HSBC has sold operations in 3 Central American countries to Colombia’s Davivienda for $801m, as the global bank continues to cut back in LatAm The move also marks a big step for Colombia’s largest bank in its ambitious expansion plans abroad, allowing it to grow some 20%. In the all-cash deal, Davivienda takes over HSBC’s retail, corporate, commercial and insurance businesses in Costa Rica, El Salvador and Honduras, a network of 136 branches. As of September, these businesses represented $4.3bn in assets, with $2.6bn in loans, $3bn in deposits and insurance premiums of $42m. Also operating in Panama and Miami, the Colombian bank has been assembling a war chest with the expressed intent to expand in Peru, Chile and Central America. The bank raised $375m-equivalent in a local equity follow on last year, and is considering a New York equity listing and a possible 144a bond debut this year. The deal came in at 1.4x price to book and a price to earnings ratio of 45x, says David Pelaez, an analyst with Bolsa y Renta. This means the transaction fell below the average 3x price to book seen on deals in Colombia over the past year, according to Bolsa y Renta. The transaction had been in the works for some time, as HSBC has sought to divest assets in the region including a still pending sale of its property and casualty insurance business in Argentina and Mexico. Officials at HSBC would not comment on the CentAm sale or their other pending deals. Davivienda officials could not immediately comment further. HSBC’s own investment banking arm advised it on the deal, and UBS advised Davivienda. Last year, HSBC began searching for potential buyers for three separate blocks of LatAm assets. This included its property and casualty insurance business in Mexico and Argentina for a price tage of roughly $1bn, according to people with knowledge of the plans, as well as its Central American banking units and its consumer finance arm in Brazil. Last month, Brazil’s Bradesco expressed intere
Category: Regions
HY Port Seeks $180m Bond
Dominican port terminal Caucedo is targeting a $180m 2022 bond, according to Fitch, which assigns a BB minus to the international debut roadshowing this week and next. A North American, European and LatAm roadshow is scheduled to end Tuesday. Proceeds from the issuance are to go toward refinancing $97.8m in outstanding debt, capex, and yard infrastructure and dredging improvements. They are also going to pay $50m in dividends to shareholders and to fund an interest reserve account. Managed by DP World and located in PuntaCaucedo, 25km from Santo Domingo, the port is one of the largest port terminals in the Caribbean and the biggest container port terminal in the Dominican Republic. Bank of America Merrill Lynch, Citi and JPMorgan were mandated to take the credit on the road.
Investors Discuss Aval Levels
Grupo Aval is set to price a benchmark 5-year bond as soon as today after investors were heard discussing a 5.5% – 5.75% levels on Tuesday. “In Colombia there is plenty of appetite for paper and this is a top name, so I would assume that pension funds will have a strong bid for it, so it could come closer to 5.5%,” says one investor. The Colombian holding company, which has been rated Baa3 by Moody’s, wrapped up investor meetings in New York and San Francisco Tuesday. The debut issuer is heard being comped against Grupo Aval’s banking unit Banco de Bogota which priced in December a $600m 5.0% 5-year bond to yield 5.25% and was trading at around 4.8% area Tuesday. However, given Aval’s holding company status, investors have been asking for a premium over Banco de Bogota, with some looking at Bancolombia subordinated 2020s as a possible starting point. Those subordinated bonds were recently trading at around 5.75% bid, while Bancolombia’s 2017s were being quoted at around 4.93%. JPMorgan and Goldman Sachs are managing the sale, Baa3/ BBB minus.
Bolivia Seizes Pan American Gas Venture Stake
The Bolivian government has seized the 25% stake that Pan American Energy (PAE) owned in the Caipipendi natural gas field, a venture run jointly with Spain’s Repsol YPF and Britain’s BG Group. Following a government decree issued Tuesday, the country’s mining minister announced it would seize the shares and hand them over to state-owned oil company YPFB, citing PAE’s alleged failure to invest its required share in the venture. “The decision was made this morning. PAE was not investing what it was supposed to,” an energy ministry spokesman says. YPFB will now evaluate how much PAE invested in the venture so it can later begin compensation negotiations, he adds. Prior to the move, the Caipipendi venture was jointly owned by Repsol Bolivia (37.5%), the BG Group (37.5%) and PAE (25%). PAE is a joint venture company 40% owned by Argentina’s Bridas and 60% by UK oil major BP. Officials at PAE said the Bolivian government has yet to officially notify the company of any decision regarding its stake in Caipipendi. No decree has been made public yet, but energy ministry officials say the government is expected to publish the takeover decree in the judicial gazette Wednesday. The Bolivian takeover of its Caipipendi assets would be the second such nationalization that PAE has suffered in Bolivia under the government of President Evo Morales. In January 2009, under Morales’ nationalization decree for hydrocarbons in Bolivia, the government took control of Amoco Bolivia Oil & Gas, a subsidiary of PAE in the gas-rich Andean country. The company took the case to the World Bank’s ICSID where the compensation remains under dispute.
Iberdrola in Talks to Grow Neoenergia Stake
Spanish utility Iberdrola is seeking to increase its stake in Brazilian utility Neoenergia. The company is pondering raising its participation from the 39% stake it currently owns and is in talks for that purpose with its partners Previ, the pension fund for Banco do Brasil employees, and Banco do Brasil itself, the largest financial institution in Latin America, an Iberdrola spokesman says. The talks started last year, the spokesman adds, but he declines to confirm any published details on the ongoing deal. Neoenergia officials could not immediately be reached for comment. Several reports have suggested lately that Iberdrola is seeking as much as a 75% stake in Neoenergia. Iberdrola has been active in Brazil over the past year. A year ago, the company paid $2.4bn for Brazilian power distributor Elektro as part of a package including several of AEI’s assets in LatAm.
Ternium Unveils Terms for Retail Syndication
Ternium Investments has launched into retail syndication a $700m, 5-year amortizing senior unsecured loan, offering banks a margin of Libor+337.5bp. Upfront fees are 87.5bp for $75m commitments, 62.5bp for $50m tickets and 50bp for $25m. The loan was originally funded and closed among bookrunners at the beginning of the month. Proceeds went to help cover the steelmaker’s portion of a purchase of 27.7% in Brazilian steelmaker Usiminas, agreed in November. In the BRL5.03bn ($2.8bn) deal, Ternium acquired 84.7m common shares, its Siderar unit 30m and fellow Techint Group company TenarisConfab 25m. TenarisConfab has also secured a $350m 5-year loan through HSBC, and is expected to pay Libor plus 175bp-250bp. On the Ternium loan, Citi, Credit Agricole, HSBC and JPMorgan are global coordinators and, along with Santander, they are also acting as joint bookrunners.
Camposol Tests with Low Double Digits
Peru’s Camposol is out with low-10% whispers on an expected $125m 5-year non-call 3 bond, as roadshows wrap up today in Los Angeles. Pricing is slated for this week. Leads are heard comping the food exporter against Peruvian fishmeal exporter Corporacion Pesquera Inca (Copeinca), which has an outstanding $175m 9% 2017 trading around 7.5% on a yield basis. Proceeds are going to repay about $80m in debt and fund capex. The bond carries a change of control put at 101 as well as an equity clawback that will allow the issuer to redeem up 35% of the bond with one or more equity offerings during the first 3 years. The 144A/Reg S senior unsecured notes are rated B3/B. Credit Suisse and Santander are leads. Camposol is involved in the cultivation, processing and commercialization of agricultural products such as asparagus, peppers, avocados, mangos and grapes. It claims to be the world’s largest asparagus exporter and close to becoming the world’s largest avocado producer, according to its website.
Bimbo Nears Local Foray
Mexico’s Bimbo will kick start 3-day investor meetings Wednesday as it seeks to issue up to MXP5bn ($380m) in bonds in the domestic market. The issuer is heard with a tentative pricing date of February 8, pending regulatory feedback. Bimbo plans 7-year fixed-rate bonds, a fourth issuance under a MXP20bn program with proceeds to be used to help refinance a $1.3bn syndicated loan. Inbursa, ING, and HSBC are managing the deal, rated AA plus on a national scale. The Mexican baked goods company last week sold $800m in 4.5% 10-year notes in the international markets, getting a 4.602% yield. BBVA, Citi and Santander led that transaction, rated Baa2/BBB/BBB.
Pan American Buys Mexican Mine
Pan American Silver has agreed to pay roughly CAD1.50bn ($1.49bn) to acquire fellow Canadian-listed miner Minefinders, a company that runs the Dolores gold and silver mine in northern Mexico. The deal offers Minefinders’ shareholders three options: taking 0.6235 Pan American shares per Minefinders share, accepting CAD15.60 cash per share, or a combination of 0.55 Pan American shares and CAD1.84 in cash per share. The offer represents a 36% premium to Minefinders’ Jan 20 closing price. The transaction, on a fully diluted basis, gives Minefinders shareholders a 33% stake in Pan American. With the acquisition, Pan American strengthens its position in Latin America by adding the Dolores mine to a collection of projects in Mexico, Argentina, Bolivia and Peru. Rob Doyle, Pan American’s CFO, tells LatinFinance that paying a premium in the thirties for the company is standard. The offer, he notes, amounts to roughly CAD20 to CAD22 per ounce of recoverable metal, taking into account the capex and opex needed for production. CIBC World Markets and Scotia Capital gave Pan American a fairness opinion on the deal. BMO Capital Markets advised Minefinders.
DomRep Debut Joins HY Queue
Dominican port terminal Caucedo is poised to start investor meetings this week with the aim of issuing a 144A/RegS bond. The deal would mark the borrower’s debut in the international bond markets and it joins several other high-yield names testing investor appetite for paper farther down the credit spectrum. The borrower will be in New York on Thursday and in Los Angeles on Friday. Next Monday it will visit accounts in Chile and London and wrap up roadshows on Tuesday in Boston and Switzerland. According to marketing material distributed among the buyside, Caucedo is one of the largest port terminals in the Caribbean and the biggest container port terminal in the Dominican Republic. Bank of America Merrill Lynch, Citi and JPMorgan were mandated to take the credit on the road. Expected ratings are BB minus from S&P and Fitch.