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.
Category: Regions
Posted inDaily Brief
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.
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Ternium Mexico Names New CEO
Maximo Veyoda has been named CEO of Ternium Mexico. He replaces Julian Eguren, who became CEO of Brazil’s Usiminas, in which Ternium’s parent Tenaris is now part of the controlling group. Veyoda has worked for 20 years at Techint Group, which ultimately owns Ternium and Tenaris, most recently as Ternium’s CEO in the Andean region. He previously worked in Argentina with Ternium Siderar and with Ternium Sidor in Venezuela.
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Panama Picks Local Markets to Fund LM Trade
Panama has elected to raise $200m through a domestic bond auction to pay for the cash portion of a liability management operation designed to retire its 2015 USD bonds. The sovereign plans to sell $200m in local bonds, upsizeable to $300m, Wednesday. Panama launched a pair of tenders January 18 for creditors holding $1.47bn of the outstanding global 7.250% 2015s, offering them either cash or the 6.700% 2036 bonds. In the cash tender, the sovereign is offering holders a payment based on the 2015 US Treasury bond yield at the time of the January 24 close, plus a spread of 1.352%. In addition to this base price, the sovereign will pay a premium to be determined through a modified Dutch auction process. At the same time, Panama is offering holders 6.700% global 2036 bonds, at an exchange rate to be set on the closing day. Both offers expire January 24, and are contingent upon the issue of local Panamanian bonds or other financing. Citi and Goldman Sachs are managing the liability management process.
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PDVSA Inks $2.2bn Enarsa JV
Venezuela’s PDVSA has inked a joint venture agreement with Argentina’s energy company Energia Argentina (Enarsa) to develop the Junin block in the Orinoco region. The joint venture is set to invest $2.2bn to eventually produce as much as 100,000 barrels of crude a day, PDVSA says. Both companies will also join forces in the development of a refinery in Argentina that will process 100,000 barrels a day. PDVSA and Enarsa officials could not immediately be reached for comment. It remains unclear how the investment in the venture will be financed. That said, PDVSA’s access to the markets remains open. In recent years PDVSA has aggressively sold billions in bonds and also secured loans from the Chinese government in exchange for oil shipments.
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LatAm Heavy Telecom Prints Bond
Sable International Finance, an EM telecom that generates over 60% of its cash flows from LatAm and the Caribbean, priced a $400m 8-year non-call four bond Friday at par to yield 8.75%. The deal was brought to market by an army of banks including BNP Paribas, HSBC, JP Morgan, RBS and Citi. Of the $872m in Ebitda generated last year by the company, about $276m came from Panama, with another $229m coming from a collection of Caribbean islands, says a person with knowledge about the transaction. Ratings are Ba2/BB. Sable is part of Cable & Wireless Communications.
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Pacasmayo Sets NY Target
Peru’s Cementos Pacasmayo is heard aiming for February 7 to hold its New York follow-on, and plans to price the debut of its ADRs at $11.50-$13.00. The sale of 20m ADRs, representing 100m common shares, would raise $282m at the $12.25 midpoint, assuming a 3m share greenshoe is exercised. The offer is seen as essentially being an IPO for the cement company, as its Lima shares are relatively illiquid. The shares closed Friday at PES5.90 ($2.19). Pacasmayo is raising funds for the expansion of its La Rioja plant and also for the development of a phosphate and brine project. JPMorgan and Santander are managing the transaction. The deal is looking to be the first large equity offering of the year in LatAm. Others that are close to seeing the light of day include an IPO of Mexico’s Alpek, which could also happen in February, and IPOs from Brazilians Brazil Travel and Seabras, each expected to launch as soon as this week.
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Mexico Holds Rates, but Easing Expected
Mexico’s central bank has elected again to hold interest rates at 4.5%, in line with the market’s expectations. In a statement, the bank cites continued deterioration in the global economy, slowing in the domestic economy, as well as a pickup in local inflation. Barclays notes that the bank’s remarks carry a heavier emphasis on slowing domestic activity and this may signal it will begin easing as soon as its next meeting, in March.
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MMX Deflects Merger Proposal Talk
MMX, the mining operation of Brazilian magnate Eike Batista’s EBX conglomerate, notified regulators of unusual trading in its shares and talked of regularly receiving poorly thought-out partnership and merger proposals. The announcement comes at a time when Ferrous Resources has reportedly made a $2.3bn offer for MMX, which neither company has so far confirmed officially. MMX and Ferrous Resources could not immediately be reached for additional comment. MMX shares closed Friday at BRL7.59 ($4.31) per share, up 2.57% from a day earlier, and up 12.80% from January 6. The company claims that no fundamental changes in its business “could justify the [share price] increase or the volume of trading.” MMX further adds that it “constantly receives proposals of partnerships, mergers or other operations…that are incomplete, lack merit or economic backing and don’t fit with [MMX’s] business plan.” On a separate note, Ferrous Resources did announce the departure of its CEO Mozart Litwinski. The company’s CFO, Andre Simao, and COO, Antonio Rigotto, will take the helm of the company while the search for a new CEO gets underway.
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PE Shop Names Sao Paulo Head
Private Equity firm General Atlantic has hired Martin Escobari as a managing director and head of its Sao Paulo office and LatAm investing program. He will lead GA’s activity in Latin America, where it has already invested more than $1bn to date in growth companies. Escobari previously spent 4 years working at PE firm Advent International, most recently as MD. He is also a founder of online retailer Submarino.com. General Atlantic’s most recent investment in the region was a co-investment with Grupo Suramericana in its purchase of ING’s LatAm assets last year.