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.
Category: Regions
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Banamex on Rating Watch Negative
Fitch has placed Banamex’s A rating on rating watch negative after having done the same with the Mexican bank’s parent company Citigroup. The potential downgrade of Citigroup’s IDRs to their unsupported level of BBB+ would likely affect Banamex’s IDRs negatively, the agency says. Fitch explains that Citigroup’s negative watch reflects its interpretation of a recent rule that says that under no circumstances should taxpayers ever be called upon to bail out systematically important financial institutions in the future.
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Banobras Sees Demand for 4-Year Issue
Mexico’s Banobras has issued MXP7bn 4 year bonds on Tuesday on more than MXP19bn of orders, according to a banker at sole lead Banamex. The bonds priced flat to TIIE, the low end of 0bp-10bp guidance, says the banker. “The order book was diverse with all types of investors,” he adds. Investors had said TIIE flat was fair for the credit. The bonds were rated Aaa on a national scale by Moody’s. The rating is based on the bank’s status as a government-backed issuer. Banobras provides financing for states and municipalities, particularly for infrastructure projects.
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Bimbo Reported Leading Bakery Bid
Grupo Bimbo, the Mexican food company, is reported to have stepped into the pole position for Sara Lee’s North American bakery unit, according to wire reports. A New York-based banker away from the deal says Bimbo has retained Atlas Advisors, the same boutique that advised the company on its $2.5bn acquisition of US baked goods business Weston Foods in 2008. Atlas did not return calls for comment. Grupo Bimbo could not be reached. “They’ve been a serial acquirer in the US,” says the banker. “They’ve totally digested the second of the Weston acquisitions at this point, so you’ve got to assume this is high on their list.” Although previous reports had put a price tag for the unit at between $1.1bn and $1.6bn, a Mexico-based banker away from the deal said it would be unlikely to reach $1.5bn, though he expects it to sell for over $1.0bn.
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Cemex Repours Covenants
Following the announcement of its fourth straight quarterly loss, Cemex has asked to rework bond covenants. The cement maker announced that it has agreed to pay a 25bp fee in order to make the changes, and will pay 100bp if it does not raise $1bn in equity or equity-linked securities by the end of 2011. In return, Cemex gets to reset its maximum consolidated leverage ratio to 7.75x 12-month trailing Ebitda through June 2011, decreasing gradually to 4.25x by year-end 2013. Previously it was to be 6.75x though the end of this year, before falling gradually to 3.5x by year-end 2013, according to Barclays. Cemex also reset its minimum consolidated coverage ratio to 1.75x during 2011-2012, and 2x through year-end 2013, from previous requirements of 1.75x to the end of 2011, 2.0x by June 2012 and 2.25x by year-end 2013, according to Barclays. Cemex also notes amendment to the terms of the reserve of its domestic bonds to improve liquidity and refinancing risk management, without elaborating further. Shares rose 7%, to MXP10.84, and bonds tightened 25bp, according to a report from Scotia. While Scotia notes likes the bonds from a fundamental perspective, “for spreads to rally, we think Cemex needs to demonstrate an inflection point in the downward trend in prices and volumes in order to reassure investors,” it says.
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ECM Kicks Off Diversity Month
LatAm equity investors are gearing up for at least 6 scheduled deals in the next 3 weeks, including a trio on Thursday. Though only OHL Mexico’s MXP15bn IPO should turn heads in terms of size, diversity seekers will be encouraged in that only 1 in 6 is Brazilian. The group should test enthusiasm for ex-Brazil equity, which may be keen following continued Petrobras overhang and that market’s most recent IPO, HRT, trading down 6.3% in the 2 days trading since debut. Following recent enthusiasm in the bond markets for Argentina, real estate developer TGLT is set to price Thursday what would be that country’s first IPO since 2007, for $100m-$130m equivalent. The subscription period launched October 21, with a ARP9.00-ARP11.50 range for the sale of 45.4m shares, with the possibility of upsizing to as much as 61.8m. Raymond James Argentina is managing the sale. Elsewhere, Brasil Insurance is set to raise more than BRL500m Thursday, through the sale of 191,000 primary and 191,000 secondary units, with the possibility of a 15% greenshoe and 20% hot issue. The IPO – welcome as a play away from commodities – has a BRL1,250-BRL1,450 range, and is led by Morgan Stanley, BTG Pactual, JPMorgan and HSBC. Meanwhile, Peru’s Exalmar is shooting for more than $100m in what would be that country’s first domestic IPO since 2007. Elsewhere, Mexican homebuilder Sare is also looking to raise Thursday up to MXP805m through a follow-on sale of up to 317m primary units, through BBVA and Santander. Sare closed Tuesday at MXP3.10. The Mexican market is most anticipating OHL, coming between November 4 and November 11 at MXP24-MXP30, which should test appetite for size in that market. Finally, metals processor Molymet is looking to raise more than $200m, in a follow-on that would be Chile’s first deal since March.
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Elementia Lands at Guidance
Mexico’s Elementia has issued MXP3bn in 2015 bonds at a spread of TIIE plus 275bp, according to one of the leads. This was in line with 275bp area guidance. The bonds were issued to finance operating costs and to refinance outstanding debt, including half of the debt from any existing $450m 5-year term loan. Moody’s assigned a Ba3 rating to the bonds and a Ba3 corporate family rating to Elementia with a stable outlook. Inbursa and Arka were the leads.
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Nestle Ecuador Preps Securitization
Nestle’s Ecuadorean unit plans to raise $74m through a 4-tranche accounts receivable securitization, according to a report from Fitch subsidiary BankWatch Ratings del Ecuador, which assigns a AAA domestic rating. In what would be its second such transaction, the food products company plans a $20m 3-year 7.25% coupon tranche, a $15 5-year 7.75% tranche, a $35m 7-year 8.25% piece featuring a 1-year grace period, and a $4m 7-year subordinated slice paying 8.75%. The deal is guaranteed by future sales in Ecuador and follows a $70m ABS in 2008. There is not yet a timetable for the deal, as it has not been approved by regulators.
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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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Banobras to Issue up to MXP7bn
Mexico’s Banobras is expected to issue up to MXP7bn in 4 year bonds today, rated Aaa by Moody’s on a national scale. The rating is based on the bank’s status as a government-related issuer. Investors expect the bonds to price flat to TIIE – 4.87% Monday – which they say is fair for the credit. Banobras provides financing for states and municipalities, specializing in infrastructure projects. Banamex is the bookrunner.”