The Panamanian government hopes to pass a law approving a new sovereign wealth fund by the first semester of next year, Mahesh C. Khemlani, the country’s deputy minister of finance, told LatinFinance on the sidelines of the IMF meetings in Washington. The idea is to put any excess dividends from the Canal and other government projects into the fund, which could reach around $7bn in size by 2020, he added. The fund will act as savings for future generations and as a stability mechanism should the country, for example, suffer from fiscal imbalances. “This will reduce our dependency on debt,” he adds. The Panama Canal produces dividends equivalent to 3% of GDP, or around $1bn a year, and that could reach $5bn a year by 2025, Khemlani adds. The country has also discovered oil and has the largest undeveloped copper reserves in the world, he adds. Asset allocations have yet to be decided, but Khemlani sees much of it being invested abroad.
Category: Regions
Ford Mexico To Price This Week
Ford Credit de Mexico anticipates pricing as soon as Tuesday on an 18-month floating-rate domestic bond. The auto finance services company plans to issue up to MXP1bn ($76m). Price talk is in the TIIE + 100bp range. This will be Ford Credit’s first bond transaction in the local markets since 2007. Actinver, HSBC, IXE, Scotia Capital are managing the transaction, rated A2 on a national scale.
ICA Transfers Road Assets
ICA has sold 2 road concessions to the Red de Carreteras de Occidente (RCO) concession operator in which it owns a minority stake, for MXP2.15bn ($157m). ICA will get MXP1.8bn immediately for 100% of the Concesionaria de Vias Irapuato Queretaro and Concesionaria Irapuato La Piedad, and MXP350m in RCO shares if certain conditions are met. The additional shares would raise ICA’s stake to 18.7% from 13.6%.
Kiwi Uruguay Dairy Farmer Seeks Equity
NZ Farming Systems Uruguay, the New Zealand-registered Uruguayan dairy farmer, is planning to raise $120m via an equity rights offering. With an $85m loan from Olam, the Singapore-based agricultural firm which owns 86% of NZ, due in December, NZ says it must raise the equity or upsize the facility to $110m and extend its term. The matter will be put to a shareholder vote November 4. Olam has indicated it would exercise its rights in the sale, to be priced at $0.70 per share. Olam had offered minority holders this price in April when it sought and failed to take its ownership above the 90% threshold needed to delist NZ.
Interproperties Gets Ba3
Moody’s has assigned a Ba3 rating to Interproperties’ proposed $185m 2023 RegS-only bond, with a stable outlook. Interproperties, the real estate unit of Peru’s Intergroup, is meeting investors in Chile and Peru this week. The notes amortize in equal payments semiannually beginning March 30, 2015. The notes will be fully secured by the unit’s commercial real-estate assets operated by Real Plaza, and proceeds are to fund Real Plaza’s development of new products. IMTrust is managing the sale.
Canacol Eyes New Equity
Canadian oil company Canacol Energy, which operates in Colombia, Brazil and Guyana, is likely to tap the equity markets again in the next 18 months. “We would almost certainly raise new equity,” if the company’s current 12-18 month exploration program is successful, Mark Teare, Canacol’s vp of exploration says. A deal could come at any time during that period. Canacol got CAD57m ($58m) from a private equity capital raise in March, in a deal bought by managing banks, Cormark Securities, Canaccord Genuity, FirstEnergy Capital, Stifel Nicolaus Canada, Citi, Mackie Research Capital and TD Securities, Canacol says. Teare spoke at a conference organized by Bloomberg Thursday.
MILA Eyeing Mexico, Panama and Fixed-Income
Despite low volumes and a postponed Lima-Bogota Bolsa merger, exchange officials from the Mercado Integrado Latinamericano (MILA) markets see tie-ups with Mexico and Panama in the medium-term, as well as fixed-income cross-listing. “The two potential names are Mexico and Panama,” says Francis Stenning, CEO of the Bolsa de Valores de Lima. He notes Panama has shown the most interest. The next 5 years will be dedicated to improving the cross-listing platform and expanding to other countries, he adds. Thereafter MILA could focus on full exchange integration, and adding fixed-income cross-listings. There should also be room to develop additional products. “We would like to develop futures attached to MILA products,” says Maria Jose Ramirez, vp of the Bolsa de Valores de Colombia. Such products may not generate high volumes, but they should lure foreign investors, which is the true goal of the platform launched in March, Stenning says. Activity has been low so far, but it is hoped the Andean economies continue to remain isolated from global troubles and attract more outside funds. “Asia’s transformational growth story should continue,” even if events in Europe worsen, a particularly positive scenario for the Andean countries, says Jason Press, equity strategist at Citi. He notes a disconnect, in that global equities have priced in a global recession, while commodity prices are reflecting expectations of EM growth. Citi finds the latter to be the more accurate of the two scenarios. Peru, the highest beta among the three MILA markets, would see the most upswing, with Peruvian banks and mining companies such as Southern Copper particularly well-positioned. However, Peru would also be the most vulnerable to a double-dip. Stenning, Ramirez and Press spoke at a conference organized by Bloomberg Thursday in New York.
AMX Sounding Out Japanese Accounts
America Movil (AMX) is heard sounding out Japanese accounts for a potential Samurai transaction with Mitsubishi UFJ-Morgan Stanley and Mizuho. Additional details were not available. A Samurai would follow AMX’s $2bn 5-year bond and $750m retap of its 2040s done earlier this month in which it locked in the second lowest coupon ever achieved by a telecommunications company. AMX issued a CHF270m 2016 bond in August that came with a reoffer price of 99.775 to yield 2.039%, or mid swaps plus 86bp. AMX and the banks said to be involved were unavailable to comment. AMX is rated A2/A/A.
Compartamos Upsizes MXP Floater
Mexico’s Banco Compartamos has sold MXP2bn ($144m) in domestic bonds, up from the MXP1.5bn originally planned. The 2016 floating rate bond priced at TIIE + 85bp, in line with 80bp-90bp guidance. Demand reached 1.8x. About two-thirds of the proceeds are destined for the repayment of debt, while the rest will be used for lending. Banamex, Bancomer and HSBC are leads on the transaction, rated AA on a national scale. Compartamos last visited the local bond market in October 2010 when it sold MXP1bn in 2015 bond, paying TIIE + 130bp.
Fibria Reaches Non-Core Sale Agreement
Fibria has agreed to sell $313m in non-core assets to Oji Paper, firming up a process started last month when Fibria entered into exclusive talks with the Japanese buyer. The deal includes the Piracicaba facility that produces heat-sensitive, self-copying and couche paper, and marks the last of Fibria’s non-core assets to go as part of a long-term deleveraging plan. “They wanted to be a one-product company making pulp, and that’s their major product line,” a US-based industry analyst explains. The asset sale also helps bring down the company’s high debt, the analyst said. The deal is expected to close September 29, subject to government approval. Goldman Sachs advised Fibria.