AES Dominicana is preparing to issue what would be the first cross-border bond from a Dominican corporate in more than 3 years. The subsidiary of US-based power company AES is planning 10-year NC5 notes. It will meet investors in London, New York, Boston and Los Angeles from Tuesday through Thursday. The last Dominican corporate cross-border issue was a $175m 10-year from Empresa Generadora de Electricidad Haina in April 2007, according to Dealogic. The issuer is refinancing more expensive debt and has launched a tender for any and all of the $156m in outstanding AES Dominicana 11.000% 2015 bonds and $102m outstanding of 10.875% 2013 bonds issued by its Itabo unit. It is offering holders $1,031.25 per $1,000.00 for the AES bonds and $1,030.50 per $1,000.00 for the Itabo bonds, plus a $30 premium on each if tendered prior to the November 10 early deadline. The offer expires November 26. Credit Suisse and Deutsche Bank are managing both the new bond sale and the tender offer.
Category: Regions
Colombia Rates Seen Steady
The market expects Colombia’s central bank to keep its monetary policy rate on hold at 3.00% today. Morgan Stanley says growth is in line with expectations and inflation remains below target. It expects the rate to tighten to 6.00% by the end of 2011. Barclays also sees the rate on hold with tightening beginning in April, although it says there is a risk it could begin later in the year.
Helm Bank Issues Bonds
Colombia’s Helm Bank has issued COP400bn ($218m) in local bonds. The AA+ issue was done in 4 tranches, all priced at par. A 3-year COP97.9bn piece pays IBR plus 1.64% to yield 4.75%, a 3-year COP118.2bn piece pays IPC plus 3.00% to yield 5.35%, a 5-year COP67.2bn piece pays IPC plus 3.50% to yield 5.86% and a 7-year COP117.5bn piece pays IPC plus 4.12% to yield 6.49%. Proceeds will be used for working capital. Helm’s own brokerage managed the sale.
LAN Buys Colombia Airline
Chilean airline LAN says it is acquiring a 99% stake in Colombian peer Aires for $32.5m. Analysts believe the buyer will be assuming Aires’ debt, since the acquisition price seems low. LAN says the price will be adjusted according to variations in Aires’ debt between the value at closing of the transaction and the value as stated in the company’s financial statements as of August 31. “This is a very good price for a company that has a 22% market share,” says Cristina Acle, a Chile-based equities analyst with Corp Group. Felipe Mercado, an equity analyst with Banchile agrees. “Colombia, with 10m passengers a year, has double the volume of other LAN markets such as Chile and Peru,” says Mercado. Both analysts believe it is probable that LAN will pay for Aires with cash on hand. LAN reported Q3 profit of $106m. Aires, founded in 1980, is the second largest domestic airline in Colombia. It provides service to 27 domestic destinations and 3 international destinations, and has a fleet of 24 airplanes. Analysts were unable to determine the enterprise value or debt load of the privately held company. LAN officials decline to say if there were any financial advisors involved.
Venezuela, DR Snag IDB Loans
The IDB has approved a $700m loan to finance the modernization of the turbines of Venezuela’s Guri hydroelectric project, increasing power by 795MW. Venezuela will contribute a total of $609m in counterpart funds to the project, which will have a total cost around $1.3bn. The IDB loan is for 20 years, with a 6-year grace period and an interest rate based on Libor. Separately, the IDB has approved a $120m loan to the Dominican Republic to help enhance competitiveness. The IDB financing consists of a $110m loan with an amortization of 20 years, a grace period of 5 years and an interest rate based on Libor. The other $10m loan has an amortization of 15 years, a grace period of 5 years and an interest rate based on Libor. The multilateral does not comment on the loan spreads.
BTG Diversifies Into Mexico Research
BTG Pactual has hired Julio Zamora to run a fledgling Mexico equity research and strategy effort. Zamora was previously MD at Cadogan Management and worked in several buyside and sellside roles before that. He is expected to hire another research analyst and possibly support staff for sales and trading. Zamora will be based in New York and reports to Brazil-based research co-heads Rodrigo Goes and Gustavo Gattass. BTG has established itself as a major Brazil equity player and is now looking to build elsewhere in the region. It wants to establish a local presence in Colombia and Peru by early 2011, and Chile and Argentina are other possibilities for expansion, say senior bankers at the firm. BTG recently hired Rafael Shin to support Alonso Aramburu’s Andean and Southern Cone research coverage.
Jones Day Opening in Sao Paulo
Global law firm Jones Day is opening an office in Sao Paulo, from which it will handle all LatAm-related business. It already has an office in Mexico City. Luis Riesgo, chair of the LatAm practice, will move to Sao Paulo to serve as partner-in-charge of the new office. Riesgo served as partner-in-charge of the Madrid office of Jones Day for the last 5 years.
Sare Builds Follow-on
Sare Holding has priced a MXP930m equity follow on at a 1.6% discount to Wednesday’s MXP3.10 close. The Mexican homebuilder sold 305m shares at MXP3.05 each. Demand topped MXP3bn, according to a banker on the sale, including about MXP1bn from private banking, MXP900m from international institutional investors, and MXP500m from the local institutional buyside. Sare plans to use proceeds to increase production and boost efficiency following a debt restructuring, using proceeds to provide working capital for completing projects. BBVA and Santander managed the transaction. It is the sixth equity offering from Mexico this year. The market now turns its attention to the expected MXP15bn IPO of OHL Concesiones Mexico, set to price November 10.
Digicel Taps CEO for Honduras
Jamaica-based cell phone company Digicel says it has appointed Damian Blackburn as CEO of its Honduras operations. Blackburn, who had previously been regional CEO overseeing 12 Caribbean markets, joined Digicel 2.5 years ago. He replaces Ghada Gebara, who left the company after 5 years to pursue private projects.
Dow Jones Launches Peru Indices
Dow Jones Indexes has launched the LATixx Peru Government PES Bond and the LATixx Global Peru Government USD Bond Indexes. The market-cap weighted indexes are designed to measure the performance of the Peruvian government’s local and global issues in PES and USD. Back-tested historical data is available from January 1 2009, with the base date of December 31 2008 and an initial value set to 1,000, Dow Jones says. As of September 30, the LATixx Peru Government PES Bond Index had a year-to-date performance of 3.49%. The LATixx Global Peru Government USD Bond Index rose 16.62% over the same period.