Colombia’s Grupo Exito has started the sale period for its COP2.502trn ($1.40bn) equity follow-on, which will close September 23 and see allocations finished by the September 27. The retailer is offering 114.27m shares at COP21,900 each, which it says represents an 8% discount to the COP23,800 average price over the month to the announcement of the deal. The company’s shares closed at COP23,000 Tuesday. Majority shareholder Grupo Casino intends to subscribe in line with its rights, leaving 45% of the deal, or COP1.126trn worth of shares available to the public. Exito had indicated it would seek to raise $1.4bn in equity to help fund the June acquisition of Grupo Casino’s Disco, Devoto y Geant supermarket businesses in Uruguay for $746m. Casino holds a 62.5% in Disco and Geant, and a 96.5% stake in Devoto. Credit Suisse, JPMorgan, Citi and Santander are managing the international sale, with Corredores Asociados leading the domestic portion.
Category: Regions
S&P Raises Peru Banks
S&P has raised the ratings on four Peruvian banks following last week’s upgrade of the sovereign to BBB from BBB minus. The system’s three largest, Banco de Credito del Peru (BCP), BBVA Continental and Scotia Peru, were each lifted to BBB from BBB minus, with stable outlooks. The upgrade comes at a useful time for BCP, as it is finishing road shows this week for a possible cross-border bond, through Bank of America Merrill Lynch and Morgan Stanley. State-backed Corporacion Financiera de Desarrollo (Cofide), another with designs on a 144a deal before the end of the year, was also lifted to BBB.
CABEI Brings Triple-Market Bond
The Central American Bank for Economic Integration (CABEI) has placed $67.6m 10-year bond into three Central American markets, marking the first time a borrower has simultaneously registered and sold debt in three of the isthmus’s countries. The 2021 bond priced at par and offered buyers in Panama Costa Rica and El Salvador a coupon that steps up from 2% to 3% after year two, to 4% in year five and to 6% in year seven. Yield to call and yield to maturity for the $67.6m bond came in at 2.6% and 4.3%, respectively. The bonds are callable after 4.5 years. The development bank issued $31.6m in Costa Rica, $22m in El Salvador and $14m in Panama. Local pension funds and banks were the main investors. The multilateral bank’s issuance represents the first time a bond has been simultaneously registered and sold in three local capital markets in the region. Citi led the transaction, rated AAA locally in Costa Rica and El Salvador. A local rating in Panama was not required.
EPM Telecom Eyes Local Bond
UNE EPM Telecomunicaciones, the telecom unit of Colombia’s Empresas Publicas de Medellin, is aiming to raise COP300bn ($168m) in the domestic bond markets in the fourth quarter. The issuer is to choose among maturities of 1-15 years, set to the DTF, IBR and IPC rates. Correval is managing the sale, rated AAA on a national scale.
Peru Retap on the Horizon?
Bankers are heard pitching Peru to reopen its 2050 bonds, in a move that could lock in historically low yields much like Mexico did in its August century bond retap, according to market participants. Investors say there is demand for yield and duration, making it sensible for Peru to retap the 2050s. A recent upgrade to BBB from BBB minus by S&P, may have also brought the sovereign one step closer to issuing debt in the international markets. While it is expected the sovereign will favor a local-currency trade, in July it filed to issue up to $5bn in new debt securities with the SEC. It remains to be seen what the sovereign would decide in terms of size, tenor and timing if it opts to issue in the dollar market, bankers say. “With low USTs both a retap and a new 10-year would work,” notes a DCM banker. The republic originally sold $1bn in the 2050s last year, along with $1.5bn-equivalent in retapped sol-denominated 2020s. As of Friday afternoon Peru’s 2050s were quoted at 106.75 or at 5.29% on a yield basis.
MBono Syndicated Auction Set for Wednesday
Mexico has scheduled its MXP25bn ($2bn) MBono auction for Wednesday. The 2031 bonds come with a coupon of 7.20%. The government began selling some of its domestic bonds through this type of larger syndicated sale in 2010 with the aim of allowing a large offering in one fell swoop rather than having to build outstanding size incrementally through a series of auctions. The bonds also qualify for inclusion in key indices and draw in a broader group of investors.
S&P Raises Fertinal
S&P has raised the credit rating of Mexico’s Grupo Fertinal to B+ from B. “Fertinal’s financial performance has been strong relative to our expectations, particularly in the first half 2011,” the agency says. In particular, the fertilizer producer’s Ebitda for the 12 months ended June 30 was about $130m, up from $98m at the end of 2010. The increase reflects higher capacity utilization as a result of Fertinal’s ramp-up process and the continued increase in diammonium phosphate and mono-ammonium phosphate prices. The outlook is stable.
Chinese Trio Takes Stake in Brazilian Miner
Taiyuan Iron and Steel Group, CITIC Group and Baosteel Group have set up an investment vehicle to acquire a 15% stake in Brazilian miner Companhia Brasileira de Metalurgia e Mineracao, for $1.95bn, according to Chinese state media. CBMM, as the privately-held target is known, specializes in the rare earth metal Niobium, which is used in the production of high-grade steel. The deal from the three state-owned enterprises follows a March transaction by a consortium of Japanese and South Korean companies, also acquiring a $1.95bn stake. CBMM is part of the Moreira Salles Group and operates primarily in the state of Minas Gerias.
Swedes Squeeze into Brazilian Diapers
Swedish paper group Svenska Cellulosa (SCA) has agreed to acquire Brazil’s Pro Descart for SEK450m ($70m). The privately-held Brazilian maker of diapers and other hygienic products booked about $56m in revenue last year, SCA says. The parties would not comment on advisors used in the transaction. It is the first venture into Brazil for SCA, which has a presence in Mexico and several Andean countries.
Transelca Aims for October Pricing
Colombian power transmission firm Transelca plans to sell COP180bn ($100m) in domestic bonds in October, says a company official. The unit of ISA will select from among 7-15 year maturities that will be priced either over inflation or the DTF benchmark rate. Proceeds are marked for debt management and for working capital. Correval, Bancolombia and BBVA are leading the sale, rated AAA on a national scale.