Bondholders agreed to swap $549.9m (18.3%) of PDVSA’s 2011 bonds in an exchange offer that closed Friday, the state-owned Venezuelan oil company says. In return for the zero-coupon 2011 bonds, PDVSA will issue $618.7m in 8.0% of 2013s. It had offered $1,125 per $1,000 if done by October 28, and $1,095 per $1,000 if done after. There are now $2.45bn 2011 bonds outstanding, PDVSA says. Citi managed the process. PDVSA also sold $3.0bn in new 8.5% 2017s last month, and is heard looking to place another $1.0bn-$1.5bn of new bonds, according to Credit Suisse.
Category: Regions
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BESI Opens Mexico Office
Banco Espirito Santo and Espirito Santo Investment have opened an office in Mexico City. The bank says the new location will help strengthen clients’ access to Mexican opportunities. The office will also support business development in Central America and the Caribbean, focused on advisory, global trade finance, project finance, corporate finance and treasury and capital markets services. The office will be headed by Hugo Villalobos Velasco, who has worked in senior positions in the UK, Venezuela and Mexico.
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IIC to Increase Local Bond Issuance
The IIC seeks to increase its bond issuance in the local capital markets of Colombia, Mexico and Peru over the next 3 years, Steven Reed, deputy general manager of the IIC tells LatinFinance. He expects an increase in demand for local currency loans, which currently make up 15% of IIC’s lending portfolio, but grow to 25%-30% in the next 3 years. “Through doing local currency transactions we will be able to help finance a broader range SMEs that are not exporters,” says Reed. “The macroeconomic circumstances in the region and the increase in investment activity provide good opportunities to participate in those markets, and means we can help development,” he adds. Reed says that it is still difficult for many mid-market companies in the region to obtain bank financing. The IIC currently lends $400m and mobilizes an additional $400m in the region. It is looking to boost lending by 40%-50% in the next 3 years, says Reed.
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Inbursa Returns to MXP Market
Mexico’s Banco Inbursa, a subsidiary of financial group Inbursa, is looking to issue up to MXP5bn in 2-year bonds locally. The auction is expected to take place November 30. Inbursa and HSBC are joint leads on the transaction, which is rated AAA on a national scale. Investors expect pricing to be around 25bp over TIIE area. The funds will be used to improve the bank’s liquidity profile and expand its credit portfolio. This will be the bank’s third issue this year. In October, it sold MXP5.0bn in 3-year bonds which priced at TIIE plus 20.0bp on a book that was 1.7x oversubscribed, according to a banker at one of the leads. That transaction was through Inbursa and BBVA Bancomer and rated AAA on a national scale. Before that, Inbursa issued another MXP5bn 5-year bond at TIIE plus 24bp in August, its first since 1993. Other banks that have recently come to the market include Scotiabank and Compartamos, which both issued bonds in October. Scotiabank raised MXP2.67bn in Mexico, short of the MXP3.50bn it was aiming to issue and wide to expectations. The bank issued a AAA-rated, $2.3bn 5-year at TIIE plus 40bp and a MXP358m 7-year at TIIE plus 49bp. Compartamos, the microfinancing bank that lends only to women, issued a 2015 bond at 130bp over TIIE.
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Jamaica Slashes Rates
The Bank of Jamaica cut its monetary policy rate by 50bp to 7.50% in response to lower inflation. JPMorgan expects annual inflation to moderate from 13.2% in September to 10.0% by year-end due to still weak domestic demand and a stable Jamaican dollar. It also says double-digit inflation and upside risks stemming from the recent surge in global food prices will limit the central bank’s ability to cut interest rates further. Including Friday’s rate cut, the central bank has cut rates by a total of 300bp since February.
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ISA Considers Partner for Cintra
Colombian infrastructure company ISA will consider bringing in a partner to buy the 40% stake in Cintra Chile it does not already own, says a company spokeswoman. She adds that the search for a potential partner has not begun, as ISA’s option to buy the stake in the highway operator does not take effect until 2012. The company has not yet begun to consider financing options. ISA completed the acquisition of a 60% stake in Cintra for about $300m from Spain’s Grupo Ferrovial in September. Part of the acquisition will be financed with a $150m loan from BBVA and proceeds from a 2009 ISA share issue.
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Panama Meets Samurai Investors
Panama is set to meet the Japanese buyside this week, according to a finance ministry official, in advance of a January bond transaction. The sovereign has been planning to follow others from the region, such as Mexico and Colombia, in tapping the Samurai market, and seeks a $500m equivalent 10-year JBIC-guaranteed deal to be completed in January. Daiwa and Mitsubishi are managing the sale. The sovereign, with 3 out of 3 investment-grade ratings, would aim for a coupon under 2%, Diego Ferrer, head of institutional relations at Panama’s public credit office, told LatinFinance in September. Mexico has since issued JPY150bn 2020 with a 1.51% coupon.
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Chavez Plots State-Run Bolsa
Venezuela’s government plans to create a state-run stock and bond exchange, according to wire reports citing television remarks from president Hugo Chavez. The public market, which will begin operations in December, would allow state-run companies to sell securities with investments being guaranteed by the state, Chavez reportedly says. Earlier this year, the government closed more than a dozen banks and 40 brokerages that it said committed fraud and set artificial exchange rates. Separately, a new bond issue from PDVSA could be in the works, according to Credit Suisse. “We heard continuous discussion of the possibility of another $1.0bn-$1.5bn of new PDVSA bonds placed with the central bank,” it says.
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Moody’s Upgrades KCSM
Moody’s has upgraded railway company Kansas City Mexico (KCSM) to B1 from B2. The rating was raised in recognition of dramatically improved operating results realized in 2010 at both the parent and subsidiary level, and expectations that both entities will continue to exhibit robust financial performance over the next few years as demand will continue to grow in most freight groups at the railroads in a robust pricing environment. The outlook is positive.
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MDU Sells Transmission Lines for $70m
MDU Resources has sold its interest in 3 electrical transmission lines in Brazil to 2 buyers for $70m. The US-based energy and transportation infrastructure company says the buyers, Brazil power companies Cemig and Celesc purchased 84.4% of its interest in the lines, while a third, Alupar, will acquire the rest over the next 4 years. The acquirers are existing partners in the transmission lines.