Banco Internacional del Peru (Interbank) is planning a $150m subordinated bond due 2070, according to a Moody’s report assigning a Ba3 mark. The non-cumulative fixed/floating rate step-up junior subordinated notes transaction will raise funds for Interbank’s Panama branch, Moody’s says, with the debt transferred there after it receives its operating license. JPMorgan and Bank of America Merrill Lynch, who ran a $250m hybrid transaction for compatriot BCP last year, are heard to have been tapped to manage.
Category: Regions
Posted inDaily Brief
Thunderbird Seeks Peru PE Raise
Thunderbird Resorts, a provider of branded casino and hospitality services, says it has recently sold a hotel in Peru for $8.4m. Proceeds were used to cut senior bank debt to around $19m and the company says it is looking to do a private equity offering for its Peru hotel, casino and slot parlor operations. If successful, it plans to establish all operations under a “to be formed” holding company. “This new structure calls for an equity investment sufficient to pay down a significant portion of the total debt on the Group’s casino and hotel properties in Peru,” it adds. It is also reviewing possible longer term refinancing scenarios as a possible solution to address short-term cash requirements. “The sale and refinancing efforts along with the equity raise will continue simultaneously,” says the group. Thunderbird had previously announced marketing to sell 4 of its 6 Thunderbird Hotels properties in Peru, including the one sold recently. The plan was to use the net sale proceeds to pay down the senior bank debt and other mezzanine debt, while not selling the 2 properties that include casinos. Thunderbird says that while efforts to sell 3 of the remaining 5 hotels continue, the offers it is receiving do not reflect the full valuation at operating levels. Thunderbird focuses on markets in Central and, South America, Southeast Asia and India.
Posted inDaily Brief
Southern Copper Readies Bond Return
Southern Copper, the US-domiciled Grupo Mexico subsidiary operating in Peru, is set to market new 2020 and 2040 bonds. The benchmark sized deal is spotted at up to $1.5bn by ratings agencies. The miner formerly known as Southern Peru Copper Corporation plans to begin a roadshow today in Boston, and visit New York, Los Angeles, Chicago and London, finishing Monday, with a deal to follow. Marketing is expected to be directed at both high grade and EM accounts, notes a banker on the deal. The miner has broad appeal but may also offer a pickup to higher-rated names such as America Movil and Coca-Cola Femsa that recently went mostly to investment grade, he adds. Proceeds will be used for general corporate purposes including capex relating to a $2.8bn investment program over the next 3 years to increase copper and molybdenum production and enhance operating efficiencies, according to Fitch and Moody’s, which assign respective BBB and Baa2 ratings. Credit Suisse, Goldman Sachs and Morgan Stanley are managing the sale. Southern Copper’s last dollar sale was a $400m 2035 bond in 2006, according to Dealogic.
Posted inDaily Brief
Mexico Dents Curve With Long Tap
Making up for some of the recent sovereign slack, Mexico has issued dollar bonds for the third time this year, raising $1bn from a reopening of its 2040. However, the extra supply caused the long end to trade off about 2 points on the day, or a widening of about 15bp, according to a trader away from the deal. Greek woes continue to pressure EM, but JPMorgan notes that Mexico’s deal actually helped drag down the whole EMBIG fixed income benchmark. The UMS reopened the 6.05% 2040s at 97.724 to yield 6.218%, or US Treasuries plus 137.5bp, in line with 135bp-140bp guidance. Investors spotted the reopening concession at about 10bp-12bp, slightly wider than the 2020 sale done in January, but a similar pickup to a 2020 reopening in March. “At about 10bp, there is a little bit of value. Mexico has outperformed peers recently,” says a New York-based EM debt investor looking at the deal. He notes that Mexico now generally trades flat to Brazil after an improvement that began last year. “They had $500m-$1bn to go to complete this year’s financing needs,” says a banker on the deal, noting that UMS had hit the 10-year space already in 2010 and detected demand at the long end. He adds that a widening in price on the day is expected with a large reopening, and should eventually normalize. The transaction drew $2.25bn in orders, according to bankers on the deal. About 140 accounts participated, including high grade and EM investors. Credit Suisse and Goldman Sachs managed the sale, rated Baa1/BBB. There is now $3.25bn in outstanding 2040s, following a $1.5bn original sale in January 2008, and a $750bn tap in September. Mexico said last month that it is also considering issuing in yen and/or euros to wrap up this year’s financing plan.
Posted inDaily Brief
Moody’s Chops Panama’s Newland
Moody’s has downgraded the ratings of Panama-based Newland to B2 from B1, citing recent construction cost increases, which has resulted in a shortfall in the construction escrow account of about $26.9m. Failure by the developers to pay the required shortfall would constitute an event of default under the bond indenture resulting in the bond becoming due and payable immediately, the ratings agency says. Newland has 2 interest payments due in May and November, which the company has sufficient funds to pay through collections and a debt service reserve account. Newland is a real estate development company established to develop the Trump Ocean Club International Hotel & Tower in Panama City.
Posted inDaily Brief
Auto Lender Readies MXP Bond
NR Finance, an auto lender catering to Nissan and Renault buyers in Mexico, is preparing to issue up to MXP2bn in the domestic bond market. The 1.5-year bullet notes will pay a spread over TIIE. The final amount has not been determined, but should be capped at MXP2bn, according to a report from Scotia, which expects a placement this month. Proceeds will support NR’s lending capabilities. BBVA Bancomer is managing the sale, rated AA+/Aa1 on a national scale.
Posted inDaily Brief
T&T Mulls Foreign and Local Issues
The finance ministry of Trinidad & Tobago is considering issuing a $350m 15-year overseas bond. The sovereign aims to pay 5.5%-6.0%, Janette Cupid-St Hilaire, director of T&T’s public sector finance, tells LatinFinance. A 10-year TTD1bn ($155m) paying around 5.8% is also expected to be sold locally. She adds that issuance remains to be confirmed, and that an official decision is expected in the third quarter. She says proceeds will be used to cover the 2010 fiscal deficit. JPMorgan analyst Neeraj Arora writes in a research note that the FY2009-10 budget envisions an overall fiscal deficit of 5.4% of GDP, or $1.2bn, assuming an average WTI oil price of $55 per barrel and natural gas prices of $2.75mmbtu. “We expect some improvement to an overall fiscal deficit of 4.0% of GDP. For the first five months of the fiscal year [October-February] oil prices have been higher than budgeted [$74 compared to $55], which should have boosted government revenues,” he adds.
Posted inDaily Brief
Panama Targets Local Debt Curve
Despite recently clinching investment-grade, Panama plans to focus on its domestic debt curve this year, its director of public credit says. The sovereign does not foresee the need to issue externally in 2010. “Ideally, we’d develop the 0-10 year portion of our sovereign curve in the local market, and the 10-30 year portion of the curve outside,” Mahesh Khemlani, director of public credit, tells LatinFinance. Panama is authorized to sell up to $600m this year. It recently sold $43m in 3.50% of 2013 paper to yield 3.13%. Panama’s debt has dropped from 70% of GDP in 2004 to 45% in 2009, Khemlani explains. He adds that 90% is fixed and almost all is dollarized. About $6.7bn of the republic’s $10.9bn in domestic and external debt profile is due 2020 or later, according to documents provided by the government. The only upcoming spike in maturities is $1.47bn for 2015. “We will have to do a liability management operation for that,” says Khemlani, adding that the hump does not cause great concern. Whenever Panama returns to international issuance, it will be boosted by last month’s bump up to investment grade by Fitch. Moody’s has it on review for a possible upgrade to BBB minus, and Khemlani says he expects at least 1 more high grade endorsement this year. He says the government is acting across several areas to achieve this. Panama has seen real GDP growth averaging 9.7% between 2005-2008. It expects to receive $2bn a year from the canal by 2015, and $5bn per year by 2025, up from $778m in 2009. Increased canal contributions could lead to the creation of a sovereign wealth fund, Khemlani says. The government plans to monetize government-owned land, particularly areas adjacent to the canal unused in the expansion. It is also contemplating privatizations, and plans to award this year a concession for a $1.5bn metro project. Panama is also boosting revenue by closing taxation loopholes and strengthening enforcement.
Posted inDaily Brief
AEI Guatemala Plant Wraps Up Loan Syndication
AEI has closed a $350m 10-year term loan for construction of the 300MW Jaguar Energy Guatemala power plant, after tapping mostly regional lenders. The developer formerly known as Ashmore had sought a $500m A/B loan in 2008. But after waiting out the global credit crisis, it launched in December a single-tranche $350m 10-year loan paying Libor plus 575bp. It is led by Bancolombia and Cabei. Participants are: Guatemala’s Banco Industrial, G&T Continental, Banco Reformador and BAM, as well as HSBC, Panama’s Banco General and Costa Rica’s Bicsa. “With the regional banks we were able to have group of sophisticated lenders who could deliver quite fast,” Luis Alfredo Turizo, director of corporate finance at Bancolombia tells LatinFinance. The deal also features participation from the Biba Inversiones de Capital investment fund, administered by Bancolombia with commitments from Colombian pension funds. Turizo says this is the first fund of its kind under new legislation allowing for such investment. The project also counts on a $200m deferred payment financing from China Machine New Energy (CMNE), the contractor on the project. The facility is subordinate to the $350m loan, and is payable on project completion and convertible into equity at AEI’s option. CMNE is the first Chinese contractor to win an engineering, procurement and construction contract in Central America, says Turizo. Tickets on the loan were $10m-$50m, he adds, with the lead arrangers each committing $66.5m. The Jaguar plant near Puerto Quetzal has a 15-year power purchase agreement with local distribution companies owned by Spain’s Gas Natural, and should be online in 2013. Turizo says he expects to see more such regional lending groups in Central America.
Posted inDaily Brief
Bancomer Preps Local Notes
BBVA Bancomer is preparing to sell 3-year bonds in Mexico’s local market, according to regulatory filings, expected this month. The Mexican bank has not given a size for the placement of the floating-rate notes. BBVA Bancomer is managing the sale, rated AAA on a national scale.