Mexico’s Desarrolladora Homex is preparing to sell bonds internationally for the first time since 2009 after scheduling a 2-day roadshow to market what is expected to a $300m 5-year bond. This comes in the wake of a successful $500m 10-year non-call five last week from homebuilding peer Urbi, which generated a book of $2.5bn from over 170 accounts. Homex begins meeting investors in Los Angeles and London today and heads to New York and Boston on Wednesday. Credit Suisse and Deutsche Bank are managing the process. Proceeds from the proposed issuance will be used 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.
Category: Regions
Colombia Surprises with Rate Hike
Colombia’s central bank has gone against market expectations and raised the benchmark interest rate by 25bp to 5.0%. The bank says 3Q growth numbers were higher than expected, and “bank lending continues to show high levels of growth.” Average inflation passed 3%, and is expected to increase, the bank adds.
UNE EPM Names President
Marc Eichmann has been named president of UNE EPM Telecomunicaciones, effective February 1, the telecom unit of utility EPM says. He was last manager of planning and new business at Gas Internacional, with previous experience at Movistar and Enron. Eichmann replaces David Escobar Arango, who had been filling the role in the interim following the resignation of Horacio Velez de Bedout in December.
Peru Port Operator to Try IPO Again
Peruvian logistics company Andino Investment Holding (AIH) expects to price a $50m-$60m IPO on Thursday after cancelling an initial sale that had been scheduled for January 19. The port and logistics operator is looking to sell 15m-30m shares, and is expected to price at around PES5.00 ($1.86) per share. Proceeds are be used to reduce debt and for expansion projects. BCP is managing the sale. AIH borrowed $85m from Goldman Sachs last year to purchase fellow port operators Neptunia and Agencia Maritima.
Mitsubishi Buys Brazilian Grain Stake
Mitsubishi has agreed to purchase a 20% stake in Grupo Los Grobo’s Ceagro do Brasil unit, one of Latin America’s top grain producers, for about JPY3.5bn ($45.61m).
Recently appointed Ceagro CFO Antonio Oliva Neto tells LatinFinance that the deal brings important synergies to the business. Ceagro focuses on financing producers, production, storage and supplying the local market, while Mitshubishi is active across the value chain from ports right down to the final consumer through supermarkets and fast food chains. “Ceagro will benefit from new business opportunities and be able to reach new markets,” he says. Mitsubishi is expected to purchase the stake through a capital increase. Ceagro currently operates in Brazil, Argentina, Uruguay and Paraguay and seeks to leverage the Mitsubishi deal to become a centralized grain originator in the countryside and also to export grain to new destinations. Ceagro officials declined to offer any additional details of the transactions. Officials at Mitsubishi could not immediately be reached for comment. Mitsubishi has been an active participant in the agricultural business in Latin America. Last year, the Japanese company had a hand in exporting more than 10m tons of grain from the USA, Brazil, Argentina and Australia to its customers in several Asian countries.
Urbi Upsizes on Bid for Yield
Mexico’s Urbi Desarrollos Urbanos sold $500m in new 10-year non-call five bonds Friday, upsizing from a minimum $300m on the back of $2.5bn in demand from over 170 accounts. The Mexican homebuilder, rated Ba3/BB minus, priced at 98.442 with a 9.75% coupon to yield 10%, as investor appetite for a higher yielding instruments allowed it to squeeze levels tighter from initial talk of 10.25% area to final revised guidance of 10%-10.125%.“The credit did very well in a market that is receptive to high yield names,” says a DCM banker away from the deal. Even then, final pricing offered a nice pick-up to Urbi’s 9.5% 2020s, which now only have an 8-year tenor but were trading as tight as 9.10% last Thursday after actually rallying last week. “With the outstanding 2020s trading at 9% area, this is attractively priced,” says one EM portfolio manager following the name. Another investor found Urbi fairly priced and to be one of the best credits in this sector, but still opted out because he found more value in Javer. “We could have the new Urbi bonds for 10% or buy Javer 2021s for 12%, though more levered,” the investor says. Credit Suisse, Citi and Santander managed the sale.
Colombia Seen Holding Rates
Colombia’s Central Bank is expected to again hold the country’s benchmark interest rate at 4.75% when it meets today. Bank of America Merrill Lynch, one of the shops calling for a continued pause today, sees a 50bp raise over the course of 2012.
Fund of Funds Marks First in CCD Market
AGC Controladora, a private equity manager affiliated with US-based Northgate Capital, has filed for a certificado de capital de desarollo (CCD) transaction in Mexico’s domestic market. The transaction is being called the first fund of funds in the CCD market, though it will be able to make direct investments in Mexican companies in addition to other PE funds. The private equity firm plans to raise up to MXP13bn through a 10-year fund, but is initially seeking MXP2.6bn, plus future capital calls. Regulators decision last year to allow capital calls in CCDS ended a debate that had slowed issuance for the 2-year-old asset class. Bankers are now optimistic that CCD market will resume activity at a healthier pace. The ACG fund plans to invest in a variety of sectors, but return structure varies somewhat from most PE fund-based CCDs. Investors receive their initial investment plus a preferred return equivalent to the Mexican Bolsa’s plus 500bp, before the managers take a 5% cut, with any remaining funds being divided between investors (95%) and managers (5%).Vector is managing the sale. AGC targets a closing of March 14, according to the documents, though CCD closings typically lag initial filings by several months.
Urbi Targets Low 10s
Urbi Desarrollos Urbanos (Urbi) is aiming for a 10.25% area yield on a new $300m 10-year NC5 bond, expected to price today. The Ba3/BB minus Mexican homebuilder was scheduled to finish a roadshow Thursday. Talk is wide to peer Homex, which has a 2020 trading at around 9.60%. The issuer’s outstanding 2020s have recently been trading as tight as 9.5%. BBVA, Credit Suisse, Citi and Santander are managing the sale.
Pemex Settles Differences with Repsol
Pemex has agreed to work with the management of Spain’s Repsol and to keep its ownership stake in the company. The more cooperative stance marks major turnaround for the Mexican state-owned oil company, which up until now had sought to build alliances with other shareholders to revamp management at the Spanish firm. The companies are putting together a 10-year cooperation agreement that will involve working jointly in business opportunities that arise in the upstream, downstream and LNG sectors in the Americas, as well as the downstream business in Spain and Portugal, Pemex says. In Mexico, executives from both companies will evaluate and promote joint business opportunities as well. In turn, the Mexican state oil company has agreed to maintain a stake in Repsol of anywhere between 5% and 10%, and to “support the strategic plan and structure of the current Repsol management,” Pemex notes in a statement. It currently holds a 9.5% stake in Repsol. Pemex increased its stake to 9.5% last year and struck a failed agreement with Spanish builder Sacyr-Vallehermoso, another Repsol shareholder, to force a change in Repsol’s top brass. Pemex even considered spending an additional EUR854.3m to up its Repsol stake to 12.5%, and gain a greater say in the company. The deal fell apart, however, when the cash-strapped Sacyr was forced to sell half of its 20% stake back to Repsol in late 2011. “For the moment Pemex is not considering reducing its Repsol stake. We’ve put a 5% floor as a way to give us some room to maneuver but nothing more,” a spokeswoman says. Although the Mexican oil company enjoys generous after tax cash flows, the Mexican government’s tax take is considerable and the company struggles with lower oil reserve replacement and higher leverage than its international competitors.