another $1.565bn in Iusacell convertible debt paying 2% with a December 2015 conversion date. Iusacell, Mexico’s third largest cellular services company, has already begun using the invested funds. At the time of the transaction, Barclays estimated the deal came in at a pricey 21x EV/Ebitda multiple, using Iusacell’s 2009 Ebitda of $150m. The Televisa’s ADRs fell 3.3% on Thursday to $19.63 following the company’s confirmation of the regulatory move.
Category: Regions
AMX Becomes First LatAm Dim Sum Issuer
America Movil became LatAm’s first borrower to tap the so-called Dim Sum market Wednesday when it issued a CHN1bn ($160m) 3-year bond. This is expected to be the first of several from the Mexican telecom giant and this year could see other LatAm corporates take a stab at the rapidly growing offshore renminbi-denominated market, bankers say. “We want to establish a more regular presence in this market with funding that can used to cover our inputs of Chinese goods,” the company’s CFO Carlos Garcia Moreno tells LatinFinance. “This is not meant to be a one-off transaction.” With America Movil’s Chinese vendor network growing considerably in recent years, the company has been looking to raise financing in a currency that better matches this commercial relationship. A similar logic prevailed when in 2009 it secured a $1bn 10-year loan from the China Development Bank. “About a year ago we prepaid that loan and at the time we saw the Dim Sum market was beginning [to grow],” Garcia Moreno says. “There was a clear intention by the Chinese government to develop the renminbi market with the idea that more people would buy more Chinese products and pay for them in the Chinese currency.” America Movil joins a select group of EM and multinationals such as McDonald’s and Caterpillar that have tapped into this asset class. McDonald’s, for instance, raised a smaller CHN200m 3-year at 3% during the summer of 2010, and more recently China Development Bank came with 3 and 5-year Dim Sum bonds at 3.10% and 3.45%.“America Movil is well-known and followed by investors globally It is a good first time issuer to lead this effort [for LatAm],” says Katia Bouazza, co-head of global capital markets, Americas at HSBC, which acted as sole bookrunner on the transaction. America Movil itself generated a CHN2bn book and priced at par to yield 3.50%, the tight end of 3.50-3.60% guidance. Marking a new twist to Dim Sum deals, AMX’s bond also registered the paper with the SEC, opening the door to a br
Molymet Buys into US Rare Earth Producer
Chile’s Molibdenos y Metales (Molymet) has acquired a 13% stake in US rare earth producer Molycorp for $390.2m. The deal involves an all-cash acquisition of 12.5m shares of Molycorp common stock, for which Molymet gets a seat on Molycorp’s board. Officials at Molycorp could not immediately be reached for additional comment, and a Molymet spokesman declined to offer additional details of the transaction. Fitch Ratings noted that the deal should not affect Molymet’s BBB rating. Following the deal, Fitch estimates the Chilean company will maintain a debt to Ebitda ratio of 1.2x, a slight increase from its 1.0x four-year average, but still within its ratings range. Molymet is a leading player in the global market for molybdenum, a metal used to produce high-strength steel alloys, and rhenium, a rare silvery metal used in jet engine production. The deal gives Molymet the capacity to produce 19,050 metric tons of oxide from rare earths, and may reach 40,000 metric tons in 2013, the company says.
Cofide Gets Sub 5% Yield
In what proved to be a positive day for the markets, Peru’s development bank Cofide was able to push pricing tighter on a $400m 10-year bond debut. Whispers of mid 300s turned into talk of 5.125% area and then to revised guidance of 5% (+/-5bp) before the deal was priced at 98.437 with a 4.75% coupon to yield 4.95% or UST plus 311.1bp. The credit was largely comped against the sovereign curve, where the 2019s were trading on a G-spread of 182bp, and against 100bp spread differential between Brazil’s own development bank BNDES and its sovereign. In the end the borrower managed to beat its stated goal of achieving 150bp over the sovereign. Books were heard reaching some $2.85bn in size, with 150 participating investors. The 144A/RegS senior unsecured issue is rated BBB and carries a change of control put at 101. Deutsche Bank and JPMorgan led.
Canadian Pharma Gulps Brazilian Sports Drink Maker
Canadian pharmaceutical company Valeant has acquired Brazilian privately-held sports nutrition product and drink producer Probiotica Laboratorios in an all-cash deal valued at BRL150m ($86.7m). The acquisition cements Valeant’s foothold in Brazil, the one market, aside from Mexico, where Valeant maintains a presence in Latin America selling its generic pharmaceuticals. Valeant didn’t contract advisors for the deal, a spokeswoman says, and it is financing the buy with part of a new $500m tranche of its 2019 senior secured term loan B credit facility, announced earlier this week. Company officials estimate that the $86.7m that Valeant is paying for Probiotica represents an EV/Sales of 1.8x. Valeant previously acquired two Brazilian over-the-counter pharmaceutical companies in 2010 — one of which was Instituto Terapeutico Delta — a deal that included the purchase of a 165,000 square foot production plant.
Codere Upsizes Debut Dollar Deal
Codere Finance priced a $300m 2019 NC3 bond Wednesday, landing its dollar debut in the international bond market. The Spanish-based gambling group with significant LatAm operations upsized from an original $250m and priced the notes at par to yield 9.250% or UST+801bp, in line with 9.25% area guidance. “It was cheap to outstanding bonds,” notes one investor following the transaction. Codere’s outstanding 2015 euro bonds were trading at 8.5% Wednesday. Demand came from EM and US high yield accounts. The gaming company is raising funds for the purchase of an additional 35.8% stake in Mexico’s Corporacion Interamericana de Entretenimiento. Codere’s Mexican unit agreed in August to buy the stake for MXP2.68bn ($217m). Codere has operated in Mexico for 13 years and is also in Argentina, Brazil, Colombia, Panama and Uruguay. Credit Suisse Barclays and Itau led the B2/B transaction. The bonds were trading 100.25 in the grey Wednesday, according to an investor.
Cabcorp Readies Pricing
The Central American Bottling Corporation (Cabcorp) is out with guidance of 7.75% area on a $150m 10-year bond, with pricing expected today. The Guatemala-based anchor bottler for Pepsi in Central America was to wrap up roadshows in New York yesterday via sole lead Citi, marketing senior guaranteed notes rated Ba2/BB/BB+. Cabcorp is controlled by the Castillo family, with Pepsico holding an 18% stake. Cabcorp expanded into the Caribbean in 2009 when it bought PepsiAmericas and its territories in Puerto Rico, Jamaica and Trinidad. As of September 30, 2011, short-term maturities only amounted to $19m, versus $85m of cash on hand, according to Moody’s.
CSN Buys German Steelmaker
Brazil’s Companhia Siderurgica Nacional (CSN) has purchased all the shares of German long steel producer Stahlwerk Thuringen (SWT) and distributor Gallardo Sections from Spanish group Alfonso Gallardo for a EUR482.5m ($636.6m) price tag, assuming no indebtedness, the company says. CSN purchased the shares through its Spanish subsidiary CSN Steel which handles the company’s European operations. Officials at CSN did not respond to several inquiries for additional comment, while SWT officials could not immediately be reached for additional details. SWT has a 1.1m ton-per-year installed capacity, which would cement CSN’s steel division in the region. The SWT acquisition is the second announced this year by the Brazilian company. In early January, CSN announced the purchase of 14.7m shares in railroad operator MRS Logistica from the Belize-based International Investment Fund for an undisclosed sum.
Homex Builds Book
Mexico’s Desarrolladora Homex emerged Wednesday with 10.25% area guidance on a $250m-plus 8-year NC5 bond on its last day of roadshows, with pricing expected today. Credit Suisse and Deutsche Bank are acting as leads. This comes in the wake of a successful $500m 10-year NC5 last week from homebuilding peer Urbi (Ba3/BB minus), which generated a book of $2.5bn from over 170 accounts, pricing to yield 10%. Like Urbi, Homex is using proceeds to refinance short-term debt, with Moody’s assigning a Ba3 rating to the issue. The homebuilder last visited the bond market in December 2009, when it issued a $250m 9.5% 2019 to yield 9.99%, through Credit Suisse and HSBC. Those bonds have been trading around 9.40% mid-market.
Cofide Quietly Builds Book on Debut
Peru’s development bank Cofide tested the waters Tuesday with mid-300bp whispers on what is expected to be $500m 10-year bond, the credit’s debut in the international markets. Pricing could come as soon as today. At that level, the borrower is in line with its long-held target of 150bp over Peruvian sovereign paper, and offers a nice pick up to Brazil’s development bank BNDES (Baa1/BBB), which has 2020s trading at around 242bp. Books were heard reaching around $500m early Tuesday, with investors expecting demand to be sufficiently strong to allow Cofide to reach its target size. The 144A/RegS senior unsecured issue is rated BBB and carries a change of control put at 101. Deutsche Bank and JPMorgan are leads.