Vitro has pushed back the expiration date for a debt exchange offer to bondholders, to December 7 from December 1, it says. The Mexican glassmaker launched the offer November 1, with the hope of reducing its debt before entering into a Concurso Mercantil Mexican bankruptcy process. The Ad Hoc Group of Vitro Noteholders, which claims to represent holders of $650m in the Mexican glassmaker’s bonds and opposes the offer, claims to have engaged holders of another $100m in bonds who have agreed not to exchange, the group says in a statement. The group, which Vitro claims represents only $75m of its bonds, commenced last week involuntary Chapter 11 cases against the Mexican glassmaker’s US subsidiaries that are guarantors of its bond debt. Vitro’s $1.2bn restructuring deal offered cash and new securities to holders of its $300m in 8.625% of 2012 bonds, $216m in 11.750% of 2013s and $700m in 9.125% of 2017s. Vitro said at the time of launch that creditors could expect a 68%-73% recovery. Rothschild is Vitro’s financial advisor on the process.
Category: Regions
Banamex Expectations Tight, Investors Say
Banamex will come to the market with a MXP5bn 10-year bond Wednesday. The self-led deal is heard being whispered at 130bp over Mbonos, according to investors. One investor says the pricing is too tight. “Basel 3 regulations mean banks will have to hold a lot more capital reserves, so the market will be awash with bank paper, meaning it is not attractive to buy at these levels,” says one investor. The bonds are rated AAA on a national scale.
Occidente COP400bn Bond Expected Thursday
Colombia’s Banco de Occidente plans to issue COP400bn ($218m) in local bonds Thursday, according to 2 bankers away from the deal. This would be the first issue out of a COP1trn shelf, a banker says. Banco Occidente had not been expected to issue bonds from the shelf until 2011, in order to make sure there would be enough liquidity in the market following Ecopetrol’s upcoming COP1trn bond. However, Ecopetrol’s issue will be benchmarked to IPC, whereas 1 of Occidente’s tranches will be pegged to IBR. One of the bankers says the 2 types of issuance draw different types of investors, reducing worries of limited market liquidity, so Occidente now has no reason to wait. The AAA notes will be issued in 2 pieces, a 3-year piece indexed to IBR and a 5-year pegged to IPC. A lead bank has not been selected. In June, Colombia’s Banco Popular issued COP300bn in AAA rated local bonds which priced a 24-month piece at 2.90% over IPC, a 36-month piece at 3.23% over IPC, an 18-month tranche at 1.20% over IBR and an 18-month tranche at a fixed rate of 4.98%.
Bancolombia Gets Bond Shelf
The board of Bancolombia has authorized the bank to sell up to COP1trn ($530m) in bonds, the bank says. The program may be exercised through a single sale in the dollar markets, or through multiple sales in the local market, Bancolombia says, depending on market conditions and the bank’s needs. It can issue at maturities of up to 7 years. Proceeds would go to funding its banking operations. In July, Bancolombia made its first appearance in the USD markets since 2007, selling $620.00m in 6.125% 2020 Tier 2 bonds, getting a 6.341% yield, through BofA Merrill Lynch and JPMorgan.
EPM Eyes COP500bn Local Bond
Colombian utility Empresas Publicas de Medellin (EPM) is said to be studying a COP500bn ($185m-$264m) local bond issue likely to price on December 14 or 15. One banker on the deal says that the company, which is expected to do the issue in 3 tranches, could opt for tenors of 5, 10 and 15 years or 7, 15 and 20 years, with price expectations to be in line with Ecopetrol’s upcoming issue. No lead has been selected for the AAA rated bonds, but Ecopetrol has often acted as the lead on its bond issues through an in-house team. Correval, Interbolsa and Corredores Asociados are understood to be participating.
ISA Unit Nabs Transmission Project
Consorcio Transmantaro has been awarded the concession to design, build and operate a Peruvian power transmission line. According to Proinversion, the Peruvian entity responsible for infrastructure projects, the subsidiary of Colombian infrastructure company ISA and Empresa de Energia de Bogota will build the Machupicchu-Abancay-Cotaruse line for $62.5m. ISA officials declined to confirm the figure, saying only that they expect the 180 MW project to generate annual revenue of around $9.8m once operational. The contract for the line will last 30 years. Construction is expected to take 2 years, ISA says.
Alfa Gets Inbursa Loan Commitment
Mexican conglomerate Alfa has received a $100m commitment from Inbursa for its $600m 3-year syndicated loan, according to bankers with knowledge of the transaction. This follows on from bank meetings in New York on Tuesday and Mexico on Friday of last week. Credit Suisse and HSBC are managing the deal. It will close syndication on 7 December, and signing is expected by December 15, according to bankers with knowledge of the transaction. It is heard to be offering a spread of 300bp over Libor on a leveraged grid for its syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A banker away from the transaction described the spread as being attractive to the lender. The bank meeting on Tuesday in New York was well attended by banks from Europe and Asia, as well as from the US, according to a banker away from the deal. 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. 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.
Colombia Keeps Rate at 3.00%
Colombia’s central bank kept its rate unchanged at 3.00%, in line with market expectations. The bank based its decision on lower-than-expected inflation of 2.33% and a strengthening economy. It also says it expects GDP to grow about 4.50% in 2011. Morgan Stanley says the rate should stay at 3.00% for the rest of the year, but it expects it to tighten to 6.00% by the end of 2011. Local brokerage Corredores Asociados believes it is necessary to keep the rate at current levels to jumpstart economic activity amid low inflation.
Bondholders Move Against Vitro
A group of Vitro’s bondholders has commenced involuntary Chapter 11 cases against the Mexican glassmaker’s US subsidiaries that are guarantors of its bond debt, Vitro says. The glassmaker claims the group, calling itself the Ad Hoc Group of Vitro Noteholders, represents approximately $75m, or less than 5%, of the company’s dollar debt. The holders, however, say in a separate statement that their group now represents more than $635m (52%) of the $1.2bn debt, and that it opposes Vitro’s current restructuring plan. Vitro had launched the plan November 1, claiming it has the support of its largest creditor. The deal offered cash and new securities to holders of its $300m in 8.625% of 2012 bonds, $216m in 11.750% of 2013s and $700m in 9.125% of 2017s. The offer, expiring December 1, is intended as a step toward achieving a debt restructuring to be carried out under Mexico’s Concurso Mercantil process. Vitro said at the time of launch that creditors could expect a 68%-73% recovery. Rothschild is Vitro’s financial advisor on the process. Vitro says its operations are not affected by the bondholder group’s actions, and maintains its plan to pursue the exchange and the Concurso process. Barclays capital continues to see a heightened risk of litigation that could potentially add significant additional time to recovery, it says in a note. It recommends holders who intend to enter the exchange should consider selling instead, as current levels are roughly equivalent, in terms of time value of money, to participating in the proposed restructuring.
GBM Sets Local Bond Date
Grupo Bursatil Mexicano, the Mexico-based brokerage firm, will issue MXP300m in 3-year bonds on 3 December, according to the issuer. The bond is to replace outstanding debt, for the same amount, which matures at the beginning of December. The bonds will pay a spread over TIIE and have an AA rating on a national scale. Bursatil is managing the deal itself.