Chile’s central bank has decided to lower the country’s benchmark interest rate by 25bp to 5.00%, despite expectations it would hold. In its statement accompanying the decision, it cites continued slow growth in developed markets and slowing in key emerging markets. Meanwhile, Peru held its rate at 4.25%, as expected, with its central bank mentioning slow global growth and an increase in inflation as the main factors influencing its decision.
Category: Regions
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Cicsa Launches Delisting Buyback
Carlos Slim’s Grupo Carso is offering to buy the remaining 32.82% it does not own in Carso Infraestructura y Construccion (Cicsa) construction company. In a deal that could cost up to MXP6.80bn ($501m), the company is offering MXP8.20 per share to holders of the 829m outstanding shares, it says. The price represents a slight premium to Thursday’s MXP8.15 close. The offer closes February 9, but can be extended at the company’s discretion. Inbursa is managing the process. If a 95% threshold is reached, Carso plans to delist Cicsa.
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HK Miner Taps Morgan Stanley for Peru Sale
Hong-Kong based CST Mining has hired Morgan Stanley to advise on the sale of its stake in Peru’s Mina Justa project, just weeks after a sale to global trader Glencore fell through. Morgan Stanley will advise in the disposal of the stake in the mine which CST indirectly owns through its 70% stake in Peruvian miner Marcobre. The remaining 30% in Marcobre is owned by LS-Nikko Copper and Korea Resources. Officials at CST could not immediately be reached for additional details. In June, CST struck a deal to sell Mina Justa to Glencore for $475m, but it fell through reportedly after the parties failed to agree on an offtake agreement for the mine’s future production. At the time, analysts saw the deal as fairly priced. Liberum Capital estimated the $475m transaction had an implied enterprise value to reserves, taking out capex, of $0.54 per pound. This was lower than Vale’s $1.13bn offer for African miner Metorex in April, which Liberum estimated at $0.94 per pound. CST originally acquired the mining assets in February 2010 when it paid $250m for Chariot Resources which owned a 70% stake in Marcobre.
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Colombia to Buy Back $578m in Tender
Colombia plans to repurchase $578m in four series of outstanding bonds, following the close of a cash tender offer that expired Wednesday. The sovereign is set to buy back $226m of its 10.75% 2013 bonds, $223.6m of its 2015 floating rate bonds, $41.8m of its 8.70% 2016 bonds and $86.6m of its 8.375% 2027 bonds. Before the tender was announced, there were $750m outstanding of the 2013s, $400m of the 2015s, $117.549m of the 2016s, and $154.91m of the 2027s. The one-day offer followed a retap of Colombia’s 2041 bonds, and offered holders 110.125 for the 2013s, 101.875 on the 2015s, 121.875 for the 8.7% 2016s, and 133.00 for the 8.375% 2027s. There were 8 series initially included in the offer, with an outstanding principal of $2.72bn, though the sovereign had set a $600m cap. It did not choose to repurchase the 8.25% 2014s, 7.735% 2017s, 11.75% 2020s and 8.125% 2024s that had also been included. On Monday, Colombia retapped its 6.125% 2041s to raise funds for the repurchase, reopening at 117.738 for a 4.964% yield. HSBC and JPMorgan acted as leads on the bond and as dealer managers on the tender.
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Colombian Builder Eyes IPO
Construcciones El Condor may soon move forward with an IPO soon in Colombia’s local market, according to bankers following the process. The deal should raise about $70m-equivalent and launch at the end of January or early February. Bancolombia is managing the transaction.
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EPM Wraps Up Debut A/B Loan
Colombian utility Empresas Publicas de Medellin (EPM) has signed an A/B loan that was launched last year, bringing in a total of 15 international banks. The syndication was led by IFC as a bookrunner, with participants including Bank of Tokyo-Mitsubishi, Citibank, Bank of America, Sumitomo Mitsui, Santander, BNP Paribas, JPMorgan, Mizuho, Scotia, Societe Generale, BBVA, Goldman Sachs, Banco de Credito e Inversiones, Israel Discount Bank, and Republic Bank. “We are very pleased with the overall transaction and the wide group of participants in this deal, which indicates that banks are still willing to lend to the better credits in the region,” says John Groesbeek, IFC head of syndications Latin America. The deal was launched in June of last year, later upsized, and then went through an extensive documentation process. The A loan, from the IFC, was $25m in size, and the B portion was increased from an original size of $250m to $324m after receiving commitments for $750m. The B loan pays Libor+187.5bp on a 5-year tranche and +215bp on a 7-year. The deal marks EPM’s first foray into the syndicated loan market as it looks to diversify its funding sources. Proceeds go towards investments in energy and water distribution.
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Germans Buy in to MPX
MPX Energia, the Brazilian coal and electricity company controlled by Eike Batista, has sold a 10% position in the company to German utility E.ON for BRL850m ($471.6m). The companies also signed a joint venture agreement to develop renewable energy ventures in Brazil and Chile, MPX says. The deal contemplates a BRL1bn capital increase, of which E.ON will provide BRL850m and shareholders will see an equity offering at BRL55.00 a share. The deal between the new partners has several moving parts. In an initial step, MPX debenture holders will convert their debentures into MPX shares. MPX’s coal assets in Colombia will then be bundled into a new company, CCX, with a BRL814m cash infusion and be spun off. For its part, MPX will bring projects with an 11,000MW capacity into the 50-50 joint venture, including Acu Power projects in Rio de Janeiro, Chile’s Castilla project, the TPP Parnaiba expansion and the Sul and Seiva power plants. E.ON will also retain a call option in the JV to buy an additional 38.9% of the Acu Power venture at book value. Officials at MPX and E.ON could not immediately be reached for additional comment. MPX has long sought to launch an IPO for its Colombian coal mining assets in CCX and many have expected the sale to generate as much as $5bn. Last June, the company issued BRL1.37bn in convertible debentures, of which BRL600m went to BNDES, BRL200m to Gavea, BRL200m to Batista and BRL369m to minority shareholders.
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Bimbo Targets 10-Year, Up to $800m Size
Mexican bakery goods company Grupo Bimbo is expected to come with an up to $800m 10-year bond after Moody’s assigned a Baa2 to the proposed issue. This comes as the borrower plans to meet investors in New York today, possibly announcing some more deal details then. It has already visited investors in the Mid-West and the West Coast, and is scheduled to wrap up roadshows in London on January 16. With just one international bond outstanding, the company still trades wide to its US peers as well as to other high-grade Mexican names, and it is thought the company is trying to tighten that differential. Its existing 4.875% 2020s were trading earlier this week at around 4.20%. Bimbo, rated Baa2/BBB/BBB, is now the largest baked-goods company in Mexico and the US after purchasing Sara Lee’s North America fresh bakery business, Moody’s notes. The bond should improve the debt maturity profile on a company that can already boast a strong liquidity position, with free cash flow and existing reserves already covering near-term maturities, the agency adds. As of September 30, 2011, debt-to-Ebitda was 3.3x, while the free cash flow/debt ratio was 14.7%. “We expect credit metrics to improve over the next 18-24 months as Bimbo integrates the operation of Sara Lee’s fresh bakery business and obtains synergies of $150-$200m by year 2013,” the agency says. BBVA, Citi and Santander are managing the 144A/RegS transaction. Bimbo made its cross-border debut in the summer of 2010, when it issued an $800m 2020 at 99.726 with a 4.875% coupon to yield 4.910%, or UST plus 180bp, the tight end of 185bp area guidance. Bank of America Merrill Lynch, Barclays and HSBC managed the sale on that occasion.
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Koreans Take Stake in Panama Copper Project
The Korea Panama Mining Corporation (KPMC) has agreed to acquire a 20% stake in the Cobre Panama project, currently run by Canada’s Inmet Mining. KPMC, a joint venture between LS-Nikko Copper and the Korean Resources Corporation, acted under an option agreement to acquire the stake for $155m, leaving Inmet in control of 80% of the venture, Inmet says. The acquisition price reflected KPMC’s historical development costs incurred up until the option agreement date and its share of development costs above $150m. Officials at Inmet could not immediately comment on the valuation details of the deal or the potential advisors involved. Following the deal, KPMC will continue to finance its share of the development costs. KPMC and Minera Panama, the owner of the Cobre Panama copper venture, in turn will put together an offtake agreement that will allow KPMC to purchase a 20% share of Minera Panama’s concentrates production.
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Infonavit Preps New RMBS
Mexico’s Infonavit is expected to come to the local market next month with the RMBS bond issuance under a new MXP10bn program. The issuer is planning to issue up to MXP5bn ($367m) in 28-year UDI-denominated bonds backed by Infonavit mortgages with a tentative issuance date of February 8. Proceeds will be used to create new mortgages. Banamex and HSBC will manage the sale, rated AAA on a national scale. Infonavit last issued MXP1.1bn of 2039 bonds at 4.45%, or 264bp over the government’s UDIbonos via Banamex in December 2011.