Mexico’s Pemex has received a $75m ticket from EDC for the first tranche of its $3.25bn dual-tranche loan, according to bankers with knowledge of the deal. The first tranche is a $1.25bn 3-year revolver, to re-finance a loan that matured in September, for which it is offering 125bp over Libor. Bookrunners are Barclays, BBVA, Credit Agricole (admin agent) and RBS. It also wants a new money 5-year term loan for $2bn at L+150bp. BBVA (admin agent), BNP Paribas, Credit Agricole, Citi, HSBC and Inbursa are bookrunners. The revolver is to refinance a loan taken in 2007 for $1.25bn that was priced at Libor plus 20bp. Fees for participation in the revolver range from 25bp-60bp for $100m, $75m, $50m and $35m tickets. On the term loan, fees range from 45bp to 85bp for $150m, $100m, $75m and $50m commitments. Bankers say that of the 2 tranches the term loan looks more attractive. The deadline for commitments is October 13.
Category: Regions
Televisa Bags Univision Bargain
Televisa is investing $1.2bn in Univision, the US Spanish language broadcaster, in a deal that implies an equity valuation for the company of around $2.3bn, according to Enrique Senior, MD at Allen & Co, which advised Televisa. The market rewarded the move, sending the stock up 13.75% yesterday. The deal values the equity significantly less than 4 years ago, when Univision was acquired by a consortium of investors for $12.3bn in a deal that valued the company’s equity at around $4bn, according to Senior. “No one feels good about selling below cost,” Senior tells LatinFinance. “But valuations change.” In addition to a secular decline in media valuations since the last Univision deal, the broadcaster has, alongside its competitors, seen advertising revenues plateau. “It’s a great deal for Televisa and you can see that in the stock,” says a senior Mexico-based banker not on the transaction. Televisa, whose $12bn bid failed to attract Univision’s attention in 2006, now gets 5% of Univision in exchange for cash and a 50% stake in a JV valued at a combined $130m. Televisa will also buy convertible debt worth an additional 30%, and an option to acquire a further 5% stake in the future, though terms of the debt investment are not disclosed. The deal could result in Televisa owning 40% of Univision by 2025. As part of the agreement, Univision is increasing royalty payments for Televisa programming, from an existing 9.36% of television revenue, excluding certain major soccer events, to 11.91% of substantially all of Univision’s audiovisual and interactive revenues through December 2017, at which time royalty payments to Televisa will increase further to 16.22%. Additionally, Televisa will receive an incremental 2% in royalty payments on any Univision audiovisual revenues above the 2009 revenue base of $1.6 billion. “Assuming applicable Univision revenue of $2.7bn in 2017, we believe that Televisa would receive approximately $450mn in royalties from the new arrangement in 2017
Panama Aims for Sub 2% Samurai
Panama is hoping low global rates – especially in Japan – mean a Samurai issuance next year price through recent sovereign deals done with a JBIC guarantee. “The economic future of Panama is very much tied to Asia, and we want Asian investors to know Panama and be comfortable taking Panamanian risk,” Diego Ferrer, head of institutional relations at Panama’s public credit office, tells LatinFinance. The JBIC-wrapped deal should be $500m equivalent at 10 years and be completed by the end of January, he explains, to meet a debt maturity in February. The sovereign, with 3 out of 3 investment-grade ratings as of June, is aiming for a coupon under 2%, Ferrer says, which would be lower than Mexico, Colombia and the other issuers tapping that market in the past year under the JBIC program, which offers a 95% guarantee. After swapping to dollars, it would come in line with Panama’s curve, he says. The issuer is in the process of selecting banks for the transaction and should be helped by low interest rates, an increase in Japanese appetite for EM credit and Panama’s scarcity value, Ferrer says. Mexico was the last sovereign to hit the Samurai market, raising JPY150bn ($1.7bn) in 2019s at 2.22% coupon in December 2009. It has plans to tap again before the end of the year.
Su Casita Dangles Longer Debt, Equity
Hipotecaria Su Casita has presented a restructuring plan to holders of its MXP8.74bn in debt, offering longer-dated new debt and equity. The troubled Mexican mortgage lender will offer holders of its MXP1.985bn in short-term (less than 12 months) local debt cash worth MXP1.30bn (65%) of the debt, new 3-year debt worth MXP99.2m and an equity position with MXP1bn book value, or 0.02% of total capital. Meanwhile, holders of long-term (1-year+) dollar and peso debt, which totals MXP6.75bn, are offered MXP1.50bn in new 5-year debt paying TIIE plus 250bp, MXP551m in 3-year debt, MXP500m in 10-year subordinated debt paying a 3% coupon that steps up to 8% and is worth 10% of the company in the event of conversion. It also offers an equity stake worth 19.98% of the company. The deal represents recovery value of 70% in the case of short-term debt, and 51% for long-term debt holders, Su Casita says. Su Casita, 40% owned by Spain’s Caja Madrid, has been seeking alternatives since a deal to sell to BBVA Bancomer fell through in September. Rothschild is advising on the restructuring process, according to a company official.
Homebuilder Plots Follow On
Mexico’s Sare Holding wants to raise up to MXP805m through a primary equity offering, according to a prospectus. The homebuilder says it will float the idea to shareholders October 20. BBVA and Santander have been hired to manage the transaction, for which no timetable has been set. Sare aims to increase production and improve efficiency following a debt restructuring. “Fresh resources will allow for a quick turnover of inventory near completion as well as advancement on land ready to be developed, leading to incremental production cycles and higher reported sales, thereby ultimately driving shareholder returns,” it says. Sare is also proposing to convert its stock into a single class. Sare shares closed Monday at MXP2.79.
Canadian Miner Eyes Colombia Listing
Gran Colombia Gold, a Canadian company with mining operations in Colombia, is working on listing shares on Colombia’s stock exchange, the BVC, says general counsel Peter Volk. He explains that this would not entail issuing new shares, but rather listing shares already traded in Toronto (TSX). “We are still in a very early stage. We expect the process to take 3-4 months,” Volk says. He explains that the idea is to gain exposure to a new investor base. Citi is advising. Gran Colombia, whose shares on the TSX trade under the symbol GCM, has a market cap of CAD253m.
Inbursa to Issue MXP5bn
Banco Inbursa is set to auction up to MXP5bn 3 year bonds on 13 October, according to a regulatory filing. The transaction is self-led, joint with BBVA Bancomer and is rated AAA on a national scale. The bonds will pay a spread over TIIE. The deal follows on from the bank’s August bond issue, which was its first bond issue since it was set up in 1993. The bank issued MXN5bn in 5-year paper, which paid a spread of TIIE plus 24bp.
Ecopetrol Wants Pesos in Debt Mix
Colombia’s Ecopetrol plans to make use of the country’s domestic debt markets in the immediate future. “We have a lower cost of indebtedness in US dollars, but given our revenue structure, it is important to have funding in pesos and in dollars,” says CFO Adriana Echeverri. The oil producer plans to raise up to COP1trn ($500m) in local markets. Echeverri says rates are low in Colombia, like in the US, consistent with the general global trend. The company is still choosing banks for the deal, she says, and will hire them once regulators have approved a transaction. She declines comment on possible maturities. The company will also seek peso financing for a portion of the $4.2bn Oleoducto Bicentenario pipeline project. Ecopetrol is choosing a partner from among 14 interested parties – including Pacific Rubiales and Petrominerales –and should decide by the end of the month. The joint venture will seek a certain portion of funding in debt markets, Echeverri says. New shares for the public are still in the cards, as Ecopetrol can sell another 9.9% to bring the float to 20%. “The transaction depends on the rhythm of our investments – it could be next year, or 2012,” says CEO Javier Gutierrez. Gutierrez declines to comment on the possibility of a return to the dollar bond markets, following 2009’s successful $1.5bn debut. Echeverri and Gutierrez spoke to reporters in New York Monday.
IXE Sale Seen Unlikely Below 2x Book
Mexico’s IXE Grupo Financiero is unlikely to sell itself for less than 2x book value, according to a Mexico City based investment banker familiar with IXE’s strategic thinking. “A deal would get done at north of 2x book,” according to the banker. IXE trades around 1.62x book following news of a possible merger with Banorte. A second New York banker away from the deal says a multiple of 2x-3x book would be possible, noting that Banorte itself is trading at above 2x while Itau trades as high as 3x book. However, a US-based financial services analyst disagrees, citing operating losses over the past few years and difficulties with IXE’s micro-lending and credit card business as reasons it could go for as low as 1x book. The Mexico based banker says a combination of factors make IXE attractive to Banorte. As a bank that has been talked about as a potential target for several years, IXE could help Banorte bulk up enough to fend off a bid from a foreign buyer. Acquiring IXE would move Banorte from fourth to third largest Mexican bank by assets. Brazil’s Itau is among those looking to enter the lucrative Mexico market. IXE also has a retail operation that can give Banorte greater presence in DF and the southeast. Meanwhile the banker describes IXE’s broker-dealer operation as the most successful of the bank’s businesses, and another particularly attractive element to the acquisition. Other analysts mention IXE’s private banking division and high net worth clients as being attractive to Banorte. Last year, Banorte acquired IXE’s Afores portfolio with MXP57.18bn in assets. JPMorgan is rumored to be advising IXE, but declines comment. JPMorgan advised the bank on its bancassurance alliance with RSA Mexico earlier this year. Banorte and IXE do not return calls.
Nuevo Leon Infrastructure on Hold
Nuevo Leon has big infrastructure projects it needs to complete, though it needs MXP5bn to repair damage caused by Hurricane Alex before it can carry out the works, Ricardo Garza Villarreal, sub-secretary of Nuevo Leon tells LatinFinance. “We are asking for federal funds towards repairing damages from the hurricane, but would like them to contribute 80% not 50% that they offered of the total outstanding cost,” he says. Garza adds that Nuevo Leon contributes 7.90% of Mexico’s GDP, but only receives 4.75% of total federal funds. He cites this as one of the reasons the federal government should provide a higher level of support to repair damage. Garza adds that going forward the state is looking to finance public works through new schemes, such as PPPs and is seeking more support from Fonadin. The biggest outstanding project is the state’s water infrastructure, which Garza says needs a large amount of investment, “We need a long-term loan for this, from someone like the IDB, and we need it completed by 2015, otherwise we will have big problems with the water system,” he says. Garza adds that Nuevo Leon also needs funding for a new metro line. He does not disclose details of the estimated cost.