A group of Mexican property owners known as Grupo E is preparing Mexico’s first-ever real estate income trust. According to regulatory documents, the group plans to arrange a sale of the trust, known as a Fibra, early 2011. Regulators approved the asset class for sale in Mexico’s equity market earlier this year. The issuer does not indicate an expected size of the trust in its filing. The vehicle, known as Fibra Uno, consists of 12 industrial, commercial, office, and mixed use properties located throughout Mexico and totaling 484,000 square meters. They are owned by a group of 60-70 owners organized by Grupo E, which is led by the El-Mann family. Proceeds from the sale will be used to fund the acquisition of 5 additional commercial and mixed-use properties totaling 189,000 square meters. In accordance with Mexican regulations, the trust will distribute 95% of its income quarterly. The sale is set to begin marketing in January, aiming to close by the end of that month. Santander and Protego are managing the deal.
Category: Regions
CFE Signs $2bn Loan
CFE, Mexico’s federal electricity commission, Wednesday signed a $2.0bn 3.5-year term loan, with commitments from 12 banks, in addition to the bookrunners, according to a banker with knowledge of the transaction. BAML, BBVA, BNP Paribas, Bank of Tokyo, Citi, Intesa, RBS and Santander were bookrunners on the deal and each allocated $146.25m. Mizuho and Scotia took $120m and $100m tickets respectively, Bayern, SMBC and EDC took $85m each, Societe Generale and Deutsche committed $75m each, ING, JPMorgan and Goldman Sachs committed for $50m each, with Credit Agricole and DZ Bank committing $30m and $25m respectively. Funds will be allocated December 9. The spread is 130bp over Libor. The loan pre-funds a $1.7bn revolver maturing in May.
Nestle Advances Ecuador ABS
Nestle’s Ecuador unit has completed the sale of 2 out of 4 series of a $75m domestic bond sale. A $20m 3-year 7.25% coupon tranche priced at 101.56 to yield 6.25%, and a $15m 5-year 7.75% tranche priced at 101.22 to yield 7.25%, according to a Nestle finance official. A $35m 7-year piece with an 8.25% coupon, and a $4m 7-year subordinated slice paying 8.75%, are expected to close within the coming weeks, the official says. The deal is guaranteed by Nestle’s future sales in Ecuador and follows a $70m ABS in 2008. Produbanco is managing the trade, rated AAA on a national scale.
Digicel Adds To 2017 Bonds
Digicel has raised $300m in new 8.25% of 2017 bonds, reopening an issue originally sold last year. The Caribbean telecom reopened the B1 notes at 102.75 to yield 7.544%, in line with 102.50 area guidance. The bond had been trading around 104 prior to announcement, according to an investor. “Deal pricing represented a 56bp concession; thus, we were not surprised that the bonds performed well on the break,” says Barclays in a research note. Digicel chose to tap the markets at a time when many lower-rated issuers are seen waiting until 2011, given market turbulence. This has not stopped Digicel in the past, however, as it was one of the region’s first high-yield issuers in post-crisis 2009. Credit Suisse, Barclays, Citi, Deutsche Bank, and JPMorgan managed the sale, done through the Digicel Limited unit. Proceeds are marked for general corporate purposes. Digicel originally sold the notes in December 2009 at an 8.50% yield, to fund a buyback of more expensive 9.25% of 2012. The total issue size now stands at $800m.
Perusat, ZTE Enter Broadband Partnership
Perusat, the Peruvian subsidiary of telecom ChinaTel, has entered into a partnership with Hong Kong-listed peer ZTE. ZTE will provide Perusat infrastructure equipment, consumer terminals, and engineering and management services for the wireless broadband network Perusat is deploying in Peru. The value of the contract is expected to be around $48m over the next 7 years. ZTE is financing 85% of the cost of infrastructure equipment covered in the first phase of the partnership, expected to require around $7m. National banks in China with whom ZTE has relationships are expected to finance 85% of future phases. The first phase of deployment, in which Perunet expects to expand coverage to 7 cities, should be complete by May, it says.
BTG Stake Sale Imminent
BTG Pactual is likely to close a 15% stake sale to J. Christopher Flowers, Government of Singapore Investment Corp (GIC) and other investors relatively soon, according to a person familiar with the matter. However, others have expressed surprise at the price, $1.5bn, which has been reported in the press. But the person familiar with the matter describes valuation as among the more reasonable that had been suggested. Flowers and GIC have been reviewing an investment in the Brazilian bank for months. The fact that a deal has not been reached yet indicates a fundamental disconnect between the two sides, such as valuation of the stake, a banker away from the deal says. Stories regarding a potential sale of the stake to GIC have circulated since at least October, at which point reports had pegged the value of the stake at $2.4bn. Even at $1.5bn, which had been reported by wire services Tuesday, the deal would imply a valuation of more than 5x book, according to the banker, who says the bank’s current book value is still only around $1.7bn, about the same as when Andre Esteves reacquired the firm from UBS last year for $2.5bn. The banker says that the majority of Pactual’s profits come from its trading business, a fact of which Flowers is well aware. The financial investor is unlikely to pay such a high premium to book value for profits for a business that can fall at the drop of a hat, the banker says. BTG is also said to be insisting on direct negotiations with potential investors, refusing to open its books even to advisors that worked on its now defunct IPO.
CFE Prices Jumbo Dual Tranche
CFE issued MXP14bn in a dual-tranche, 4-year floating and 10-year fixed rate bond on Wednesday, after receiving MXP23bn of demand from investors, according to bankers on the deal. The 10-year tranche was for MXP9.0bn, after total orders reached MXP14.6bn. The bonds priced to yield 7.96%, or Mbonos plus 120bp, in line with guidance, according to the bankers. The 4-year was for MXP5.0bn, on MXP8.4bn in demand. The bonds were priced at 26bp over TIIE, tight to guidance of 30bp over TIIE. Investors include pension funds, treasuries, insurance companies and private banks. Banamex, BBVA Bancomer and ING were bookrunners. Proceeds will be used for general financing purposes. The bonds are rated AAA on a national scale.
Panama’s BNP Issues Local Debt
Banco Nacional de Panama (BNP) has launched a deal aiming to raise up to $75m in local market debt, it says. The bank is offering 3.50% of 2013, 3.75% of 2014 and 4.00% of 2015 bonds, all at 100% of face value, according to a prospectus. The sale period will close when the bonds have been sold, a spokeswoman says, and the bank could follow the current offer with additional series of 2-10 year tenors from a $300m shelf. BNP’s brokerage division is managing the sale, rated AA+ on a national scale.
Ecopetrol Bonds Price Tight
State-controlled Colombian oil giant Ecopetrol has issued COP1trn ($518m) in local bonds tight to guidance, according to a banker on the deal. Ecopetrol got demand for more than COP3trn, toward the low end of expectations. Bankers on the deal expected bids for 3x-4x times the amount offered. The AAA rated deal came in 4 tranches, all priced at par. A 5-year COP97.1bn piece pays 2.80% over IPC, a 7-year COP138.70bn 3.30% over IPC, a 10-year COP479.90bn 3.94% over IPC and a 30-year COP284.30bn piece pays 4.90% over IPC. A banker on the deal had previously estimated that the 5-year notes could price at IPC plus 3.0%-3.2%, the 7-year notes at around IPC plus 4.0%, the 10-year notes at around IPC plus 4.5% and the 30-year notes at IPC plus 5.0%. October IPC is 2.33%. A banker on the trade says local investors represented the majority of the book, with local pension funds and insurance companies opting for the 30-year notes. He notes some foreign interest, but is unable to specify the total purchased. The 30-year repriced Colombian public debt tighter, the banker adds. Other publicly controlled companies like power holding company Isagen and telecom UNE have outstanding bonds. Proceeds from the sale will go to finance the oil company’s capex plan, for which it has a budget of about $8.5bn. Correval and Valores Bancolombia led the sale.
Strong Demand Expected for Ecopetrol Bonds
Colombian oil giant Ecopetrol is set to issue COP800bn ($417m) in local bonds today with the possibility of going up to COP1trn depending on demand. Local bankers on and off the deal say demand will likely surpass COP1trn. One banker on the deal says demand could reach 3x-4x times the maximum amount as Ecopetrol is favored by investors seeking to benefit from the popularity of the energy sector in Colombia. The issue will have tenors of 5, 7, 10 and 30 years at various spreads over the IPC benchmark, according to bankers. One banker estimates that the 5-year notes could price at IPC plus 3.0%-3.2%, the 7 year notes at around IPC plus 4.0%, the 10-year notes at around IPC plus 4.5% and the 30-year notes at IPC plus 5.0%. Proceeds will go to finance the Colombian oil giant’s capex plan, for which it has a budget of about $8.5bn. Correval and Valores Bancolombia are leading the sale of the AAA rated bonds.