IMG Worldwide, a US-based sports, entertainment and media business, and EBX Group will form a 50/50 JV to pursue sports and entertainment opportunities in Brazil. The new company, to be called IMGX, will consider a broad range of investments. They may include golf and tennis tournaments, volleyball and surfing leagues, stadiums, and sports marketing businesses geared toward the upcoming World Cup and Olympic games, according to an IMG spokesman. Eike Batista, founder and chairman of EBX, a Brazilian infrastructure and natural resource developer, is also investing in the Rio marina, and IMGX may seek to leverage developments there with additional sports and entertainment investments. No advisors were retained on the deal, and IMG did not respond to questions regarding capitalization plans for the new company.
Category: Regions
InBev BRL Debut Fizzes
Anheuser-Busch InBev, which holds the LatAm assets of AmBev, has sold BRL750m in global real-denominated bonds. The international brewer’s Baa2/BBB+ 2015 bond priced at par with a 9.750% coupon to yield at the tight end of 9.875% area guidance, revised from initial 10.000%-10.125%. Demand topped BRL2bn, bankers on the deal say, including EM-focused and high-grade investors with a wide geographic distribution. Barclays, Deutsche and Itau managed the deal. It follows a Brazil sovereign BRL1bn 2028 retap and a BRL575m 2020 issuance by Morgan Stanley, both done last month to fuel surging investor demand for local currency exposure. Bankers, already pitching sovereigns and LatAm corporates with global local currency structures, expect more issuer candidates to emerge among global companies with sizeable LatAm assets.
Votorantim Looks to Swiss Market
Banco Votorantim plans to become the first Brazilian issuer in Swiss francs in more than 10 years, with a CHF200m bond set to price as soon as tomorrow, according to bankers on it. The Brazilian bank is looking at a 3-year bond, with price talk indicating a 2.75% yield. Deutsche Bank is managing the sale. The last CHF issuance for a Brazilian entity was BNDES, with a CHF150m sale in 1997, according to Dealogic. It does not show any previous public market CHF issuance from a Brazilian corporate issuer.
Bimbo Consumes Sara Lee US
Grupo Bimbo will acquire the US bakery assets of Sara Lee for $959m. The deal price is less than the $1.1bn-$1.5bn bankers and analysts had forecast for the unit. However, it does not include Sara Lee’s Spanish or Australian assets, which several analysts had thought would be particularly attractive to Bimbo. Sara Lee owns the Bimbo brand in Spain, for example, which the original Bimbo founding family had sold years earlier and was eventually acquired by Sara Lee. The deal value implies an 8.9x Ebitda multiple on LTM adjusted Ebitda of $108m, above the 7x-8x Ebitda multiple that had been expected, according to analyst reports. Bimbo says it has identified $150m-$200m in potential synergies through operational overlap, which would bring the synergized multiple down to 3.7x EBITDA. Sara Lee refers questions to Bimbo, which does not return calls for comment. BAML is advising Sara Lee, with Bimbo retaining Atlas Advisors. The bank market is getting ready for an associated financing, which would have to launch soon to get done this year. The late 2008 acquisition of Weston Foods’ Eastern US distribution assets by Bimbo included a dual tranche, dual currency $1.7 billion syndicated loan via Bank of America, BBVA, Citi, ING, HSBC and Santander.
GBM Seeks MXP Bond Issue
Grupo Bursatil Mexicano, the Mexico-based brokerage company, is looking to issue MXP300m in 3-year bonds at the beginning of December, according to a regulatory filing. The bonds will pay a spread over TIIE and are awaiting a national scale rating. The use of proceeds from the self-led deal will be used to pay back outstanding debt.
Infonacot to Place Local Bond
Mexico’s Infonacot is doing a roadshow next week for up to MXP3bn 3-year bonds, which it is looking to issue at the end of November, according to lead bankers. Scotia and Bancomer are joint bookrunners on the deal. The proposed bonds are rated AAA on a national scale, and is expected to pay a spread over TIIE of 50bp-60bp, according to investors. The state-backed lender plans to use proceeds to increase its lending portfolio. The issuer last came to the market in April with MXP1.95bn 3-year bonds which paid TIIE plus 40bp.
Peru to Get IDB Loan
The IDB has approved a $110m loan to Peru to reduce poverty by strengthening its principal social protection and labor programs. The loan comes from IDB’s ordinary capital and has an amortization period of 20 years with a 5-year grace period and an interest rate based on Libor.
Alfa Offers Spread on Acquisition Loan
Mexican conglomerate Alfa 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 $600m 3-year bullet facility is expected to be syndicated. Invites have been sent out but meetings have not been fixed, according to people close to the transaction. Meetings are expected first in Mexico City, followed by New York. 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.
Fitch downgrades Posadas to B
Fitch has downgraded Mexico’s Grupo Posadas’ local currency and foreign currency IDR to B from B+ and national scale rating to BB+ from BBB+, with a stable outlook. The ratings action reflects continued deterioration on operating performance and financial indicators due to higher indebtedness, operating trends that have not improved as anticipated and the sale of Nuevo Grupo Aeronautico (NGA), including the airline carrier Mexicana, says Fitch. These factors have resulted in the company’s inability to gradually reduce leverage, adds the ratings agency. “Posadas’ ratings are supported by the company’s solid business position, strong brand name and multiple hotel formats,” says Fitch in a release. “Conversely, the ratings are tempered by increased leverage, exposure to currency fluctuation which can pressure liquidity and industry cyclicality,” it adds. Posadas has experienced weak operating results, which Fitch says is a result of lower vacation club revenues, and lower revenue per available room in its coastal hotels in part due to the perception of violence in Mexico and stabilization of urban destinations. This has not been able to compensate increased indebtedness and extraordinary charges due to the sale of NGA. The ratings also take into consideration the industry’s high correlation to economic cycles, which negatively affects operating indicators in downturns. Fitch adds that the company’s liquidity position is manageable and Posadas’ cash levels, excluding cash needed for operations, and credit facilities allow it to cover margin calls.
Interacciones Asks Investors on Tenor, Price
Mexico’s Banco Interacciones is planning to ask the market to set both the tenor and price on an MXP1.5bn bond issue that should happen by early December, CEO Gerardo Salazar tells LatinFinance. The issuer is seeking a 13-36 month tenor, with pricing between TIIE flat and 85bp over TIIE, he adds. “It is going to be assigned depending on the demand,” says Salazar. “Tenor is more important,” he adds. It is targeting institutional and high net worth Mexican investors with the deal, from a senior debt program of up to MXP10bn. At the same time, Interacciones will sell MXP630m in 10-year subordinated debt at a minimum of 175bp over TIIE. Salazar says the deals will be issued no later than 4 weeks from November 8. HSBC is sole lead on the 2 deals, rated A1 (Moody’s) and A (Fitch), which were recently approved by the CNV. The issuer has meanwhile opted to wait until early 2011 to issue a covered bond. It is looking for Nafin to guarantee 10.00% of the issue to ensure a AAA rating on the 22.8-year final, 8.0-year average life, deal. An MXP3.5bn debut covered issue had been expected. It has a AA rating with current collateral. The issuer is planning a non-deal roadshow for the covered bond this year, targeting Afores. Salazar says possible leads on the transaction include Citi, BBVA and HSBC. Interacciones specializes in sub-national and public infrastructure financing in Mexico. It is also looking to issue $2bn equivalent of covered bonds in local and international markets, and $280m of subordinated debt in the next 4 years, according to Salazar. Proceeds will be invested in infrastructure projects.