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.
Category: Regions
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KC Southern Advances Tender
Railroad operator Kansas City Southern de Mexico has received acceptance from holders of $139m of its outstanding 2013 bonds and $31.6m of its 2016s, it says, as of the November 16 early deadline of a tender offer. KCSM had offered holders of the $175m outstanding 7.625% 2013s $1,040.63 per $1,000.00 principal before the November 16 early deadline and $1,010.63 after. Holders of the $150m in outstanding 12.500% 2016s were to receive $1,240.00 per $1,000.00 principal prior to November 16, and $1,210.00 after. The offer expires December 1. 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.
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Alfa Commitments Due 7 December
Mexican conglomerate Alfa will close syndication for its $600m 3-year bullet facility on 7 December, and signing is expected by 15 December, 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 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. The bank meeting in Mexico will take place today. 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. 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. On a pro-forma basis, Fitch estimates that Petrotemex’s total debt-to-Ebitda, including 12 months of Eastman assets operations, could reach 3.3x in 2010 before gradually decreasing. This compares negatively with a total debt-to-Ebitda ratio of 2.2x for the 12 months to June 30, and falls outside Fitch’s prior leverage estimate of 2.0x-2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business as it gains PET market share in North America.
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Mexican Pipeline Refills
Ally Credit, Fonacot and Grupo Kuo are expect to issue in the Mexican domestic market next week. Ally Credit, the auto financing company, is expected to issue a MXP1bn 1.5 year bond on 23 November at a spread of TIIE plus 150bp via Ixe and Scotia, says a banker at 1 of the leads. The bonds are rated AAA on a national scale. The use of proceeds is for automotive loans. The following day Instituto del Fondo Nacional para el Consumo de los Trabajadores (Fonacot), will issue up to MXP2.5bn in 3 year bonds. Bancomer and Scotia are bookrunners. The guidance is 40-45bp over TIIE, according to a banker at 1 of the leads. The use of proceeds is o expand its consumer loans. The bonds are rated AAA on a national scale. Grupo KUO is looking to issue MXP700m of 5 year bonds in on 25 November. Guidance is heard at between 260bp and 270bp over TIIE. The bonds have a BBB + rating on a national scale, which 1 investor says is tight, given the company’s rating. IXE is the bookrunner on the deal. Proceeds will be used to refinance liabilities and for other corporate purposes. KUO has holdings in the consumer goods, chemical and automotive industries.
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Colombia Rates Seen Steady
Colombia’s central bank is widely expected to keep its monetary policy rate on hold at 3.00%. Morgan Stanley, for instance, says the bank will keep rates unchanged as inflation remains benign. It adds that the rate should stay at this level 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 around 3.00% at this level to jumpstart economic activity amidst low inflation.
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CFE Delays Bond Issue
CFE has delayed its MXP10bn 4-year floating and 10-year fixed rate bond until 1 December, according to a banker on the deal. Banamex, BBVA Bancomer and ING are bookrunners on the deal. The bonds are rated AAA on a national scale. The transaction had been planned for mid November, but the issuer decided to delay the offer to await a less crowded market, adds the banker. The transaction is the first in a new program. Investors still expect the Mexican electricity authority to price at 30bp over TIIE for the 4-year and 120bp-130bp over Mbonos for the fixed tranche. The use of proceeds is for general financing purposes. It is also issuing a MXP450m 2 years 8 months bond, in a re-opening of a previous bond issue, as part of previous shelf. The bond will be issued via Ixe and Banamex. The bonds are rated AAA on a national scale.
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Compartamos Holdco to List
Publicly listed Mexican micro lender Banco Compartamos plans to have its holding company, Compartamos SAB, list on the Mexican stock exchange. The move would simplify the bank’s corporate structure, which would consist of a single publicly listed company rather than a privately held holding company with a majority stake in a publicly listed operating company. The change in structure will be achieved through an exchange offer whereby shareholders in the operating company will receive 4 shares in the holding company for every share they own. In order for the offer to take effect, the holding company must receive at least 85% of the shares in the operating company. If more than 95% of the operating company’s shares are tendered, it will delist. The offer expires December 13. The bank’s management will not change, Compartamos says, adding that the deal will not result in any cash proceeds either for the bank or the holding company.
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Ixe And Banorte Make it Official
In a deal that has been expected since an initial stock exchange announcement last month, Banorte has reached an agreement to acquire Ixe for MXP16.2bn ($1.3bn). Previously, bankers had said Ixe would want at least 2x book value, or approximately MXP14bn as of September 30. Banorte was advised by Strategic Advisors and Estructura Partners, while Ixe was advised by JPMorgan, which is also a significant shareholder in the bank. JPMorgan was heard to be the initial instigator of the deal and champion for it throughout the process. Banorte says it is targeting synergies of 5%-6% of the combined earnings of the two companies within the first year. According to Ixe, the 2 financial groups have significant synergies, with the combined institution becoming the third largest in the country by either assets or deposits, and the only bank of its size controlled by Mexican shareholders. A combination of the 2 could help fend off an acquisition by a larger foreign competitor, according to a Mexico-based banker, while Ixe’s retail operation can give Banorte greater presence in DF and the southeast. However, the deal also gave rise to speculation that JPMorgan could eventually seek to acquire Banorte now that it will have a stake in the bank. S&P placed Ixe’s ratings on CreditWatch with positive implications. According to the ratings agency, Ixe could benefit from being part of a stronger, larger, and more diversified financial institution. Meanwhile, the deal provides Banorte with more geographic diversification and wider clientele, according to the agency.
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Karoon Gas IPO Due Today
Karoon Gas Australia plans to price the IPO of its Brazilian subsidiary today, a deal expected to raise more than BRL1bn. After a week’s postponement, Karoon, the owner of exploration blocks in Brazil and Peru, plans to sell 1.03m primary shares, representing a 31.90% stake, at a range of BRL1,025.00-BRL1,275.00 each. The deal would raise BRL1.18bn if priced at its BRL1,150 midpoint. A 15% greenshoe is also available. Karoon plans to use the proceeds to drill in 5 Peruvian and 7 Brazilian blocks. It claims to have a combined unrisked mean estimate of 2.15bn barrels of reserves for both countries. Morgan Stanley is lead coordinator of the deal, with BTG and Credit Suisse as bookrunners. It is the latest deal in a series of equity offerings from the Brazilian oil and gas sector. Shares of E&P debutant HRT have traded down 5.8% since its IPO and preferred shared of Petrobras are down 1.5% since its follow-on. “These represent long-term projects and investors enter with a long-term view – the short-term performance of these stocks is less important,” says a Sao Paulo-based asset manager. Queiroz Galvao will likely follow with an IPO of its oil assets in December.
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Cabei Lands Swiss Debut
Cabei has raised CHF150m through its first bond sale in Swiss francs. Cabei priced the 2013 bond at 100.440 with a 2.250% coupon to yield 2.235%, or mid-swaps plus 150bp, tight to 155bp guidance. “Given the current market conditions, this was a successful transaction,” Felix Magana, treasurer of Cabei tells LatinFinance. He adds that this is consistent with the bank’s long-term strategy to diversify and grow its investor base. Credit Suisse managed the transaction, rated A minus/A2. Cabei will seek to issue before the end of the year in a Central American market, he says, but has not decided on which yet. Last month it raised CRC11bn ($21.6m) in 7-year bonds in Costa Rica’s local market. Cabei plans to return to Asia in the early part of next year, Magana says, likely revisiting one or more of the markets it has issued in previously, which include Japan, Hong Kong, Taiwan, Thailand and Singapore. It has been a tricky week for Latin issuers, with banks including Banco BVA and Bradesco postponing deals. The market was still waiting for word as to whether Andean multilateral CAF would proceed with a euro-denominated transaction.