Moody’s has upgraded the ratings of Banco do Brasil’s Bolivian branch to ba1 from Ba3. the outlook is stable. The ratings action follows the upgrade of Bolivia’s sovereign ratings to B1 from B2 with positive outlook. The bank is headquartered in La Paz, Bolivia, with assets of BOB170.1m and equity for BOB123m, as of September 2010.
Category: Regions
Posted inDaily Brief
Grupo Mexico, AMC Get Upgraded
Fitch has upgraded the ratings of diversified conglomerate Grupo Mexico to BBB from BBB minus. The outlook is stable. The upgrade reflects the resolutions in the company’s favor of the five-year long Asarco bankruptcy proceedings, which ended with Grupo Mexico receiving full ownership with no legacy liabilities, the resolution of a labor strike at its Cananea mine and the likely merger of Ferromex and Ferrosur. For the last 12 months to September 2010, Grupo Mexico generated Ebitda of $3.2bn, with positive free cash flow of $593m after capital expenditures and dividends. In terms of liquidity, consolidated cash and marketable securities of $3.1bn covers impending consolidated debt maturities at the subsidiary levels up to 2014. On a standalone gross debt basis, Grupo Mexico currently holds $10m of debt, Fitch says.
Posted inDaily Brief
GFM Ratings Upgraded by Fitch
Fitch says it has upgraded the ratings of Mexican railroad company Grupo Ferroviario Mexicano (GFM) to BBB from BBB minus. The outlook is stable. The upgrade reflects the company’s strong performance despite challenging economic conditions and its strong capital structure. GFM’s liquidity level is strong with $156m of cash and marketable securities as of September 30, compared to debt service requirements of $136m up to 2015, Fitch says. GFM has a 53% market share of railway load distribution.
Posted inDaily Brief
KCSM Extends Bond Tender
Kansas City Southern de Mexico (KCSM) has extended a tender for its 2013 and 2016 bonds to December 17 from December 1, it says. Holders of $142m in principal of the $175m outstanding in 7.625% 2013s and of $32m of the $150m outstanding in 12.500% 2016s had accepted as of December 1. KCSM had offered holders of the 2013 bonds $1,040.63 per $1,000.00 principal before the November 16 early deadline and $1,010.63 after. Holders of the 2016 bonds were to receive $1,240.00 per $1,000.00 principal prior to November 16, and $1,210.00 after. Bank of America Merrill Lynch is managing. KCSM has said it plans an unspecified debt transaction to fund the offer. Kansas City Southern is rated B1/BB.
Posted inDaily Brief
BTG Sells Pricey Stake
BTG Pactual has issued $1.8bn in new shares to a consortium of investors. The group includes Singapore’s GIC, China’s CIC, Canadian pension fund OTPP, Abu Dhabi Investment Council, JC Flowers, RIT Capital Partners and Lord Rothschild’s family interests. Other investors are the Santo Domingo Group, EXOR, the Agnelli family, Inversiones Bahia, the Motta family, and senior management of BTG Pactual. As a result of the capital increase, which represents an 18.65% stake, the Brazilian bank will now have shareholder equity of approximately $4.3bn. The deal implies an enterprise valuation of $10bn, or 4x book for the bank prior to the investment. Bankers expressed surprise at the multiple, though it was lower than the 5x book value suggested by BTG’s most recent financial statement. Much of the bank’s profits come from its trading business, one of the bankers says, which is an unreliable revenue stream. According to a Credit Suisse analyst report, the multiple represents a significant premium to comparables in the Brazilian financial market. Even Itau Unibanco, the mostly richly priced competitor in the banking sector, is only trading at 3.2x its most recently reported book value. “The capital increase, from this highly respected group of investors, will allow us to consolidate our position as a leading emerging-market based investment bank and asset manager,” says Andre Esteves, CEO and partner of BTG Pactual. The bank says the broad diversification of the investor base represents a first for Brazilian investment agreements. No existing shareholders sold their stakes in the bank, and several injected additional capital, according to the company. Management says the investment has no bearing on its decision regarding an eventual IPO. According to the bank, the capital increase will be used to fund BTG’s investment banking, wealth management and asset management businesses. Linklaters advised BTG Pactual.
Posted inDaily Brief
Colombia Issuance Director Departs
Patricia Moreno has left her position as deputy director for international capital markets at Colombia’s finance ministry, according to a ministry official. She has joined electricity generation company Emgesa after leaving the ministry in October. There is no official word on a replacement, with Miguel Angel Gomez said to be managing the position in the interim. Moreno had replaced Maria Catalina Escobar in the position, which coordinates the sovereign’s international bond offerings, in September of 2009. A Hacienda spokeswoman does not respond to request for comment on a replacement.
Posted inDaily Brief
Mexico Readies Debt Exchange
Mexico is preparing to swap several series of foreign debt for peso bonds, via the issue of warrants to be sold in a $1.5-$2.0bn transaction expected this week. With a structure used for similar exchanges in the past, holders buying the warrants have the right to exchange 18 series of old dollar, euro, sterling and lira bonds for peso bonds due 2020, 2029 and 2038, according to a banker on the deal. The exchange would occur in April and May. The deal will be preceded by roadshows today through Wednesday in Mexico, the US and London. Barclays and Credit Suisse are managing. In its last warrant operation in 2008, Mexico sold $1.25bn notional value of warrants for 21 series of old bonds.
Posted inDaily Brief
Alfa Commitments Roll In
Mexican conglomerate Alfa has received commitments from 6 banks for its $600m 3-year syndicated loan, according to bankers with knowledge of the transaction. Inbursa has already pledged $100m, the bankers say. The commitment deadline is December 7, with signing expected by 15 December. It is offering a spread of 300bp over Libor, linked to a leverage grid, on the deal to back the $600m purchase of Eastman Chemical assets in the US. Credit Suisse and HSBC are the leads. Alfa’s purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. For the M&A, BAML advised Eastman while HSBC worked on the buyside. Fitch downgraded Alfa subsidiary Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase.
Posted inDaily Brief
Colombia Boosts Ecopetrol Float Target
Colombia has proposed legislation that will allow it to float a 19.9% stake in state-controlled oil company Ecopetrol. The announcement by Colombia’s treasury department represents an increase over previously announced plans to float a 9.9% stake in the company early next year. The government plans to keep 70%, it says in a statement on the proposed legislation. Treasury minister Juan Carlos Echeverry says proceeds from the additional stake sale would provide funding for infrastructure investment, primarily in roads. The value of the already announced 9.9% stake sale will likely be around COP14bn-COP15bn, Echeverry says at a press conference.
Posted inDaily Brief
BTC Sells Majority Stake
Bahamas Telecommunications Company (BTC) has signed an MoU to sell a 51% stake to Cable & Wireless (C&W) for $210m. The UK-based telco will also obtain management control of the company. The deal will be financed with cash and existing debt facilities. In a conference call, C&W executives say they expect BTC’s 2010 Ebitda to be $90m-$100m. They also say they expect to cut operating costs by reducing inefficiencies. Privatization of BTC is part of the Bahamian government’s plan to reduce debt, which according to Moody’s analyst Gabriel Torres will represent 50%, of GDP or about $3.5bn, by the end of 2010. The Bahamas’ debt-to-GDP ratio was 33% in 2006. Citi has been advising the government on the sale of BTC for over a year. Previous reports had indicated the company could be valued at around 6x 2008 Ebitda, or $600m, though the deal with C&W has an implied enterprise value of only around $420m, or 4.15x Ebitda. A person familiar with the transaction denies that BTC had been looking for a significantly higher multiple, and says the seller spoke with several bidders, including Digicel, the Caribbean telecommunications provider. Mario Gutierrez, the Citi banker hired in July 2009 to lead the sale effort, had said several PE firms and strategic bidders had been interested in the company. An industry analyst had also said that Telefonica and America Movil were likely bidders. C&W did not retain outside financial advisors.