Moody’s has assigned an A2 rating to America Movil’s (AMX) proposed RMB1.9bn ($300m) of senior notes. Proceeds are expected to be used for yuan capital expenditure funding. The outlook is stable. The proposed notes will not be guaranteed by Radio Movil Dipsa, AMX’s largest subsidiary which has provided guarantees to AMX’s previously-issued unsecured notes. Since October 2011, AMX has been issuing senior notes without this guarantee, the agency says. AMX has mandated HSBC to arrange 2-day fixed-income investor meetings in Asia starting today.
Category: Regions
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Luxottica Buys Brazilian Eyewear Maker
Italian luxury eyewear company Luxottica is moving to buy Brazilian eyewear company Grupo Tecnol, in a deal that gives it a foothold in a growing market. The company, which sells top brands such as Persol, Oliver Peoples and Ray Ban eyewear, will initially buy an 80% stake in Tecnol, with the remaining 20% to be acquired over a period of 4 years at pre-determined prices. The company estimates Tecnol’s enterprise value at EUR110m ($148.1m), but Luxottica officials declined to give additional information about the actual amount of the transaction, its valuation metrics or the advisors involved. The deal is expected to close in early 2012. Brazil’s growing middle class is an attractive client base for luxury brands and the primary reason for Luxottica’s foray into that market. Luxottica estimates that the South American country could soon become one of the top five markets for its wholesale division. Tecnol is a leader in the Brazilian eyewear business with net sales that reached the equivalent of EUR90m ($121.2m) in 2010, a compound growth rate of 14%.
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Peru’s BCP Strikes Deal with Colombian Brokerage
Banco de Credito del Peru has agreed to pay $76m for a 51% stake in Colombian brokerage Correval. Under the deal, Correval was estimated to have an enterprise value of $150m, Correval spokesman Mario Alejandro Nieto tells LatinFinance. Nieto says that Correval which was advised by JP Morgan, conducted a year-long negotiation process that finally reached fruition this week. Nieto could not offer any details on the valuation or whether the transaction was paid for fully in cash. BCP officials could not be reached for more details. Credicorp, the owner of BCP, said in a statement that MILA, the integrated market created between Peru, Chile and Colombia has prompted the financial institution to look for opportunities beyond its borders.
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ISA Taps Domestic Market
Colombia’s ISA has sold COP300bn ($153.8m) in local IPC-linked bonds. A 12-year pays 4.47% and a 30-year 4.84%. The sale saw demand of nearly COP777bn. Citi, Corredores Asociados, Correval and Interbolsa managed the deal, rated AAA on a national scale.
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Petrobras Gives PDVSA More Time on $13bn JV
Brazilian oil company Petrobras has agreed to extend its deadline for Venezuela’s state oil company PDVSA to finalize its 40% participation in the Abreu e Lima refinery in Pernambuco. The $13bn energy joint venture has often served as a gauge of the strength of relations between the two countries. PDVSA has 60 days starting from December 1 to obtain the required loan guarantees for its share of the project from Brazil’s BNDES, a Petrobras spokesman tells LatinFinance. Under the terms of the deal signed in March 2008, PDVSA would take 40% stake and become a main crude supplier for the plant. The total investment was originally estimated at $4bn but this figure is now estimated at $13.36bn, the spokesman says. The refinery is expected to process Venezuelan heavy crude and to begin processing 230,000 barrels a day in December 2012, based on Petrobras’ estimates. The deal has often become fodder for political controversy on both sides of the deal. President Hugo Chavez has often publicly complained about the slow pace of the transaction, blaming Petrobras executives and at one point denouncing the loan guarantees as unnecessary.
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Venezuela to Pay Cemex Cash Compensation
Venezuela’s government plans to pay $600 million to Mexico’s Cemex as compensation for the assets it lost to a nationalization campaign in 2008, with a large portion to be settled using debt issued by state-owned oil company PDVSA. The deal also contemplates paying the company an additional $154m for accounts payable that Cemex subsidiaries owed to its parent at the time, the Mexican cement company says in a statement. As agreed, Venezuela will make an initial payment of $240m in cash and $360m in “various negotiable securities issued by PDVSA,” Cemex adds. Cemex officials could not immediately be reached for comment. It remains unclear what PDVSA instruments the company accepted as payment, what their face value is and what kind of discount the company calculated in accepting the paper. Some analysts that follow the situation believe the company may be receiving shorter maturity paper and may not get the full $360m if it chose to sell that paper immediately. PDVSA’s 2013 bonds, its shortest paper, currently trades at 95, yielding 11.2% as of Thursday. The PDVSA 2014s trade at 78 or at 14.9% on a yield basis. It remains to be seen if Cemex must hold on to the bonds until maturity to get the $360m owed or if it can monetize that amount by selling the instruments sooner. Cemex lost its Venezuelan cement assets in April 2008, when President Hugo Chavez decided to force foreign cement makers into minority partnerships with the government. Lafarge and Holcim went along, but Cemex rejected an original $650m purchase price as too low and took Venezuela to international arbitration through ICSID.
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Infonacot Prices MXP Securitization
Mexican state-run lender Instituto Fonacot has issued MXP1.665bn ($122m) in 3-year bonds. The transaction was 2.23x oversubscribed and priced at TIIE+65bp after generating some MXP3.6bn in demand. Scotia and BBVA Bancomer managed the transaction, rated AAA on a local scale. Infonacot last visited the local market in 2010, paying TIIE+39bp on a 3-year bond, via the same leads.
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Pemex Sees GDN Success
Mexico’s Pemex generated sufficient demand Thursday to double its targeted MXP5bn size to sell MXP10bn ($734m) in a debut 10-year global depository note (GDNs), marking the first corporate to issue under this format. With both foreign and local accounts tugging at leads sleeves, the borrower was not only able to price in line with its local curve, but come at a much larger size than it would typically achieve in the domestic market. “The big question was whether the bonds were going to come wider than the local certificados bursatiles, (but). the M+135bp seems to be line with local pricing,” says a rival banker. The government controlled oil company issued the maximum authorized, pricing the notes at par to yield 7.65% or Mbonos+135bp, in line with MBonos+135bp-140bp guidance. At least 60-70% of participation came from foreign investors who generated about MXP5bn in demand, with another MXP8bn coming from locals. “The structure makes a lot of sense,” says the banker. “You combine both investor bases, locals and foreigners, and get the ability to issue in size at no extra costs. It would be difficult to do MXN10bn 10-year in a pure local bond.” Citigroup is serving as depository bank for the local Mexican transaction, rated AAA on a local scale. Settlement is scheduled for December 7. HSBC, Morgan Stanley and Santander managed the sale.
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Pacific Rubiales Gets Nearly All Early Converts
Pacific Rubiales has converted CAD236m ($232m) of its convertible debentures via an early conversion offer that drew participation from holders of 98.9% of the 8% 2014 bonds. In the process it will issue 20.5m shares, of which 2m represent an incentive payment to accepting holders. For each CAD1,000 ($988) face value tendered, the Toronto-based Colombian producer offered face value in shares plus 86.7533 additional shares. This compares to the original conversion rate of 77.94 shares per CAD1,000 face value. The offer closed Tuesday. Pacific Rubiales says it is undertaking the offer “to bring maximum balance sheet flexibility to carry out its acquisition strategy. RBC managed the process.
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Pemex Preps Debut GDN
Mexico’s Pemex is heard looking to pay Mbonos + 135bp-140bp on a MXP5bn ($367m) 10-year global depository note (GDN) as it tests investor appetite for a structure that has so far only been sold under a purely sovereign umbrella. The government controlled oil company is authorized to issue up to MXP10bn, but is heard preferring a size closer to $500m equivalent. GDN programs have been created for a handful of sovereigns, most notably Peru, but up until now corporate credit has not been sold under this format. The idea is to give foreign investors access to local currency markets but with 144A/RegS instruments that are Euroclearable and also pay interest and principal in US dollars. As with ADRs, the GDN structure gives holders the flexibility to move between international and local markets. Hence, Pemex’s decision to choose such a format may seem unusual given that international accounts are already large buyers of Mexico’s local sovereign paper, but for the oil company this may be an opportunity to broaden its investor base. “My guess would be investor diversification, market expansion with no incremental cost,” says a rival syndicate head. Citigroup is serving as depository bank for the local Mexican transaction, rated AAA on a local scale. Book building starts today with settlement scheduled for December 7. Pemex (Baa1/BBB/BBB) has mandated HSBC, Morgan Stanley and Santander for the GDN transaction.