Codere Finance priced a $300m 2019 NC3 bond Wednesday, landing its dollar debut in the international bond market. The Spanish-based gambling group with significant LatAm operations upsized from an original $250m and priced the notes at par to yield 9.250% or UST+801bp, in line with 9.25% area guidance. “It was cheap to outstanding bonds,” notes one investor following the transaction. Codere’s outstanding 2015 euro bonds were trading at 8.5% Wednesday. Demand came from EM and US high yield accounts. The gaming company is raising funds for the purchase of an additional 35.8% stake in Mexico’s Corporacion Interamericana de Entretenimiento. Codere’s Mexican unit agreed in August to buy the stake for MXP2.68bn ($217m). Codere has operated in Mexico for 13 years and is also in Argentina, Brazil, Colombia, Panama and Uruguay. Credit Suisse Barclays and Itau led the B2/B transaction. The bonds were trading 100.25 in the grey Wednesday, according to an investor.
Category: Regions
CSN Buys German Steelmaker
Brazil’s Companhia Siderurgica Nacional (CSN) has purchased all the shares of German long steel producer Stahlwerk Thuringen (SWT) and distributor Gallardo Sections from Spanish group Alfonso Gallardo for a EUR482.5m ($636.6m) price tag, assuming no indebtedness, the company says. CSN purchased the shares through its Spanish subsidiary CSN Steel which handles the company’s European operations. Officials at CSN did not respond to several inquiries for additional comment, while SWT officials could not immediately be reached for additional details. SWT has a 1.1m ton-per-year installed capacity, which would cement CSN’s steel division in the region. The SWT acquisition is the second announced this year by the Brazilian company. In early January, CSN announced the purchase of 14.7m shares in railroad operator MRS Logistica from the Belize-based International Investment Fund for an undisclosed sum.
Molymet Buys into US Rare Earth Producer
Chile’s Molibdenos y Metales (Molymet) has acquired a 13% stake in US rare earth producer Molycorp for $390.2m. The deal involves an all-cash acquisition of 12.5m shares of Molycorp common stock, for which Molymet gets a seat on Molycorp’s board. Officials at Molycorp could not immediately be reached for additional comment, and a Molymet spokesman declined to offer additional details of the transaction. Fitch Ratings noted that the deal should not affect Molymet’s BBB rating. Following the deal, Fitch estimates the Chilean company will maintain a debt to Ebitda ratio of 1.2x, a slight increase from its 1.0x four-year average, but still within its ratings range. Molymet is a leading player in the global market for molybdenum, a metal used to produce high-strength steel alloys, and rhenium, a rare silvery metal used in jet engine production. The deal gives Molymet the capacity to produce 19,050 metric tons of oxide from rare earths, and may reach 40,000 metric tons in 2013, the company says.
AMX Becomes First LatAm Dim Sum Issuer
America Movil became LatAm’s first borrower to tap the so-called Dim Sum market Wednesday when it issued a CHN1bn ($160m) 3-year bond. This is expected to be the first of several from the Mexican telecom giant and this year could see other LatAm corporates take a stab at the rapidly growing offshore renminbi-denominated market, bankers say. “We want to establish a more regular presence in this market with funding that can used to cover our inputs of Chinese goods,” the company’s CFO Carlos Garcia Moreno tells LatinFinance. “This is not meant to be a one-off transaction.” With America Movil’s Chinese vendor network growing considerably in recent years, the company has been looking to raise financing in a currency that better matches this commercial relationship. A similar logic prevailed when in 2009 it secured a $1bn 10-year loan from the China Development Bank. “About a year ago we prepaid that loan and at the time we saw the Dim Sum market was beginning [to grow],” Garcia Moreno says. “There was a clear intention by the Chinese government to develop the renminbi market with the idea that more people would buy more Chinese products and pay for them in the Chinese currency.” America Movil joins a select group of EM and multinationals such as McDonald’s and Caterpillar that have tapped into this asset class. McDonald’s, for instance, raised a smaller CHN200m 3-year at 3% during the summer of 2010, and more recently China Development Bank came with 3 and 5-year Dim Sum bonds at 3.10% and 3.45%.“America Movil is well-known and followed by investors globally It is a good first time issuer to lead this effort [for LatAm],” says Katia Bouazza, co-head of global capital markets, Americas at HSBC, which acted as sole bookrunner on the transaction. America Movil itself generated a CHN2bn book and priced at par to yield 3.50%, the tight end of 3.50-3.60% guidance. Marking a new twist to Dim Sum deals, AMX’s bond also registered the paper with the SEC, opening the door to a br
Homex Hones Price Thoughts
Mexico’s Desarrolladora Homex was discussing initial price thoughts of low 10s Tuesday on the first day of roadshows for what is expected to be a $300m 5-year bond. The borrower is scheduled to wrap up meetings in New York and Boston today via Credit Suisse and Deutsche Bank. This comes in the wake of a successful $500m 10-year NC5 last week from homebuilding peer Urbi (Ba3/BB minus), which generated a book of $2.5bn from over 170 accounts, pricing to yield 10%. Like Urbi, Homex is using proceeds 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.
Inbursa Preps MXP Offering
Mexico’s Banco Inbursa plans to issue up to MXP3.5bn ($269m) in 2-year floating-rate notes in the domestic market February 8. While official price guidance has yet to be determined, TIIE +20bp area is seen as a good starting point, says a banker on the deal. Proceeds will be used to fund the bank’s operations. Banamex and Inbursa are managing the transaction, rated AAA on a national scale. Inbursa last issued in December 2011, pricing a MXP3bn 2-year at TIIE+20bp.
Cofide Quietly Builds Book on Debut
Peru’s development bank Cofide tested the waters Tuesday with mid-300bp whispers on what is expected to be $500m 10-year bond, the credit’s debut in the international markets. Pricing could come as soon as today. At that level, the borrower is in line with its long-held target of 150bp over Peruvian sovereign paper, and offers a nice pick up to Brazil’s development bank BNDES (Baa1/BBB), which has 2020s trading at around 242bp. Books were heard reaching around $500m early Tuesday, with investors expecting demand to be sufficiently strong to allow Cofide to reach its target size. The 144A/RegS senior unsecured issue is rated BBB and carries a change of control put at 101. Deutsche Bank and JPMorgan are leads.
Ecopetrol Buys 30% of Peruvian Block
Colombia’s Ecopetrol has agreed to acquire a 30% stake in an oil and gas exploration and production license in Peru from Spain’s Repsol. The deal involves participation in block 109 located in Peru’s Amazon jungle region, the companies say. Officials at Repsol and Ecopetrol declined to offer a total price tag for the deal but they said no advisors were involved in the transaction which was handled by the company’s own executive teams. Peru’s 109 block was originally assigned to Repsol by the Peruvian government in December 2005 and so far the venture, which involves an area of 357,200 hectares, is still in the exploratory stage. Ecopetrol already has a presence in the Andean country through participation in 4 blocks in partnership with Repsol and Argentina’s YPF.
Tenaris Confab Launches Loan
Tenaris Confab, a subsidiary of steel tube supplier Tenaris, held bank meetings in Brazil earlier this week to launch a $350m, 5-year syndicated loan. Margins are tied to a ratings grid and range between Libor+210bp and Libor+285bp. Banks will get 85bp for MLA tickets of $40m and 70bp for arranger tickets of $25m. There is a 12-month grace period, the company said in January. A New York meeting is to be held Thursday. The borrower is raising funds to finance its acquisition of 25m common shares of Usiminas, as part of a deal agreed last year in which 3 Tenaris units bought into the Brazilian steelmaker and entered its controlling group. HSBC is leading the transaction, with Bank of Tokyo heard as an MLA.
Bancolombia Prices New York Follow On
Bancolombia has raised $300m in the international portion of its follow-on equity offering, pricing 5m ADRs representing 20m preferred shares at $60.00 each, according to bankers on the trade. The deal represents the remaining shares after Colombians bought 44m shares at COP26,000 each to raise COP1.14trn ($614m) in a domestic offer that closed last week. The price comes at a 3.24% discount to the ADRs’ $62.01 Tuesday close. The $914m-equvalent total follow-on comes as the bank seeks additional capital after spending $150m to join Grupo Sura’s bid for ING’s LatAm insurance assets late last year. It has also been trying to improve operational efficiency. UBS was global coordinator of the ADR sale, with Bank of America Merrill Lynch and JPMorgan coming in as joint bookrunners. Bancolombia’s own capital markets arm managed the domestic portion. Bancolombia’s Colombian shares closed Tuesday at COP27,960.