Mexichem has improved an unsolicited offer for Dutch pipemaker Wavin, but saw the move rejected by the target company. The Mexican petrochemical company offered EUR9.00 in cash per ordinary share of Wavin, up from the EUR8.50 offered on November 22. Although “certain progress has been made on non-financial items…the proposed offer price of EUR9.00 per share is not acceptable as this price materially undervalues the company and its prospects,” say Wavin. At EUR9 per share, Mexichem is assigning the Dutch company an enterprise value to Ebitda multiple of roughly 7.5x, assuming equity of $450m, net debt of anywhere between $300m to $330m and an Ebitda of $100m to $105m, says a person familiar with the transaction. Barclays and Citigroup are advising Mexichem, and Bank of America Merrill Lynch is doing the same for Wavin. Wavin shares closed Tuesday at EUR7.83, down 0.89%.
Category: Regions
PacRu Launches Exchange Offer
Pacific Rubiales has launched an offer to exchange any and all of its outstanding 8.75% 2016 bonds for new 7.25% 2021s. Holders will receive $1,150 cash per $1,000 principal if they accept by the December 16 earlybird date, and $1,120 thereafter. The new notes are the same as those issued Monday through the sale of $300m in 10-year NC5s that were priced at par to yield 7.25%. Bank of America Merrill Lynch managed the new issue and is also managing the exchange offer.
Rabobank Set for Chile Bond
Dutch bank Rabobank has revived plans to issue bonds in Chile’s local markets, this time targeting an up to UF2m in 5-year bullet. The bank had been initially eyeing a sale last week, including the options of a UF-denominated tranche with a 3.05% coupon and a peso tranche with a 6.05% coupon. Proceeds will be used to fund the bank’s operations. The bond is rated AAA on a national scale. Celfin and Deutsche Bank are managing.
Recope Preps CDB Loan
Costa Rica’s Recope and the China Development Bank (CDB) are working on a 15-year $800m-$900m syndicated loan with a 3-year grace period arranged by CDB to fund improvements at Soresco, a joint refinery venture between China National Petroleum Corporation (CNPC) and Recope, the Costa Rican government says. The Costa Rican national oil refinery has signed a mandate letter with the bank and preliminary financial conditions are being explored, says a person familiar with the agreement, who declined to comment on the interest rate. Soresco, created in 2008, will invest a total of $1.24bn to revamp and expand the Moin-based refinery which will process 60,000 barrels of oil per day. The remaining $300m to $400m will be covered by both partners in equal amounts. Recope plans to issue bonds in the local market in 2012 to finance its share of the deal. As structured, the Soresco joint venture will take care of construction and then lease the facility back to Recope for 15 years with an option to purchase. The lease fee to be paid to Recope will be calculated assuming a 16% IRR for the project.
T&T Approved for IDB Loans
Trinidad and Tobago has been approved for $130m in loans from the IDB, with $80m of it earmarked for climate change assessment and framework development and $50m for enhancing financial sector stability. The $80m loan has a 20-year term and four-year grace period, with a variable interest rate based on Libor, while the $50m loan has a 20-year term and 5-year grace period, with a variable interest rate based on Libor.
Banco de Chile Prices MXP Debut
Banco de Chile has raised MXP1.5bn ($111m) in a Mexican domestic bond market debut, pricing a 3-year bond at TIIE+ 60bp. With this transaction, the bank becomes the third Chilean issuer to raise debt in Mexico, following similar moves by Banco de Credito e Inversiones (BCI) and miner Molymet. Over 20 accounts participated, including mutual funds, insurance companies and retail, allowing the issuer to see around 1.3x demand. Banco de Chile’s pricing came in line with 50bp-60bp guidance. This was the first bond off a MXP10bn shelf. Banamex and JPMorgan led the transaction, rated AAA on a local scale. In July, BCI priced a MXP2bn 5-year floater at TIIE+40bp, while Molymet in April issued MXP1.5bn 1.5-year bonds at TIIE+55bp.
Investors Take a Shine to PacRu
Colombia’s Pacific Rubiales joined other issuers rushing to market Monday when it priced a $300m 10-year NC5 that was upsized by $50m to make room for more accounts after getting $250m in reverse inquiry. The Ba3/BB E&P operator priced the bond at par with a 7.250% coupon, tight to guidance of 7.375% (+/- 0.125), following initial 7.5% whispers. The bonds were trading up a point in the grey, according to one investor. The trade was largely comped against the borrower’s existing 8.75% 2016s which had been trading at 6.1%-6.0% YTM or at 5.57% on a yield to average life basis. “The deal was not cheap, but it is a good credit, safe haven and operates in the jurisdiction where there is local demand for the bonds,” notes one investor. Demand was driven by high quality asset management accounts mostly from the US. The funds will be used for general corporate purposes. Bank of America Merrill Lynch (BAML) was sole bookrunner on the transaction. Last month, PacRu converted CAD236m ($232m) of its 8% 2014 convertible debentures via an early conversion offer that drew participation from holders of 98.9% of the bonds. One of LatAm’s largest private oil and gas companies, Pacific Rubiales has principal operations in Colombia, Peru and Guatemala. The 8.75% 2016 was its last previous new issue, done in November 2009 when it priced $450m at an 8.95% yield via BAML and Citi.
Colombia’s Exito Expects Full Payment from Venezuela
Colombia’s retailer Exito has received $72.4m out of a $90.5m payment it is owed from the sale of Venezuela’s Cativen retailer to the Venezuelan government. Exito expects to receive the last installment of $18.1m in November 2012 which would finalize the transaction. Exito officials could not immediately be reached for comment. The payments to Exito stem from French retailer Casino’s decision in November 2010 to sell an 80.1% stake in Cativen to the Venezuelan government for $690m. The sale included Exito’s 28.6% holding in the company. As part of the deal with the government, Casino retained 19.9% to provide operational support. The deal involved a 60% upfront payment to Casino upon the closing of the deal, with 20% paid in cash and 40% in two dollar denominated promissory notes maturing in Nov 30 2010 and Nov 30 2011.
Petrobras Completes Diversification Play
By pricing GBP700m ($1.1bn) 2026 bond Monday, Petrobras wrapped up its foray into the European market as it looks to expand its funding base and ease pressures on its core funding base. Bankers agree that the Brazilian oil company paid a premium to its dollar curve, but access to new pools of funding is seen as vital for a credit that needs to cover massive capex needs over the coming years, and the extra cost was probably worth the trouble, say some bankers. “You could say looking at comps in the euro markets that it was normal pricing, but versus the dollar curve they paid a decent new issue concession to access a different set of investors,” says one rival syndicate official. Still, in the end, it was able to raise $1bn equivalent with a lengthy 15-year tenor. Exactly how much the oil company would have paid to make a similar trade in the USD sector was a question for debate, but most bankers agreed that the 295bp G-spread seen on the company’s USD 2021s was the main starting point. In all, Petrobras placed the paper with about 100 investors, few of which were traditional buyers of the credit, namely large pension and insurance companies, with banks largely selling the deal off their high-grade desks. Demand topped the GBP1bn mark before the bond was priced at 97.876 with a 6.25% coupon to yield 6.379% or Gilts plus 370bps. Some cross-over US accounts were also seen nibbling at the edges seeing the trade as a yield play. “They can now come back in 2012 and do a decent size in dollars, so it makes a lot of sense [to tap euros and sterling],” says another senior banker away from the deal. “It may be more expensive, but what would have happened to their dollar spreads if they did everything in dollars?” This comes less than a week after the oil company tapped the euro market for $2.5bn equivalent with EUR1.25bn 6-year priced at 99.021 with a 4.875% coupon to yield mid-swaps plus 285bp, and a smaller EUR600m 10-year that came at 99.266 with a 5.875% coupon at MS+330b
NII Draws Large High-Yield Crowd
NII retapped its existing 7.625% 2021 bonds for $700m, upsizing from an original $500m size. The US-based operator of LatAm wireless assets, reopened the bonds at 98.50 to yield 7.852% or UST+600bp, in line with 98.50-area guidance. Order books came in excess of $1.4bn from a predominantly high yield focused audience. Proceeds are for general corporate purposes. Credit Suisse, Deutsche Bank, Goldman Sachs and JPMorgan led the B2/B+ transaction, done through the NII Capital unit. In the original transaction priced in March, NII issued $750m of the bonds to yield 7.625%, through Goldman Sachs, Credit Suisse, Deutsche Bank, JPMorgan and Morgan Stanley. NII is a provider of fully-integrated mobile communication services in Latin America.