Grupo Sports World was set to raise Wednesday MXP857m in its IPO, pricing shares at MXP16.00, below the bottom of a MXP18.50-MXP22.00 target range. The Mexican health club chain owned by private equity fund Nexxus Capital was to sell 53.6m shares, according to a source close to the transaction, which indicates that some but not all of the 7.3m available overallotment would be exercised. The base deal includes 21.6m primary and 26.8m secondary shares, according to the prospectus. Nexxus, which bought Sports World in 2005 through its second PE fund, will see its stake go to around 20%, from 67%. It is Mexico’s fourth IPO this year, and second largest after retailer Chedraui. Santander managed the Sports World deal, with Actinver and Ixe as co-managers.
Category: Regions
Mexico Reported on Yen Road
Mexico has started marketing its Samurai bond, eyeing a placement towards the end of the month, according to wire reports. Pricing is said to be in the range of the yen swap plus 50bp-60bp. Fresh off a $1bn 100-year transaction, the sovereign plans a 10-year bond of around JPY150bn yen ($1.8bn), guaranteed by the Japan Bank for International Cooperation, Mexican officials have said. Nomura, Mitsubishi UFJ, Morgan Stanley and Mizuho are managing the sale. Officials at the banks and the issuer decline to comment on the plans or could not be reached for comment. Mexico’s December 2009 Yen bond sale raised JPY150bn in 2019s to yield 2.22%, or yen swaps plus 80bp.
Jamaica to Meet Investors
Jamaica is set to meet investors in Europe beginning next week, according to a finance ministry official, with plans to meet the US buyside later in the month. Citi is managing the meetings, which are “non-deal.”
Cablemas Rating Rises
Fitch upgraded the ratings of Mexico telecom Cablemas to BB from BB minus to reflect the company’s improved financial profile and stable debt levels. Fitch expects leverage measured as total debt to Ebitda will remain between 1.5x and 2.0x in the medium term. In addition, it says the company’s debt maturity schedule is manageable. Total debt-to- Ebitda for the last 12 months ended June 30 is 2.1x, down from 2.3x in 2009.
Debt Payments Bring Univision to Table
Univision’s need to extend its debt load likely played role in bringing it to the negotiating table with Televisa, says Enrique Senior, MD at Allen & Co, which advised the latter on its buy. Univision has approximately $8bn in debt coming due in 2014 from its original sale in 2006, with about another $2bn maturing in 2015. Meanwhile, its programming license agreement with Televisa, which provides 90% of Univision’s prime time content, expires in 2017. “I don’t think any bondholder would have extended past 2017 without those agreements in place,” Senior says. Univision also commands sole US distribution rights to Televisa content. With a more attractive fee structure in place, analysts estimate that Televisa can expect to monetize significant portions of its media library in the growing US market. “The US marketplace is of paramount importance to Televisa’s strategy of expanding our reach beyond Mexico and maintaining our leadership as the leading media company in the Spanish-speaking world,” says Alfonso de Angoitia, EVP at Televisa. “Accordingly, we have been working diligently to realize the value of our content in the US. We are confident that this investment in Univision achieves our objectives while positively improving our financial results from day.”
Fertilizer Bond Returns at Higher Yield
Mexico’s Fertinal is attempting a new bond issue again, back with tighter covenants and a higher yield. Investors say the fertilizer producer was looking to get the $200m 2015 NC3 deal done this week at a 13.5% yield. UBS is managing the sale, postponed last week after the buyside did not bite at 12% handle talk. Proceeds from the B/B2 rated issue are marked for a $180m bridge, to partially finance capex and support working capital. The bridge is being used to reacquire assets from former creditors and satisfy other obligations associated with bankruptcy, according to Moody’s.
Bolivia Gets Ratings Upgrade
Fitch has upgraded Bolivia’s rating to B+ from B. the outlook is stable. The rating upgrade reflects Bolivia’s strengthened fiscal and external balance sheets, the economic authorities’ demonstrated ability to preserve macroeconomic stability, as well as a recent track record of timely debt payments, Fitch says. The economy’s resilience was evidenced by a real GDP growth rate of 3.4% in 2009, while growth for 2010-2011 will remain above 4%, according to Fitch, driven by a recovery in external demand and a strengthening of consumption and public investment expenditure.
Mexico Pays For Duration
Locking-in historically low interest rates available to quality LatAm issuers, Mexico has sold the first 100-year bond from a sovereign in the region, knocking the 2040 by pricing at a premium. The $1bn bond priced at 94.276 with a 5.750% coupon to yield 6.100%, or 30-year UST plus 235bp, in line with 6.100% area guidance. It was heard up 1pt in the gray at the end of the day Tuesday, with traders noting a 1pt drop in UMS 2040. Investors spot the premium to Mexico’s outstanding 30-year at 95bp-100bp, with bankers on the deal indicating 90bp-95bp. “We are at historic lows, and could potentially not see such low yields across the globe for a long time. You have to look at it from that perspective, even through they paid a bit of a premium,” Paul Biszko, EM strategist at RBC, tells LatinFinance. He notes the impact on the long end of the curve should be temporary. “This is what happens at the top of the market – they are securing this cheap financing for a long period of time,” says a West Coast EM investor who passed due to an overweight on Mexico. Bankers on the deal say an August $250m retap of BBB US railroad Norfolk Southern’s 100-year came 90bp wide to its 30-year, serving as a price reference. UMS has been heard considering the structure, though the market and issuer were surprised by the final $1bn size, upsized from $500m on about $2.6bn demand. “This was a non-obvious trade, but we’ve noticed the appetite for long-duration assets has increased in this low interest rate environment,” Gerardo Rodriguez, Mexico’s deputy undersecretary for public credit, tells LatinFinance. He says Mexico got the idea following a few corporate century issuances this year, and decided to take advantage of an all-time low yield environment. “Ahead of the transaction the question was weather we could break the negative dynamics around 100-year transactions,” he says, with deals characterized by low investor participation, small size, and low liquidity. Century issuance from Norfol
Pemex Gets Commitment on Jumbo Loan
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.
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.