Mexican homebuilder Urbi Desarrollos Urbanos is preparing to raise up to MXN1bn ($74.5m) through the sale of a 2014 floater. Proceeds are expected to be used largely for debt refinancing. BBVA is managing the sale, which is rated A minus on a national scale rating.
Category: Regions
Posted inDaily Brief
Rubiales Defines Convert Offer
Pacific Rubiales has defined the premium it will offer holders of its 2014 8.0% convertible bonds to convert to equity early. For each CAD1,000 ($988) face value tendered, the Toronto-based Colombian oil producer is offering 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 is open from November 9-29. Pacific Rubiales says it is undertaking the offer “to bring maximum balance sheet flexibility” so that it can pursue and execute its acquisition strategy. RBC is managing. Pacific Rubiales is also meeting bond investors on 3 continents this week, perhaps considering a cross-border bond transaction.
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Intercorp Tests High-Yield Appetite
Peru’s Intercorp Retail Trust (IRT) priced a $300m 2018 bonds Monday after watching the book grow to some $650m in size. The deal generated its fair share of interest given it was one of the few sub-investment grade credits to hit the LatAm market in recent months. Investors had fretted about IRT’s credit metrics – total adjusted debt to Ebitdar of around 5 x—as well as its holdco status, but its ability to get a deal done in what remains an uneasy backdrop holds out hope for other high-yield names waiting in the pipeline. Part of the IFH Group, IRT is the holdco for a financial company, department and improvement stores, as well as a supermarket and pharmacy chain. The B1/BB minus rated issue priced at par to yield 8.875%, in line with earlier guidance and had been trading in the grey at +0.25 to +0.875 above reoffer. Final pricing equated to a spread differential of some 27bp over the parent company’s existing 8.58% 2019 bonds trading at UST+715bp on a yield-to-worst basis. Investors were also heard looking at the pick-up to similarly rated Peruvian credit Inkia Energy’s 10NC5 (BB minus/B1), which was being quoted at around 675bp over. Participation mostly came from US asset managers and insurance companies, private banking in Latin America and Switzerland with some hedge fund participation. Proceeds are be used for a combination of debt refinancing and capital expenditures. Bank of America Merrill Lynch and JPMorgan led the transaction.
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Interproperties Places RegS in Local Markets
Interproperties Finance Trust (IFT) has priced a $185m senior secured RegS-only 2023 bond at par to yield 8.75%. The notes amortize in equal payments semiannually beginning March 30, 2015 and will be fully secured by the unit’s commercial real-estate assets operated by Real Plaza. Proceeds will go toward new investments and to refinance existing loans. The real estate unit of Peru’s Intergroup, met only with the local investors and placed the paper in Peru (60%) and Chile (40%). Buyers included pension funds (45%), private banking clients (25%) and other types of institutional investors. (30%). Local Chilean shop IMTrust acted as lead. Ratings are BB minus/Ba3 by Fitch and Moody’s.
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Medina-Mora Gets New Post in Citi Reshuffle
Manuel Medina-Mora has been named Citi’s CEO of global consumer and commercial banking, as part of an expanded role that comes along with several other high-level moves at the bank. Medina-Mora maintains oversight at Citi Latin America and Mexico, and remains a member of the Citi Latin America executive committee, reporting to CEO Vikram Pandit. Also, Francisco Aristeguieta, head of global transaction services for LatAm, has been promoted to CEO of Latin America, while Javier Arrigunaga, head of the Mexico institutional clients group, has been named CEO for Mexico. Both will report to Medina-Mora. All changes begin January 1.
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CNOOC, Bridas Abandon $7bn PAE Purchase
A joint venture between China’s CNOOC and Bridas Energy Holdings (BEH) has decided against purchasing a 60% equity interest in Argentina’s Pan American Energy (PAE) from BP. Earlier this month, talks had been extended with BP to acquire the British oil company’s stake in PAE for $7.06bn in cash, and a final closing date had been expected sometime next year. This comes shortly after the Argentine government’s mandate in October calling for oil and mining companies to repatriate export earnings. In a statement, Yang Hua, CNOOC’s CEO, expressed a willingness to strengthen its partnership with BEH and expand in Argentina, but noted that “…certain conditions precedent to the completion of the deal were not obtained as expected, and Bridas chose to terminate the transaction”. The sale of BP’s 60% stake in the Argentine oil company was agreed in late 2010, after which Bridas paid BP $3.53bn as an initial deposit. The agreement states that should the sale fall through, BP would return the deposit and pay an additional $700m for “amendments to the Pan American Energy limited liability company agreement,” according to a statement in BP’s recently released 3Q 2011 earnings report. The sale of its stake in Pan American Energy was agreed as part of BP’s strategy of selling a number of worldwide assets following the Gulf of Mexico oil spill. Standard Chartered was advising BP.
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DR Gets $200m IDB Loan
The Dominican Republic’s electricity sector is getting a boost with a $200m loan from the Inter-American Development Bank to aid in “efforts to improve the efficiency, financial management, supply and service quality of the energy sector.” The 20-year loan has a 5-year grace period and an undisclosed interest rate with a spread over Libor. It builds on previous IDB development in the area, which has included a sector modernization plan, power transmission improvements and other reforms.
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Kirin Pays Top Dollar for Rest of Schincariol
Japanese beer company Kirin struck a $1.35bn deal with minority shareholders of Brazilian brewer Schincariol, to acquire the 49.54% stake in the company that it didn’t already own. The deal comes just three months after Kirin agreed to pay $2.52bn for 50.45% of Schincariol, a transaction that, at the time, represented an enterprise value (EV) to Ebitda of 15.7x, significantly higher than the price paid in previous brewer company acquisitions. With the latest stake purchase, analysts estimate the final full acquisition figure for Schincariol at anywhere between 13 and 15x EV/Ebitda, higher than the prices paid for Heineken’s purchase of FEMSA Cerveza, estimated at 11x. “During the last 5 to 10 years in this business, the range has been 10 to 15x,” said Lauren Torres, a consumer products analyst at HSBC. Although the Brazilian market has seen a slowdown in consumption of late, Torres points out that with the growth these companies have seen in recent years, companies like Kirin feel that Brazil is definitely a place to do business. Kirin’s acquisition of Schincariol was not easy. Its initial stake purchase in August sparked the ire of minority holders which took their grievances to court seeking to block the sale. A court finally lifted the injunction and allowed the deal to proceed in mid-October. Schincariol’s majority owners originally hired BTG Pactual and Mattos Filho as advisors, while minority holders at one point worked with Teixeira Martins & Advogados. Kirin hired Citi, TozziniFreire Advogados and the Tokyo-Marunouchi Law Offices.
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Miner Launches Peru Funding
Toronto-based Sulliden Gold has raised CAD75m ($74m) to fund its Shahuindo mine in Peru, through a bought equity deal. The miner has sold 43.4m common shares at CAD1.73 each to National Bank Financial and Cormark, which may syndicate the shares. The two have an option to buy an additional 6.5m shares for up to 30 days. Proceeds will be used to expand the exploration program at the Shahuindo gold and silver project in Peru, to acquire additional mining concessions adjacent to Shahuindo, and to fund other activities at the property and for general corporate purposes.
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TGI Gets Fitch Upgrade
Fitch has raised Transportadora de Gas Internacional’s rating to BB+ from BB. The action reflects the recent upgrade of parent Empresa de Energia de Bogota (EEB) to BB+. The Colombian gas transporter has also improved its cash flow generation due to recent investments, the ratings agency says. The outlook is stable.