Polo Resources, a Canadian natural resources company, has an option to acquire 70% of the issued capital of MinFer Holdings, which owns the Minfer do Brazil Mineracao subsidiary. Minfer acquires and explores Brazilian iron ore projects. The option is exercisable within 90 days. If fully exercised, the option could be worth $20m.
Category: Regions
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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.
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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.
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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.
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Nicaragua Project Closes $160m Financing
RAM Power, a US renewable energy company, has closed $160m in debt financing, via IFC, which will go towards the second phase expansion of its San Jacinto-Tizate geothermal power project in Nicaragua. The borrower would not disclose the spread over Libor on the floating rate loan, but the company expects to swap it to a fixed-rate loan for 7%-8%. Initial drawdown is expected to occur in December 2010, with final maturity in 13 years and an 8.5-year average life for the senior debt. The $140m in senior construction and term loans and $20m in subordinated debt are available for general corporate purposes, in order to complete the second phase of this project. Combined with phase 1, it will provide 72MW of power to Nicaragua, to be completed by the end of 2011, according to Hezy Ram, CEO of Ram Power. IFC, IDB, CABEI, DEG, FMO, OeEB and Proparco were lenders on the transaction. Ram says that IFC all of the subordinated debt along with $30m in senior debt. IDB provided $30m in senior debt, with Proparco providing $20m, DEG $19m, FMO $19m, OeEB $15m and Cabei $7.6m. “We had well over $200m in demand for $140m of senior debt,” says Ram.
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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.
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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.
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Republic Seeks Bigger Barbados Stake
Continuing its Caribbean expansion, Republic Bank plans to buy the 35% stake it does not already own in Barbados National Bank. Trinidad & Tobago-based Republic aims to have the deal completed by the end of December, its general manager for treasury, Roopnarine Singh, tells LatinFinance. The stake is worth around $100m equivalent, he adds. Republic will fund the deal with cash on hand. The remaining stake is owned primarily by the government, along with some minority shareholders. Acquiring Barbados entirely is part of a plan to build region-wide, adding to existing operations in Guyana and Grenada. “Our strategy is that we will continue to grow throughout the Caribbean, especially in the English-speaking countries,” says Singh. He adds that Republic is not using an outside advisor on the deal.
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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.
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Mexico Best For Doing Business: WBank
Mexico is the best place in LatAm for companies, according to the World Bank’s Doing Business 2011 survey. Despite worsening drug-related crime, Mexico has moved up 6 places in the global ranking to 35 in the study, released last week. “The region’s top-ranked economy, Mexico launched an online one-stop shop for initiating business registration, improved construction permitting, and increased options for online payment of taxes,” says the multilateral. Twelve of 20 economies in LatAm have reformed business regulation to expand opportunity for local firms in the past year, according to the World Bank. Peru improved business regulation the most in the region, moving up 10 places in the global ranking on the overall ease of doing business, to 36th out of 183 economies. Peru was also among the world’s 10 most active economies, improving in 4 of 9 areas covered by the report. It created an online one-stop shop for business registration, improving the ease of business start-up more than any other economy. Peru also streamlined permits for construction, introduced fast-track procedures at the land registry, and eased trade with a new Web-based electronic data interchange system, the World Bank adds. “Economies in Latin America are improving regulation with faster, transparent, electronic systems,” says the multilateral. Chile moved up to 43 from 53 in the global ranking, while Grenada did best in the Caribbean, it adds. Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and closing a business. It does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.