Mexican banks IXE Grupo Financiero and Grupo Financiero Banorte say they have reached a non-binding agreement to consider a merger. According to IXE, the 2 financial groups have significant synergies, with the combined institution becoming the third largest in the country by either assets or deposits, and the only bank of its size controlled by Mexican shareholders. A combination of the 2 could help fend off an acquisition by a larger foreign competitor, according to a Mexico-based banker, while IXE’s retail operation can give Banorte greater presence in DF and the southeast. Details of the merger are not disclosed, but bankers say IXE is unlikely to sell for less than 2x book. JPMorgan is rumored to be advising IXE, but declines comment. JPMorgan advised IXE on its bancassurance alliance with RSA Mexico earlier this year.
Category: Regions
Moody’s Chops Su Casita’s Rating
Moody’s has downgraded Mexican mortgage lender Hipotecaria Su Casita to C from Ca. The change comes after Su Casita missed payments of MXP300.0m on principal and MXP6.0m on the interest for its Casita 06 notes, as well as principal and interest on its Casita 01810 and Casita 01910 notes for MXP384.5m and MXP40.2m, respectively. Moody’s says Su Casita’s current liquidity position is weak, and the C ratings reflect the potential for above-average loss severity on Su Casita’s senior unsecured debt as the company continues to negations with all its creditors on a restructuring.
Pemex Loan Generates Interest
Mexico’s Pemex has received over $4bn worth of commitments for its $3.25bn dual-tranche loan, according to bankers not running the transaction. The deadline for commitments was last week, with signing expected by the end of October. Sizeable commitments received include a $250m commitment from Sumitomo across both tranches, a $150m ticket from Intesa for the 5-year tranche, and a $75m commitment from EDC to the 3-year tranche, according to market participants. The first tranche is a $1.25bn 3-year revolver, to refinance 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+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.
BP Sells Vene Assets
UK-based oil company BP confirmed yesterday that it is selling assets in Venezuela and Vietnam to Russian peer TNK-BP for $1.8bn. BP also declined to comment on the potential value of those assets, though they have been estimated at $1bn, according to an industry banker not associated with the deal. In Venezuela, TNK-BP, a 50/50 joint venture between BP and several Russian businessmen, says it will acquire from BP a 16.7% equity stake in the PetroMonagas extra heavy oil producer, a 40.0% stake in Petroperija, which operates the DZO field, and a 26.7% stake in Boqueron. These assets operate as joint ventures with PVDSA and have a combined capacity of 25 thousand barrels of oil equivalent per day. The buyer says the acquisitions will be financed through cash on hand and will not require additional capital from the shareholders of TNK-BP. A deposit of $1bn will be made by October 29, with final payment upon completion. Goldman Sachs and HSBC acted as BP’s financial advisors, says a company spokesman, while TNK-BP’s board was advised by Lexicon Partners and management by Credit Suisse.
PDVSA Launches Bond Sale, Swap
PDVSA plans to swap 2011 bonds for 2013s in an offer to investors through November 12 and offer new 2017 bonds through the end of the week. The Venezuelan state-owned oil company will sell the $3bn worth of B+ 8.5% of 2017s at par in an offer through Friday. As with previous government offerings, the offer is directed at individuals and businesses with the “sector productivo nacional,” and investors will be allowed to buy the dollar-denominated bonds with Bolivars at a VEB4.30 per dollar rate. Results are set to be announced Monday. Separately, PDVSA will offer holders of its 6% 2011 bond new 8% 2013 bonds at an exchange rate of $1,125 per $1,000 if done by October 28, and $1,015 per $1,000 if done after. Citi is managing both processes.
Sofol Preps MXP Issue
Mexican lender Consupago is readying a cross-border sale of MXP750m in 2013 bonds. The Sofol specializing in payroll discount loans has issued yield guidance of 9.5%-10.0%, with the deal expected to price today or tomorrow, according to a banker on it. The issue is denominated in pesos, with payments in USD, and will raise funds to increase the bank’s capital. BCP Securities and GBM International are managing the BB minus sale, which was presented to investors last week and comes under Consupago’s $300m shelf.
Qatar Buys Into Santander Brazil
Santander has agreed to sell a 5% stake in the Santander Brasil unit to Qatar Holding in the form of $2.72bn in convertible bonds. The mandatorily convertible 6.75% 3-year notes come with an exchange price of BRL23.75. The deal with the sovereign wealth vehicle will help Santander Brasil reach its goal of a 25% free float by 2014, Santander says. Last year’s BRL12.3bn IPO of the Brazil unit floated about 15%. Santander Brasil closed Monday at BRL24.53.
Televisa Pulls Out of Nextel
Broadcaster Televisa has pulled out of an agreement to acquire a 30% stake in Nextel Mexico, according to a joint press release. According to Nextel: “The decision to terminate the Investment Agreement stems from the parties’ differences in views on the regulatory and other risks associated with the investment and their inability to reach agreement on modifications to the Investment Agreement that would address those risks.” Televisa did not respond to calls for comment. Nextel also says the decision to terminate the agreement stems from Televisa’s decision to maintain its independence while pursuing opportunities in the Mexican wireless space. Televisa had said it hopes to bring quadruple play to Mexican consumers with the deal, which was conditional on Nextel/Televisa being awarded licenses to use specified amounts of spectrum in upcoming auctions in Mexico.
First Quantum Enters LatAm Mining
Canada-based copper miner First Quantum Minerals is making its first entrance into LatAm via the acquisition of peer Antares Minerals for CAD460m, the company says. Antares owns copper and gold assets in Peru and Argentina. As part of the deal, each Antares share will be exchanged for 0.07619 of each First Quantum share or a cash payment of CAD6.35 per Antares share. Also, Antares’ 50% stake in the Rio Grande project in Argentina will be spun off into a new company, Regulus Resources. The new company will be 90.1% owned by existing Antares shareholders and 9.9% by First Quantum. If the deal does not go through, Antares will have to pay the buyer a break-up fee of CAD13.5m. “LatAm is an important copper jurisdiction, so it is certainly has been on our radar,” according to a spokeswoman, adding that First Quantum will be looking for more acquisition opportunities. First Quantum operates in Australia, Africa and Finland. BMO Capital Markets is First Quantum’s advisor while Antares worked with Dundee Securities.
CAF Hits up Swiss, Looks to Japan
CAF has raised CHF250m ($261m) in new 2015 bonds in the Swiss market, and is closing in on a new Japanese bond. The Swiss bonds priced at 100.334 with a 2.625% coupon to yield 2.650%, or mid-swaps plus 146bp, in line with mid-swaps plus 147bp guidance. The deal was upsized from CHF150m, according to a CAF official, as demand topped CHF250m. Some 40 investors participated. It is the second-ever Swiss issue for CAF, following a CHF200m sale in 2008. The multilateral lender may also price a Samurai bond in the Japanese market as soon as this week, the official says, after the bank recently filed for a shelf allowing for JPY100bn in new transactions. He declines to give details of the current sale, though notes Mizuho and Nomura are managing, and the issue won’t require a guarantee from the Japan Bank for International Cooperation, unlike other recent LatAm issuance in Japan. CAF sold JPY10bn in 2019 bonds last year.