Colombian power company Isagen says it plans to issue COP400bn ($219m) in local bonds to finance development of the Hidrosogamoso hydroelectric project. Hidrosogamoso will generate 820MW and increase Isagen’s capacity by 43%. Terms of the deal and leading banks have not been disclosed and company officials could not be reached for comment. In September 2009, Isagen sold COP450bn in inflation-linked bonds in a debut placement on the domestic market to raise proceeds for Hidrosogamoso, which is expected to require an investment of $1.4bn.
Category: Regions
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Interacciones Targets MXP 3-Year
Banco Interacciones is looking to issue up to MXP1.5bn in 3 year bonds by December, CEO Gerardo Salazar tells LatinFinance. Bookrunners have not been mandated and no guidance provided. The bank is only doing a Mexico roadshow, but will look to go international for next year’s bond issues, adds Salazar. The notes are rated Ba1/A1.mx by Moody’s, and will be issued under a senior debt program of up to MXP10bn. Grupo 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.
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Petrominerales Acquires 25% Stake in Peru Block
Oil company Petrominerales has acquired an additional 25% stake in Block 126 in east central Peru from Veraz Petroleum, increasing its stake to 80%, according to a spokesman. Petrominerales will pay Veraz $6.8m in cash and an $8.0m bonus when certain production levels are achieved. In addition, it will grant Veraz a 20% working interest in Blocks 161 and 141. Both Petrominerales and Veraz are Canada-based companies with operations in LatAm.
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Bank of Tokyo Names LatAm CIB Head
The Bank of Tokyo-Mitsubishi UFJ has named David M. Gruppo head of LatAm corporate and investment banking, a newly created position. He will report to Randall Chafetz, head of corporate and IB for the Americas. Gruppo has held LatAm corporate and investment banking positions at Goldman Sachs, Morgan Stanley and Santander. Most recently, he has been in various capacities with IBM, including its TJ Watson Research unit.
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Alfa Seeks Loan For Eastman Purchase
DAK Americas, a unit of Mexican conglomerate Alfa, is acquiring Eastman Chemical’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment for $600m. Enrique Flores, director of corporate communications at Alfa, says the company is in talks to obtain a 3-year bullet credit facility to finance the acquisition. Terms have not been set and Flores declines to disclose which banks Alfa is talking to, saying only that the loan is likely to be syndicated due to the size of the transaction. The deal includes 3 petrochemical plants in South Carolina. Alfa estimates that the business generated revenue of $405m in H1 2010. Carlos Peyrelongue, equity analyst at Bank of America Merrill Lynch (BAML), says that the price is fair and potential synergies could make the deal non-dilutive. Martin Gonzalez, equity analyst at Mexico-based Invex, says the acquisition will strengthen Alfa’s polyester business while expanding its presence in North America. The deal is expected to close by year-end. BAML advised Eastman. Flores declines to say what financial advisors Alfa worked with.
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Fitch Studies FertiNitro Nationalization Impact
FertiNitro Finance’s nationalization by the Venezuelan government does not trigger an immediate acceleration of debt, Fitch says. The agency, which has a CCC (negative) rating on the company’s $250m 2020 bonds, says the company has always honored debt obligations, but that after the nationalization, the status of debt obligations is unclear. FertiNitro says that Pequiven, the state-owned company of which it is now a subsidiary, intends to support its debt obligations, but Fitch says details of such support are unclear. The agency does say, however, that the government of Venezuela has not prevented payment of debt obligations of strategically important nationalized companies.
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China SWF Mulls LatAm PE Investment
Sovereign wealth fund China Investment Corporation (CIC) wants to boost exposure to LatAm, potentially via private equity. “For us Latin America is a very important region for investment,” says CIC president and CIO Gao Xiqing. He adds that CIC wants to “increase the LatAm proportion of our portfolio to match the economic contribution of LatAm to the global economy.” Noting the relative underdevelopment of LatAm public markets, Gao says that in order to achieve this increase in exposure, CIC was “looking at private equity and other direct investment opportunities.” According to Gao, LatAm represented 6.9% of CIC’s total public market investment last year. He was speaking last week at the China-LAC Business Summit, held in Chengdu, China. CIC has some $300bn in assets. At the same event, China Eximbank and the IDB signed a letter of intent to boost trade between China and LatAm/Caribbean. “We believe the partnership between China Eximbank and IDB to be a groundbreaking initiative to support increased trade activity,” says IDB president Luis Alberto Moreno.
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Credicorp Buys Alico’s Pacifico Stakes
Peruvian financial conglomerate Credicorp says it is acquiring a 20.1% stake in Pacifico Seguros and a 38.0% stake in Pacifico Vida from US-based American Life Insurance Co. (Alico) for $170m in cash. Alico is owned by AIG through a SPV, though the parent is in the process of selling the company to MetLife. The acquisition of the Pacifico shares brings Credicorp’s stakes in Pacifico Seguros to 96% and to 100% in Pacifico Vida. “These are acquisitions that we have been planning ever since AIG ran into trouble,” says a Credicorp spokeswoman. AIG, which had to be bailed out by the US government in 2008, is expected to complete the sale of Alico in the next few months, according to company information. Credicorp’s spokeswoman says the company will finance the acquisition with cash on hand. “We had set aside funds so we could be able to finance the deal once we were able to execute it,” she says, adding that the deal was negotiated privately.
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Trafigura Sells Volcan Preferred Shares
Global commodities trader Trafigura has sold about a 25% stake of the preferred shares of Peruvian zinc and silver miner Volcan Compania Minera for around $400m equivalent, say bankers in Peru not involved in the deal. The shares were sold in several blocks via the local exchange and the buyers are local institutional investors, says one of the bankers. He adds that Trafigura acquired the stake in 2006 and sold it because Volcan is not part of its core business. Another banker says that BBVA Continental and Scotia handled the transactions.
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Genomma Lab Buying More Brands
Mexico-based drug and personal hygiene company Genomma Lab says it is acquiring 5 more brands for about MXP1.0bn ($85m). The company says it will use cash and long-term financing to cover the deal, adding that it is currently in negotiations with banks whose names it does not disclose. The brands, which together had sales of MXP514.1m in 2009, are shampoo and conditioner Vanart, Galaflex and Sante, hair dye Affair and skin cream Pomada de la Campana. Acquisitive Genomma has purchased 14 brands in the past 16 months. A company shareholder who was involved in the transaction says the deal was privately negotiated. The identity of the vendor was not disclosed.