Guatemala’s Banco Industrial will likely come to market next year with another diversified payments rights (DPR) bond, Luis Jorge Sifontes, assistant director of external financing, tells LatinFinance. “For us it is an efficient [way to raise funding] because it gives us better pricing,” he adds. It most recently raised $205m through a dual-tranche DPR issue. The 7-year was split into fixed and floating rate portions paying around mid 5% and L+237bp respectively. It also placed a 10-year at around L+350bp. On these types of trades, the bank has traditionally mandated Wachovia, though Citigroup led a transaction in 2007. The bonds are backed by remittances that the bank receives from companies and families. The borrower has also tapped the international markets twice with subordinated issues, most recently in July when Bank of America Merrill Lynch (BAML) led a $150m 10-year Tier 2 issue that was priced at par to yield 8.25%. However, Sifontes says the bank has no need to raise more subordinate debt and is unlikely to return to the market in the near-term with these kinds of transactions.
Category: Regions
Cofide Revives Bond Issue
Peru’s development bank Cofide could roadshow its long-awaited $500m 144a/RegS 10-year as soon as December, though January may be a more realistic option, say officials at the development bank. The deal has been on the backburner since Ollanta Humala’s victory in the June elections left much uncertainty about how the newly elected left-wing president would steer the economy. Now with those concerns somewhat assuaged, Cofide is ready to move forward after completing talks with auditors. Officials see a final spread of 150bp over the sovereign as acceptable, though tighter pricing would be better. Deutsche Bank and JPMorgan have been mandated on the trade.
Bolivia in Discussions about Foreign Bond Foray
The Bolivian sovereign has been talking to 8 banks about raising at least $500m in the international bond market after sending out proposals (RFPs) earlier this year, says a spokes person at the ministry of finance. The sovereign is considering a 10-year 144A/Reg issue, marking what would be its debut foreign bond, at least in recent years. Proceeds from the Bolivia trade are expected to be used to finance investment projects. “We are taking advantage of better macroeconomic conditions to issue in the international market,” the spokesperson says. This comes after S&P revised its outlook on Bolivia’s B+ rating to positive, citing large infrastructure and investment projects that may benefit the country’s growth prospects. Moderate economic growth, steady inflation and a decline in net debt-to-GDP ratios all help support the country’s ratings. Bolivia is rated B+ by S&P and Fitch.
Lindley Heard Eyeing $300m-$350m 10-Year
Peru’s Corporacion Lindley, a non-alcoholic beverages company, is telling investors that it is looking to raise $300m-$350m through a 10-year bond, says an account who met the company this week. The BB+/BBB minus borrower has already seen investors in Lima, Santiago, London and New York. It will head to Boston today and will wrap up in Los Angeles on Thursday. The new issue will bring net-debt-to-Ebitda to around 4x, but there are plans to reduce that to 2.5x by 2015, assuming 9% growth, the investor says. Accounts are heard discussing a 7% handle, though some put it higher. Citigroup and JPMorgan are managing the process. The Lima-based company produces, bottles, and distributes Inca Kola among other carbonated and non-carbonated drinks such as fruit juices, isotonic beverages, energy drinks and mineral water. Lindley has strategic alliances with The Coca-Cola Company. This would be the issuer’s debut bond offering abroad.
Facileasing Plots Local Issue
Mexico’s Facileasing is preparing to issue up to MXP1bn ($74m) in the domestic market. The 3-year bonds will pay a spread over TIIE. BBVA Bancomer, whose parent company owns the Mexican vehicle fleet leasing company, is managing the sale. An issuance date has yet to be determined. Facileasing is rated AAA on a national scale.
Pemex Preps MXP Bond
Mexican state-owned oil company Pemex plans to issue up to MXP10bn ($735m) in the domestic market, market conditions permitting, says a Pemex spokesperson. “Given the current volatility, windows have been opening and closing quickly. When the next window opens we will look at executing a transaction,” he adds. So far, Pemex has filed its next proposed issuance under its MXP200bn bond program with Mexico’s CNBV. The proposed MXP10bn fixed-rate bonds will carry a 10-year tenor and will be guaranteed by Pemex-Exploracion y Produccion, Pemex-Gas y Petroquimica Basica and Pemex-Refinacion, according to Moody’s. The ratings agency has assigned a Baa1 global scale local currency and Aaa.mx national scale ratings to the deal. Pemex last sold a total of MXP10bn ($740m) in floating and UDI-denominated bonds in September. The MXP7bn 2017 floating rate bonds priced at TIIE +24bp and MXP3bn in 10-year UDI-denominated bonds came at 3.55%, or MBonos+95bp.
Scotia Makes Mexico DCM Hire
Scotia Capital has hired Roberto Guzman as director, debt capital markets, Mexico. Guzman previously worked as director of structured finance at Fitch Ratings, where he covered residential mortgage backed securities, commercial mortgage backed securities, asset backed securities and future flows issuances. He reports to Vinicio Alvarez, managing director, debt capital markets Mexico. Scotia was recently mandated, along with Bank of America Merrill Lynch (BAML) and HSBC, to take Mexican state-owed oil company Pemex on investor meetings in Canada.
Chilean Court Backs Codelco, Freezes Anglo Stake
A Chilean court on Tuesday issued an order to prevent global miner Anglo American from selling its remaining 75.5% stake in the Anglo Sur copper mining complex, following a controversial sale to Japan’s Mitsubishi. Anglo struck a $5.39bn deal last week to sell a 24.5% stake to Mitsubishi in an attempt to sidestep an option to sell a full 49% share to state-owned Codelco at a cheaper price in January 2012. The sale to Mitsubishi represents a multiple of 18.1x 2010 Ebitda, far higher than the 10.2x 2010 Ebitda multiple Anglo would realize if it sold a 49% stake to Codeco for $6bn, as stipulated in the option. Codelco filed an injunction following last week’s deal with Mitsubishi, “to stop Anglo’s threat of selling additional shares”, says a Codelco spokesman. Officials at Anglo American could not be immediately reached for comment. Codelco doesn’t question the sale to Mitsubishi, the spokesman adds, but it still expects Anglo to sell it a 49% stake as stipulated. According to the option, Codelco can buy a 49% stake as long as Anglo still holds a 100% in the venture, otherwise it must buy less. Codelco argues, however, that Anglo had already received notice of its intentions to buy the 49% stake and as such it must still sell that piece of the business next year.
TOClub in Default, Talks Forbearance
Newland International Properties, the owner of troubled Trump Ocean Club Hotel & Tower (TOClub), on Tuesday missed its first $31.4m capital payment due on $220m in 9.5% 2014 bonds and is now asking debtholders to sign a forbearance to stop all debt outstanding from becoming due immediately. “The company will miss the principal payment today,” John McCormack, managing partner for the Gapstone Group, an advisor to Newland, tells LatinFinance. Newland and Gapstone are asking bondholders to sign a forbearance that would allow the company to finish construction on TOClub and prevent the debt acceleration. McCormack says that no deal has been struck yet to restructure the debt outstanding and that it still remains to be seen if Trump will accept a reduction of its licensing fees to make TOClub apartments more attractive for buyers. Under the terms of bond indenture, an acceleration of the debt would subordinate Trump’s $38.9m fee to other payments, but it would also block Newland from using project proceeds to fund working capital to finish the project. TOClub bonds are rarely traded but they were being quoted at 62.50 or at 29.115% on a yield basis, after recently falling to 55.00. The Panama based luxury project has suffered from a strain on cash flows after cost overruns and buyers showed an unwillingness to close on apartment purchases.
IIC Signs $50m loan with Nordic Investment Bank
The Inter-American Investment Corporation (IIC) will use a $50m, 10-year term loan from the Nordic Investment Bank to promote renewable energy projects in Latin America and the Caribbean. The facility provides the flexibility of tapping different maturities. “These projects are long term so this facility matched the project,” says Juan Eduardo Zuluaga, IIC’s finance and risk management division chief. The interest rate will be defined at the time of disbursement, but can either be fixed or over Libor. He adds that the spread, which will be negotiated every time the IIC has a request, will be priced related to its AA rating. “The loan is the first step to create a strong relationship with the Nordic Investment Bank,” he says.