Colombia’s ISA is watching the domestic market in hopes of selling a bond before the month ends. Size and details must still be finalized, according to a company official, and the issuer is able to sell COL641bn under its debt program. Citi, Corredores Asociados, Correval and Interbolsa are managing the sale.
Category: Regions
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Panama Hydro Secures $155m Loan
Panama’s Bajo Frio hydroelectric project has signed a $155m 15-year term loan to help fund construction. Netherlands Development Finance Company (FMO) and Norwegian DnB Nor are mandated lead arrangers for the financing, and will lend $47.5m each to the project. French development financer Proparco will provide $35m, and Germany’s DEG, $25m. The interest rate was not disclosed. A person familiar with the deal calls the transaction competitively-priced, noting that it would be unlikely to be able to get the same pricing in today’s market. The Bajo Frio project is owned by Panama’s Fountain Intertrade, a joint venture between Norway’s Agua Imara and Panama’s Credicorp Group via their subsidiaries SN Power ACA Holding and Panamá Hydroelectric Ventures, respectively. It has an expected cost of $224m.
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PacRu Hits the Road
Colombia’s Pacific Rubiales plans to meet bond investors in Canada, the US, Europe and LatAm starting next week. The Ba3/BB borrower will see accounts beginning November 7 in London, and visit New York and Santiago Tuesday, Boston and Lima Wednesday, Los Angeles, Bogota, and Paris Friday, before wrapping up in Bogota and Switzerland on Saturday. Bank of America Merrill Lynch (BAML) is managing the process. One of Latin America’s largest private oil and gas companies, Pacific Rubiales has principal operations in Colombia, Peru and Guatemala. It last issued a bond in November 2009 when it priced $450m 8.75% 2016 bonds to 8.95% yield via BAML and Citi. Fitch upgraded Pacific Rubiales to BB from BB minus Thursday.
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NROCC Brings Rare Single B Bond
Jamaica’s National Road Operating and Constructing Company Limited (NROCC) priced a $294.18m 2024 bond Thursday after generating some $400m demand, marking the first single B credit to hit the market in quite some time. Proceeds are going to take out 8% notes due 2012. With some solid anchor orders behind it, the 144a/RegS bond was able to price and close within a matter of hours, coming at par to yield 9.375%. Interest came from both Caribbean and dedicated EM accounts, who were comping against the sovereign and Air Jamaica bonds. The sovereign’s 2019s and 2025s were trading around 7.25%-7.50% and 8.25% area. “The market is still choppy. With a low single B credit you need to come out with some critical anchor interest from local accounts,” says one banker. The B3/B minus credit comes with a 100% guarantee from the Jamaican government. Credit Suisse was the sole bookrunner and Oppenheimer & Co. was co-manager on the transaction. The bonds have a 13-year life with 12.5 average year life. The notes are redeemable in whole or in part by the issuer at a make-whole premium of T+100 basis points.
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Investors Flock to New ICE Bond
Instituto Cosarricense de Electricidad (ICE) dived directly into pricing on its $250m 10-year Thursday after investors flocked to the rare credit, helping leads build a book that reached around $2bn in size. Whispering low to mid 7s earlier this week, leads essentially closed the books on Wednesday after receiving healthy demand and skipped guidance yesterday to launch and price at par to yield 6.95% or 488bp over UST. Viewed simply on its spread differential to the sovereign, ICE’s new bond was seen as extremely attractive to some investors who were also drawn to the credit’s rarity value, and quickly pushed the bond up close to 4 points in the after market. Some shops had the sovereign’s 9.995% 2020s trading Tuesday at 4.88%-4.71% on a yield basis, or at UST+272bp, making for an alluring spread differential. Leads, on the other hand, were heard spotting the same bonds at 285bp-305bp, calculating that a new sovereign 10-year would come at 315bp-335bp and putting the spread to ICE’s new bond at around 163bp. Other sovereign-to-quasi differentials vary from country to country, and from credit to credit. For instance, in Brazil, quasi sovereign utility Eletrobras 5.75% 2021s have been trading with 185bp differential, while in Colombia the spread is around 165bp for a credit like EPM. Assuming Costa Rica was penalized somewhat against its other quasi peers for not being eligible for index inclusions, leads were heard calculating a 10bp-30bp new issue premium. Citi and Deutsche Bank managed the sale, rated Baa3/BB+, the issuer’s first cross-border deal since 2004.
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Contour IPO Aims for November Launch
ContourGlobal LatAm is targeting a launch of its Bogota IPO before the end of the month. The power generator with assets in Colombia and Brazil plans to sell 27.6m shares, or about 28% of itself. As is customary in Colombia’s local ECM, it will indicate the price when it sets the launch date. The issuer, part of US-based ContourGlobal, is raising funds to develop projects. The company’s main operating assets include a stake in the Termopaipa and Termoemcali power plants in Colombia, as well as a wind farm and two hydroelectric projects in Brazil. Bancolombia and Corredores Asociados are managing the sale.
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Pichincha Considers Dollar Bond
Ecuador’s Banco Pichincha continues to evaluate opportunities to issue a dollar bond in the international markets, says Pichincha general manager Fernando Pozo. Timing has yet to be determined, though a $100m bond is one of several options being considered. Active on the M&A front, the potential issuer has kept busy by purchasing assets locally and abroad. Over the last twelve months, it has snapped up targets in Ecuador from GAMC and Lloyds Bank and is currently eyeing buys in Spain. Pichincha works with NY-based M&A boutique investment firm Athelera and has yet to select banks for a potential bond transaction. Pichincha has issued shorter term dollar debt, but has yet to sell long-term debt internationally.
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EEB Targets Low 6s
Empresa de Energia de Bogota (EEB) is set to price a $610m 10NC5 bond as soon as today after whispers were heard in the low 6% area Wednesday. Both EEB and Costa Rica’s ICE aim to pull the trigger today against what was a better market backdrop Wednesday. The split rated Baa3/BB+ Colombian utility is raising money to fund a call on its $610m 8.75% 2014 bond. With EEB’s outstanding bonds already trading around the call price, investors are largely comping against Empresa Publica de Medellin’s (EPM) 7.625% $500m 2019s, which have been trading around 5.10%. One investor said he would require a 25bp premium for EEB’s split rating versus the Baa3/BBB on EPM, plus another 50bp for EEB’s holdco status and perhaps some extra pickup to compensate for volatility. “I think that a 6.20% area should be ok, but maybe EEB can tighten from there if they have good momentum,” the investor adds. “At low 6% EEB looks good at 100 over EPM,” adds a portfolio manager. Even at 6.25% yield, investors say the deal would represent a juicy pick-up to the sovereign’s 10-year bonds which were trading at 3.60% Wednesday. Deutsche Bank and Santander are managing the sale. Last month, EEB launched a COP700bn ($360m) equity follow-on and is expected to upsize the deal to about COP770bn.
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Cnooc, Bridas Extend Talks for PanAm Stake
The joint venture between China National Offshore Oil Corporation’s (CNOOC) and Argentina’s Bridas has extended its talks with BP to acquire the British oil company’s majority stake in Pan American Energy for $7.06bn in cash. The parties had set November 1 as a final date for an agreement, but they decided to continue talks as regulators in China and Argentina work on a final approval. A BP spokesman said no new tentative final date has been agreed between the parties and noted that a final closing of the sale will happen sometime in 2012. 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 the company’s strategy of selling a number of worldwide assets following the Gulf of Mexico oil spill. Standard Chartered is advising BP.
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Galp Talks with Bidders on Brazilian Stake
Portuguese oil and gas company Galp Energia is in talks with a shortlist of bidders for a stake in its Brazilian operations, according to a company official. Galp has been seeking to raise at least EUR2bn ($2.75bn) in Brazil and has sought to sell as much as 40% of its business in the South American country, which includes a participation in one of LatAm’s largest oil discoveries. Spokesman Tiago Villas-Boas says the company plans to settle on a buyer and conclude the transaction by the end of November. The financial details of the deal should be finalized before the year is out, he adds. The Galp official declined to say who the bidders involved are or if China Petroleum & Chemical is one of them. Galp in Brazil has stakes in oil wells located in the oil-rich Santos Basin, including the Lula find, considered the second-largest oil discovery in the region.