Brazil’s central bank has granted Itau BBA, Itau’s wholesale and investment banking unit, approval to operate in Colombia. The bank, along with other Brazilians institutions including BTG, is said to be shopping in Colombia. Itau was recently said to be a finalist to take the 50% of Colpatria bought by Scotia in October. Itau BBA operates in Argentina and Chile and has a representative office in Peru.
Category: Regions
Posted inDaily Brief
Mitsubishi Upends Codelco’s Anglo Sur Ambitions
Anglo American has agreed to sell 24.5% of the Anglo Sur copper mining complex in Chile to Mitsubishi in a surprise $5.39bn deal. The move lands a blow to Chilean state copper company Codelco’s ambitions to secure a 49% stake in the venture. Mitsubishi swooped in on the chance to pay $5.39bn for only 24.5%, or a multiple of 18.1x 2010 Ebitda. Mitsubishi’s implied enterprise valuation for the entire project was $22.9bn. Codelco can now only buy a smaller, 24.5% piece. “The valuation is compelling,” an Anglo American spokesman says when asked to comment on the sale, which comes just ahead of the government’s option exercise date. Goldman Sachs and UBS advised Anglo American on the deal, according to company officials. Codelco sought to exercise an option in January 2012 to buy 49% of Anglo Sur paying an estimated $6bn, or 10.2x 2010 Ebitda. The option made this possible as long as Anglo American held 100% of the venture at the time, Anglo American officials said. Codelco officials could not be reached for comment, but in a statement the company said the transaction “doesn’t affect Codelco’s rights over 49% of the shares in Anglo Sur” and that it would “pursue all necessary actions” to defend its rights. Mitsubishi has been a long-time investor in Chilean copper and currently holds a 2.5% stake in Chile’s Escondida open pit mine.
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Ecuador Gets New Central Bank Head
Ecuador’s President Rafael Correa has named Pedro Delgado as the new central bank president. The change comes as part of cabinet shuffle, in which Jeannette Sanchez becomes minister of economic policy coordination. Finance Minister Patricio Rivera continues in his position.
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Vitro Debt Restructuring Extended
A court appointed arbitrator has asked for an extension in Vitro’s $3.6bn debt restructuring, marking the latest salvo in a controversial debt overhaul for the trouble Mexican glass-maker. Javier Navarro, a mediator charged with tallying bond-holder support for the borrower’s restructuring proposal, asked the court on Thursday for a 45-day extension in a process originally scheduled to end on Nov 14. “This gives me more time so I don’t have to declare company bankruptcy,” but it is not intended to provide creditors with a longer period in which to act, Navarro tells LatinFinance. This comes as some creditors cry foul after a Mexican judge allowed Vitro to include $1.9bn in intercompany debt as part of the bondholder tally. This has essentially allowed the company to say that 51% of holders have agreed to the terms, but left other creditors arguing otherwise. Vitro’s offer includes $814.7m in new 2019 bonds, a fee of up to $32.7m and mandatory convertible debt of $95.8m. When all is said and done, JPMorgan reckons that creditors who accept the deal may recover between 48 and 60 cents on the dollar, depending on the level of debt-holder support. “Bondholders are being trampled on,” says a Vitro investor who declines to be named. A Vitro official would only say that under current conditions negotiations will likely continue until early 2012.
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Peru to Make Rate Decision
Peru’s central bank is scheduled to meet today to set the country’s benchmark interest rate. Shops including Credit Suisse and BBVA see the bank again holding the rate at 4.25%.
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Colpatria Preps Local Bond Sale
Colombia’s Banco Colpatria is set to sell COP80bn ($42m) in subordinated bonds in the local market today. The 2021 bonds should pay interest of IPC plus up to 5.25%. Alianza Valores is managing the sale, rated AA on a national scale. In October 2010, Colpatria sold COP200bn ($108m) in 10-year subordinated bonds priced at par. Those bonds paid IPC+5.20%.
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Mitsubishi Nabs Chilean Salmon Play
Japan’s Mitsubishi has agreed to pay $125m for Chile’s Salmones Humboldt, as it expands its salmon fishing business in South America. The deal is valued at roughly JPY10bn ($125m), Mitsubishi says, and was executed through its subsidiary Southern Cross Seafoods (SCS). Mitsubishi officials could not be reached for comment, and Salmones Humboldt did not return calls seeking additional information. Salmones Humboldt is based in the southern city of Puerto Montt where Mitsubishi’s SCS unit is also located. The acquired company has a processing and farming capacity of 20,000 metric tons a year, according to Mitsubishi estimates. SCS currently holds a 10,000 metric ton-a-year capacity. The move is the latest in the consolidation of fishing sectors in Chile and Peru in recent years.
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Banobras Heard Talking Price
Banobras is heard looking to pay TIIE+0bp-5bp on a new 4-year floating rate bond that is part of a MXP5bn ($369m) domestic market sale. It is also expecting to pay Mbonos + 80bp for a 10-year fixed-rate portion and Udibonos + 60bp for a 10-year UDI-denominated piece. The government-backed Mexican development bank plans to hold the 3-tranche sale on November 16, according to a banker on the deal. It had been originally aiming to price this week. Bank of America Merrill Lynch and Banamex are managing the sale, rated Aaa on a national scale. Banobras last issued in the local market in 2010 via Banamex, when it sold MXP7bn in 4-year bonds after generating some MXP19bn in demand.
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HSBC Hawks LatAm Assets
HSBC is seeking to sell some of its assets in Latin America, including part of the bank’s insurance business, operations in smaller markets, as well as its Brazilian consumer finance arm, according to people familiar with the process. The bank is primarily seeking to sell off its property and casualty insurance business in Argentina and Mexico, where the bulk of that business lies, in a deal that could reach $1bn. Separately, HSBC is also seeking to shed several units in certain smaller LatAm countries, in what could be another $1bn deal. Finally, the bank is also looking to sell its consumer finance arm in Brazil. HSBC has retained Goldman Sachs as an advisor in the insurance sale process, and its own investment banking division is also advising in all three sales efforts, according to people with knowledge of the bank’s plans. A spokeswoman for HSBC declines to comment. Global and regional players have shown interest for the bank’s assets in LatAm, according to the people familiar, but noted that HSBC’s consumer finance arm in Brazil is a business that would likely make more sense for an established local bank that can leverage those assets.
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Infonacot Preps MXP Securitization
Mexican state-run lender Instituto Fonacot plans to raise up to MXP2.5bn ($183m) in 3-year bonds, which it is aiming to issue on December 2. The consumer-loan backed bonds will pay a spread over TIIE. Scotia and BBVA Bancomer are managing 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.