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.
Category: Regions
Mexican Homebuilder Could Lead Huaso Expansion
Mexico’s Corporacion GEO has filed a $100m-equivalent bond shelf in Chile, in a signal that regulatory changes could be working to attract new and more varied foreign issuers into the country’s so-called Huaso market. “We are undertaking this process to open windows to access financing,” Roberto Torres, the homebuilder’s head of capital markets, tells LatinFinance. The credit line registration is for a 10-year UF-denominated bond, with Santander as bookrunner. In Mexico, GEO is unable to issue such lengthy maturities and this has led it to seek out other markets for longer tenors and more attractive funding costs. Though GEO is not yet planning a specific transaction, it sees opportunities available in the Chilean market, and if necessary, could use proceeds from a sale to refinance debt. An issue would be swapped back into MXP. “We are confident that this process [the swap] is simple and accessible,” Torres says. GEO has one BBB Chilean national scale rating, and expects a second. Its rating is BB minus on an international scale. Geo would like longer-term debt, as short-term debt represents 29.1% of its MXP12.7bn total debt. Only 3 Huaso bonds have been issued in Chile – 2 from Mexico’s America Movil and one from Peru’s BCP, but with a reduction in regulatory restrictions last year, it is hoped that more foreign borrowers will be able to feed the country’s growing institutional appetite.
Positive Sentiment Aids Colombian LM Trade
Positive market tone acted as nice springboard for Colombia Tuesday when the sovereign decided to pull the trigger on a retap of its 6.125% 2041s in an effort to raise funding for a cash tender of its outstanding bonds that begins today. In the end, the country was able to upsize its reopening after watching books grow to over $3.6bn in size. Emerging with attractive 200bp area whispers and tightening to 195bp on official guidance, the issuer was able to price at 117.738 to yield 4.964%. The deal is thought to given investors around 20bp-25bp concession to the 170-175bp secondary level seen the day before pricing. “The timing couldn’t be better. Market tone was great and the issuer got a good price for size,” notes a syndicate away from the deal. The bonds had opened at 121 on price basis Tuesday and later dipped to 118 in the aftermarket, according to an investor. This comes as the sovereign readies a cash tender for the purchase of eight series of dollar bonds with maturities ranging from 2013 to 2027 and an outstanding size of $5.87bn. Colombia is offering to pay 110.125 on its 10.75% 2013s, 119.25 on its 8.25% 2014s, 101.875 on its FRNs due 2015, 121.875 for its 8.7% 2016s, 122.875 on its 7.375% 2017s, 158.375 on its 11.75% 2020s, 139.75 on its 8.125% 2024s and 133.00 on its 8.375% 2027s. The offer officially expires on Thursday, but may expire as early as 4:00pm New York time on Wednesday. The sovereign is offering to purchase an aggregate principal amount of bonds that will not exceed $600m or result in an aggregate principal price of more than $750m. HSBC and JPMorgan acted as leads on the bond and dealer managers on the tender.
Continental Sheds Spanish Doubts with Upsized Deal
Peru’s BBVA Continental sold $500m in new bonds Tuesday, upsizing from an expected $300m and defying pushback seen earlier this week. While Continental’s ties to its Spanish parent and the expectations of more bank supply had left some investors expressing doubts about the issue, the deal gained enough moment to generate a healthy $1.8bn book and the participation of some 20 plus accounts. The bond traded at plus 0.70 in the aftermarket, according to an investor. The BBB/BBB plus 144A/RegS bond priced at par to yield 5.75% or UST plus 490.7bp. This comes one day after BBVA Continental emerged with 5.875% area guidance following whispers of 6%. Mainly comped against BBVA’s illiquid 2020 bonds, new issue premium estimates varied widely from 35bp-75bp, with those bonds spotted around 6% pre-announcement. Some investors found the deal priced cheap to its curve, but not relative to similar banks in other countries. Proceeds will be used to fund bank operations. Pricing of the transaction, originally scheduled for Monday, was carried overnight because Spain’s BBVA Group first had to announce a $1.3bn write down of goodwill charges on its US operations on the back of lower-than-expected growth. The BBVA Group says the write-down will not impact cash flow generation or liquidity and will result in a EUR400m positive impact on core capital of the group because of tax treatment of goodwill. BBVA, Goldman Sachs and JPMorgan managed the 144a/RegS transaction. The bank last came to market in November 2010, when it priced a $300m 2020 at 99.220 with a 5.500% coupon to yield 5.603%. S&P recently upgraded Continental to BBB from BBB minus following a similar move for the sovereign last month.
American Tower Continues LatAm Purchases
American Tower, a US telecommunications infrastructure operator, continued its LatAm buying spree after agreeing to acquire 558 telecommunications transmission towers from Telefonica Moviles Chile, with their respective maintenance facilities, for CLP49.2bn ($95.7m). Telefonica Moviles Chile will continue using those facilities for its operations under a leasing agreement signed with American Tower’s local subsidiary ATC Sitios de Chile. Neither American Tower nor Telefonica Moviles could be reached for comment. The Chilean deal comes less than a month after American Tower acquired 2,500 telecom towers in Mexico, in a $500m deal with Pegaso PCS, also a unit of Spain’s Telefonica. The company used its own internal M&A group for the Mexican acquisition and no advisors were hired at the time.
Generator Joins Peruvian Equity Pipeline
Peruvian securities regulators have authorized state-owned power utility Empresa de Generacion Electrica del Sur (Egesur) to publicly list shares on the Lima Stock Exchange, according to an official at the company. He declines to offer details about any specific transaction, and says no advisors have yet been hired. Peru’s market is expected to see more new issuance activity in 2012 provided conditions are benign. Cementos Pacasmayo is preparing a New York follow on, and port operator Andino Investment Holding plans a $60m local IPO pricing January 17.
DB Names Mexico Country Chief
Jorge Arce has been named Deutsche Bank’s new chief country officer in Mexico, replacing Juan Guthmann who had held the position on an interim basis after the departure of Tito Vidaurri early last year. Vidaurri was poached by Bank of America Merrill Lynch to lead its Mexico business following the retirement of Orlando Loera. Arce has been with Deutsche bank for 16 years, most recently serving as head of northern Latin America for the bank’s private wealth management business. He will now report to Bernardo Parnes, CEO of Deutsche Bank Latin America.
Continental Readies Pricing Amid Some Pushback
BBVA Continental has extended pricing for one day on its 5-year $300m bond until today after some investors expressed unease about the borrower’s exposure to Spain despite the strength of the Peru-based bank. Accounts were generally bullish on the name, but several opted not to participate ahead of more bank supply in coming weeks. Several simply hope to extract higher concessions from FIG paper with less European risk. “We opted out because of exposure to Spain,” says one senior portfolio manager. He expects Peruvian financial institution BCP to come to market shortly with roadshows heard scheduled for next week via JPMorgan and other leads. “We like the name. [It is a] solid credit with negative Spanish parent overhang,” adds another EM portfolio manager. This comes after BBVA Continental emerged with 5.875% area guidance Monday following earlier whispers. Some investors saw such talk as too tight given the spread between BBVA Bancomer and Banorte bonds. “It was cheap to its own curve, but not relative to similar banks in other countries,” an investor adds. Continental’s existing 2020 bonds were spotted at around 6% before announcement. The book size for the BBB/BBB plus rated Peruvian bank was heard at north of $750m by Monday afternoon, in theory providing the deal with enough moment to price today. BBVA, Goldman Sachs and JPMorgan are managing BBVA Continental’s 144a/RegS transaction. The bank last came to market in November 2010, when it priced a $300m 2020 at 99.220 with a 5.500% coupon to yield 5.603%. S&P recently upgraded Continental to BBB from BBB minus following a similar move for the sovereign last month.
Peru Cement Maker Set for NY Listing
Peru’s Cementos Pacasmayo (CPAC) is planning an equity follow-on, marking what would be its debut New York listing. The Hochschild Group-controlled cement maker is seen looking to raise about $250m to fund the expansion of its La Rioja plant and also develop a phosphate and brine project. JPMorgan and Santander are managing the deal, which would bring the total of New York-listed Peruvians to 5.
Port Operator Targets Lima IPO
Andino Investment Holding is planning to raise as much as $60m-equivalent in a January 17 share offering. The port operator is looking to sell 15m-30m shares, heard likely to come at around PES5.10 each. If the full amount is sold at this price, the issuer is looking at raising PES153m ($57m). Proceeds would be used to reduce debt and for expansion projects. BCP is managing the sale. Andino borrowed $85m from Goldman Sachs last year to purchase fellow port operators Neptunia and Agencia Maritima.