Brazil’s EBX and global sports and media company IMG Worldwide have purchased sports agency Brasil 1 Sports and Entertainment for their recently created entertainment joint venture IMX. The holdco for Brazilian billionaire Eike Batista’s group of companies, signed a 50-50 joint venture with IMG in November with the aim of turning it into the leading sports, entertainment and arena company in the country. The IMX venture’s portfolio of projects includes the Volvo Ocean Race, the LPGA Brazil Cup, the Travessia dos Fortes open water marathon and the Ultimate Fighting Championship. A spokesman for EBX could offer no valuation details of the transaction and said the total amount paid for Brasil 1 will remain confidential. He could not immediately say if the partners used any financial advisors.
Category: Regions
Cemex Comfortable with Covenants
With a sooner-than-expected windfall from the Venezuelan government and a steady reduction of bank debt, Cemex feels comfortable meeting loan covenants going into the first half of next year, though this may be a different story as leverage ratios become more stringent by the end of 2012. “We have said we are highly confident that we will meet our year end [2011] covenants. If you take a look at our operating cash flow there is little question we will not do it,” says Maher Al-Haffar, vice president of public affairs and investor relations at Cemex. This comes as the borrower continues to contemplate ways to access the capital markets to cover a $6.7bn debt payment in 2014, wean itself off bank debt, and generally “de-risk” its balance sheet. “Bond holders will become more important,” says Al-Haffar. Fortunately for the cement company, it has some breathing space ahead of its 2014 payments at time when markets are still largely closed to high-yield names like Cemex. But this doesn’t mean that it will not take a proactive approach to capital market forays. “We have a track record at Cemex of being extremely anticipatory, and we know these things are not to be taken lightly,” he says. The company is poised to receive a sooner-than-expected windfall from the Venezuelan government, which has agreed to pay $600m equivalent as compensation for the assets taken in a nationalization campaign in 2008. Venezuela will make an initial payment of $240m in cash and $360m in securities issued by state-owned oil company PDVSA. Payment is expected anytime up to until December 12, after which time the company will clarify details about the PDVSA securities and what it intends to do with the proceeds. Al-Haffar indicated that proceeds could in theory be used to pay down debt and hence lower the amount of growth required to comply with covenants that call for leverage ratios of 6.5x by June 2012. Going forward, however, it may be a struggle to reach the 5.75x threshold set for the end
Infonavit Prices MXP RMBS
Mexico’s Infonavit has issued MXP1.1bn ($82m) of RMBSs backed by Infonavit mortgages in the domestic market. The state mortgage lender locked in its lowest coupon this year, with a UDI-denominated 2039 that was priced at 4.45%, inside talk of 4.50%, or 264bp over the government’s UDIbonos. The transaction was heard 1.7x oversubscribed after over 40 accounts participated, including private banking clients, insurance companies, investment funds, pension funds and bank treasuries. Proceeds will be used to create new mortgages. Banamex managed the sale, rated AAA on a local scale. Infonavit plans to issue a third RMBS under its MXP6bn program in February 2012 through Banamex and HSBC.
Petrotemex Closes Loan Amendment
Mexican petrochemical company Petrotemex has closed an amendment to its $600m loan after watching several European and Chilean banks decline to participate, and BBVA joining as a newcomer. Originally used to finance the company’s acquisition of Eastman Chemical’s PET business in the US, the facility keeps the original pricing structure, but changes from a 3-year bullet into a 5-year amortizer. The 5-year will require a $125m payment in 2013, $75m in 2014, $200m in 2015 and $200 in 2016, all in quarterly payments, with a smaller amortization in 2014 when the company has a bond maturing.
Spain’s BBVA joined the facility, while Credit Agricole, RBS, Banco de Chile and BCI dropped out. Existing bankers were paid upfront fees of 65bp, while new money entrants got 85bp. The amendment still paysLibor+300bp out of the box and was 10% oversubscribed. On the original transaction, Inbursa, Santander, ING, Credit Agricole and Bancomext came in as MLAs, while Scotia, Banco de Chile, Banorte and Bank of America participated as arrangers. Bank of Tokyo Mitsubishi, Bladex, Mizuho and Wells Fargo had been committed as managers. Credit Suisse and HSBC led the amendment.
Urbi Builds Local Issue
Urbi Desarrollos Urbanos has sold MXP600m ($44m) in Mexico’s domestic bond market. The homebuilder’s floating-rate bonds were priced at TIIE+400bp, wide to the TIIE+370bp-380bp expectations. The book size was heard at MXP700m with around 50% participation coming from institutional investors. Proceeds will be used to refinance existing long-term and short-term debt.. BBVA Bancomer managed the sale, rated A3 on a national scale. Urbi last visited the bond markets January 2010, issuing $300m in a cross-border sale.
PDVSA and Rosneft Ink Heavy Oil JV
PDVSA has signed a memorandum of understanding with Russia’s Rosneft on a deal to develop the Carabobo 2 oil project, one of three heavy oil projects planned by President Hugo Chavez. Rosneft will take a 40% stake in the joint venture and 60% will remain in the hands of PDVSA, in line with the 2 other ventures signed with foreign oil companies, Rosneft said in a statement. Company officials at Rosneft and PDVSA could not immediately be reached for comment. The deal would give Rosneft a stake in the development of the Carabobo 2 North and Carabobo 4 West blocks, estimated to hold 40bn barrels of crude and a hand in the creation of a crude upgrading plant to turn heavy oil into a more marketable crude. Once online, the fields are expected to produce up to 400,000 barrels of crude a day and the oil upgrading plants should offer a 200,000 barrel a day processing capacity. As agreed, Rosneft will pay $440m upon congressional approval of the deal, and $660m more once the final investment decision is made with PDVSA. The Russian oil company will also make available to PDVSA a $1.5bn credit facility, with disbursements capped at $300m a year. The two companies also signed additional agreements for joint ventures that will offer drilling and construction services to the heavy oil ventures. Global oil players such as the US’s Chevron, Spain’s Repsol and Malaysia’s Petronas have secured spots in the Orinoco oil ventures hoping to gain a place at the table in one of the richest pieces of oil real estate in the world. Venezuela holds one of the world’s largest reserves of heavy oil.
Banco de Bogota Bond Gets BBB Minus Rating
Fitch and S&P have each assigned a BBB minus rating with stable outlook to Banco de Bogota’s proposed USD senior unsecured notes. Colombia’s second largest lender is looking to raise a total of $1bn to in the bond and loan markets to pay back a 1-year $1.2bn bridge loan used for acquisition financing. The borrower was due to wrap up meetings with bond investors in New York and Los Angeles Thursday with Citi, HSBC and JPMorgan. Banco de Bogota is heard considering a $500m bond with a possible 10-year tenor, according to an investor who met with the name, but nothing had been announced as of late Thursday. Banco de Bogota is in the process of syndicating a $500m 3-year loan at Libor+225bp.
Urbi Poised for Local Bond Sale
Urbi Desarrollos Urbanos (URBI) is expected to price up to MXP1bn ($74m) today in the Mexican domestic bond market. Price talk for the Mexican homebuilder has widened out to TIIE+370bp-380bp area, from an earlier indications of TIIE+350bp. Proceeds will be used to refinance existing long-term and short-term debt. With the proposed issuance, Urbi will have no substantial debt maturities until 2014, says Moody’s, which rates the deal A3 on a national scale. BBVA is managing the sale. Urbi last visited the bond markets in January 2010, issuing $300m in a cross-border sale.
BNDES Authorized to Fund Eletrobras’s EDP Bid
BNDES would be able to finance Eletrobras’s bid for a stake in Portuguese state-controlled power company EDP under a new rule change. The government of President Dilma Rousseff has adjusted BNDES’ statutes, allowing the bank to use proceeds from external markets to fund the acquisition of assets or for projects and overseas investments by Brazilian companies. The move is being interpreted by observers as an indication that the development bank has been sanctioned to finance the high-profile acquisition. A BNDES spokeswoman says that the decree is very clear that only funds obtained overseas can be lent for asset acquisitions of this sort. That said, she notes, no final decision has been reached yet on any Eletrobras’s financing for the EDP transaction. Eletrobras and fellow Brazilian utility Cemig are part of a group of bidders for a 21.35% stake in EDP. Germany’s E.ON and China’s Three Gorges are reportedly also included in the bidding, the details of which are not yet public.
Rabobank Sells UF2m in Chile
Rabobank has raised UF2m (87.4m) in a Chilean domestic bond sale. The Dutch bank priced the inflation-linked 5-year bullet at 96.99 with a 3.05% coupon to yield 3.75%, or government bonds plus 128bp. Demand was 1.5x, according to a banker on the deal. Proceeds will be used to fund the bank’s operations. The bond is rated AAA on a national scale. Celfin and Deutsche Bank managed the sale.