Colombian financial conglomerate Colpatria sold COP200bn ($108m) in 10-year subordinated bonds priced at par. The AA+ rated notes pay IPC plus 5.20% to yield 7.60%. Proceeds will be used for working capital. Colpatria led the sale itself.
Category: Regions
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Ecopetrol Local Gets OK
Colombian oil giant Ecopetrol has received authorization from the finance ministry to issue COP1trn ($543m) in local bonds. A company spokesman says that a date for the issue has not been set, but that it should happen by the end of the year. Proceeds will be used for capex. Correval and Valores Bancolombia will lead the sale, the spokesman says.
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Alfa Heard Bringing Acquisition Loan
Mexican conglomerate Alfa is understood to have mandated a 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 next month. Credit Suisse and HSBC are heard as the leads on the deal that hits a LatAm bank market starved for assets and hungry for yield. The 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 is understood to have worked on the buyside. Fitch Wednesday downgraded Alfa sub 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, considering 12 months of Eastman assets operations, could reach 3.3x in 2010 and gradually decrease. This compares negatively with a total debt-to- Ebitda ratio of 2.2x for the 12 months to June 30, and fall outside Fitch’s prior leverage estimation of 2.0x to 2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business position, as it gains PET market share in North America. “It should also bring potential synergies to Petrotemex’s operations, provide the company with access to new technologies and improve its vertical integration,” says Fitch.
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Analysts Like Bimbo/Sara Lee
A potential acquisition of Sara Lee’s bread business by Grupo Bimbo gets the approval of analysts, who say the deal would be non-dilutive to Sara Lee, while Bimbo would likely be able to improve the unit’s margins. Deutsche Bank runs potential Ebitda multiples for the acquisition under a variety of scenarios and prices. “The $1.3bn case should probably be everyone’s base case,” days Deutsche. It adds that this would be “attractive” if a sale includes all of Sara Lee’s baking assets, such as operations in Spain and Australia. Deutsche says a $1.3bn price would yield a 7.2x EV to 2010 Ebitda and 6.6x 2011E Ebitda. If Bimbo were to pay the same price for only the North American assets, the multiple would rise to 13.0x to 2010A Ebitda. The Spanish operations include assets built by Bimbo’s founding family and later acquired by Sara Lee. According to Deutsche, Bimbo had tried and failed to reacquire the assets from Earthgrains. Meanwhile, Sara Lee would help expand Bimbo’s already significant presence in the US. The market now represents 43% of net sales, compared with the 46% that come from Mexico. Bimbo greatly expanded its presence in the US with the $2.5bn acquisition of Weston brands including US brands Arnold’s, Boboli, Brownberry, Entenmann’s, Freihofer’s, Stroehmann and Thomas’ in 2008. Acquiring Sara Lee would help provide Bimbo with more of a national footprint, with penetration of the Midwest, Southeast and Southwest markets, according to John Baumgartner, analyst with Telsey Advisory Group. In regions where Bimbo and Sara Lee overlap, Bimbo will be able to immediately consolidate delivery routes to improve operating margins, Baumgartner says. Bimbo declines to comment on speculation it is now the lead bidder for the business. Bimbo is said to have retained Atlas Advisors for the acquisition.
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Banorte Welcomes New Chairman
Mexican financial group Banorte has named Guillermo Ortiz as its new chairman effective in March 2011. Ortiz was head of Banxico, Mexico’s central bank, until early 2010, when Agustin Carstens took the position. Current chairman Roberto Gonzalez will become chairman emeritus. The appointments must now be approved by company shareholders.
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Infonavit Lands RMBS Jumbo
Mexico’s Infonavit has raised MXP3.37bn in UDI-denominated RMBS. The government-backed mortgage lender’s 2038 bonds pay a 4.15% fixed coupon, or Udibonos plus 295bp. Demand was 2.2x the offer, according to a banker on the deal. HSBC and Santander managed the sale, rated AAA on a national scale. Infonavit has sold MXP13.68bn this year of its mortgage backed bonds, commonly known as Cedevis.
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Lenders Await Pemex Allocations
Bankers are keenly awaiting this week’s allocations on a Pemex $3.25bn dual-tranche loan. It has apparently received over $4bn worth of commitments from 15 banks, not including the leads, a fact that raises some eyebrows. “They are asking for pretty big tickets for tight pricing,” says a banker not on the deal. “It’s not that far from where banks have their own funding costs,” he adds. The deadline for commitments was 2 weeks ago. Sizeable tickets received include $250m from Sumitomo across both tranches, $150m from Intesa on the 5 year tranche, and $75m from EDC to the 3 year, according to market participants. The 3 year tranche is a $1.25bn revolver to replace a 2007 loan that matured in September that had been priced at 25bp+Libor, for which it is offering 125bp over Libor. Fees for participation in the range from 25bp-60bp for $100m, $75m, $50m and $35m tickets. Bookrunners on the tranche are Barclays, BBVA, Credit Agricole (admin agent) and RBS. Pemex 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. Fees on the term loan range from 45bp to 85bp for $150m, $100m, $75m and $50m commitments.
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DomRep Gets IMF Disbursement
The IMF says it has completed a second and third review of the stand-by arrangement (SBA) with the Dominican Republic and approved a $249m disbursement. Up to now, total disbursements total about $688m. The SBA was initially approved on November 9 for a total of $1.7bn and the IMF says all benchmarks for the second and third reviews were met. The IMF says the 2011 budget envisages a consolidated fiscal deficit of 3% of GDP, a 1% drop, to be achieved through a reduction in indiscriminate electricity subsidies and a strengthening of tax collections by rationalizing tax exemptions and improving tax administration, targets that are in line with the original program.
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Peru Fish Anchors IPO For a Week
Peru’s Pesquera Exalmar expects to IPO on November 4, instead of Thursday as initially planned. The fishmeal and oil producer is waiting a week to accommodate international buyers needing to complete regulatory formalities, according to a source close to the transaction. Exalmar plans to sell 57.5m primary units and 54.4m secondary to both domestic and international investors. Exalmar does not indicate a value or price range, as the level will be set through an auction. It says in a prospectus that the sale should raise more than $100m. Proceeds are marked for repaying debt from recent acquisitions, buying boats, and expanding the footprint in Peru’s southern coast. Santander, Citi and Interbank are managing the sale, set to be the first Peru IPO since Interbank holdco Intergroup sold shares in 2007.
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Popular Issues COP Bonds
Colombia’s Banco Popular issued COP300bn ($163m) in local bonds in 4 tranches, all priced at par. A 1.5-year piece pays IBR plus 1.10% to yield 4.19%, a 2-year piece pays IBR plus 1.20% to yield 4.29%, a 3-year tranche pays IBR plus 1.40% to yield 4.50% and a 3-year tranche pays IPC plus 2.64% to yield 4.98%. Total demand was COP469bn. Proceeds will be used for working capital. The notes are rated AAA and the bank lead the sale itself.