Brazil’s Cemig plans M&A growth across all of its business areas both internationally and domestically, and needs cross-border debt to fund it, its CFO says. “The market is not open for issuance in the international market, but we are continuing to evaluate the market for a window to issue,” Luiz Fernando Rolla tells LatinFinance. Cemig’s Taesa unit this week opted to issue BRL1.4bn ($783m) in domestic short-term debt to help fund the June purchase of a 50% stake in Abengoa Brasil to tide it over until a preferred cross-border bond is available. While competitive local market financing is considered more attractive than cross-border, as tax costs associated with cross-border issuance make international bonds less appealing, Rolla reiterates that local markets are not deep enough to finance Cemig’s expanding capex needs and M&A plans. “We have plans for M&A in the short-term and Cemig will use maximum effort to acquire and add value to our company,” Rolla says. Cemig seeks both organic and M&A growth across all 3 of its business areas – generation, transmission and distribution. Cemig is considering buying a 10% stake in the $11bn Belo Monte hydroelectric dam in Brazil’s Para state in a joint effort with power distributor Light. Cemig is also holding talks with Energias de Portugal (EDP) over a stake in two distribution assets which represent 20% of the total assets of the Portuguese power utility. “We will visit Portugal to demonstrate interest and if everything goes well we will make an offer,” Rolla says. The company is also eyeing the auction of five Chilean transmission line assets and may bid in partnership with Abengoa Spain or Sao Paulo-based Alupar Investimento. Further details of the potential transactions were not disclosed. Bradesco, Citi, and Santander have been hired to lead the potential cross-border sale, to be done in BRL or USD for about BRL1.2bn equivalent. The one-year local promissory notes announced this week pay the DI plus up to 106%. Taesa l
Category: Regions
EEB Launches Follow-on
Empresa de Energia de Bogota has launched a COP700bn ($360m) equity follow-on. The Colombian utility is offering 538.5m shares at COP1,300 each through October 27. The per share price represents a 1.1% discount to Thursday’s COP1,315 close. EEB plans to use the proceeds from the offering to fund its expansion plans. Corredores Asociados is lead manager.
ETB Names New President
Colombia’s Empresa de Telecomunicaciones de Bogota (ETB) has named Mario Contreras Amador as its president, it says. He replaces Fernando Carrizosa Rash-Isla, who resigned from his position at the end of August. Contreras had been ETB’s vice president of finance.
Peru Holds Rates
Peru’s central bank has decided to keep its benchmark interest rate at 4.25% for the fifth straight session, in line with the markets’ expectations. “The decision takes into account the slower growth seen in some areas of spending and production, as well as the increasing international financing risks,” it says.
PacRu to List in Brazil
Pacific Rubiales has initiated the process to list Brazilian Depositary Receipts on the Sao Paulo stock exchange, it says. The move will allow the Colombian oil and gas explorer, already listed in Toronto and Bogota, to broaden its investor base. No new shares will be issued as a result of the process.
UNE Postpones Local Bond
UNE EPM Telecomunicaciones, the telecom unit of Colombia’s Empresas Publicas de Medellin, is now eyeing the week of October 17 to place a COP300bn ($153m) domestic bond, according to a banker on the sale, after originally expecting to sell this week. In what would be the first local Colombian bond sale from a non-financial institution in several months, the issuer is able to chose among maturities of 1-15 years, paying a fixed rate or spreads over the IBR, DTF or IPC. Correval is managing the sale, rated AAA on a national scale.
Peru Expected to Hold Rates
Peru is expected to keep its benchmark interest rate at 4.25% for the fifth straight session when the central bank meets today. Most analysts see a pause as the global economic slowdown is tempered by higher inflation, though some, such as Barclays, call for a 25bp cut. The bank left the door open to a cut in a September statement, if the global outlook continued to deteriorate. However, Central Bank head Julio Velarde said publicly September 21 that he saw no need to change monetary policy.
AMX Gets Japanese Rating
Japan Credit Rating Agency has assigned an A rating with stable outlook to Japanese yen-denominated bonds from America Movil (AMX). The Mexican wireless operator was heard sounding out Japanese accounts for a potential Samurai bond transaction via Mitsubishi UFJ-Morgan Stanley and Mizuho in late September. Additional details were not available. A Samurai deal would follow AMX’s $2bn 5-year bond and $750m retap of its 2040s done in September. America Movil is currently also looking at the Euro market, and is scheduled to wrap up fixed income meetings in Frankfurt on Friday.
Concession Operator Prices MXP ABS
Concesionaria de Autopistas del Sureste has sold a MXP3.5bn ($276m) toll road securitization in Mexico’s domestic bond market. The Chiapas-based operator priced the 26.5-year UDI-denominated bonds at 6.0% or UDIBonos+335bp. “At the end of the day this was a transaction that supports [Mexican] infrastructure,” says one banker on the deal. Demand for the 2038 bonds saw an oversubscription of 1.24x. Banamex and Santander led the transaction, rated AA on a national scale. Sureste is owned by Spain’s Aldesa.
Holcim Mexico to Issue up to MXP2bn
The Mexican unit of Holcim plans to issue up to MXP2bn ($144m) in the domestic bond market next week, conditions permitting, say bankers on the deal. The bonds, rated AAA on a national scale, will be guaranteed by its Swiss parent. The cement company is considering 3-year floating rate and 10-year fixed rate bonds. Proceeds are to be used to refinance debt. BBVA, Banamex and Santander are handling the transaction, representing a debut for the cement maker in the Mexican market.