Colombian financial institution Banco de Bogota is planning to issue COP200bn this month through an auction. The deal is part of a total of up to COP1.5trn the company plans to issue over a 5-year period to raise working capital, says German Salazar, head of international affairs and treasury. Salazar tells LatinFinance that the COP200bn issue is in subordinated bonds rated AA+. They will have terms of 7 and 10 years and be pegged to DTF, IPC or UVR, he adds. The remainder of the COP1.5trn will be issued as ordinary bonds starting later this year or early in 2011, depending on demand, Salazar says. Banco de Bogota itself will manage the sale. Banco de Bogota, Colombia’s second largest bank in terms of assets, is part of Grupo Aval.
Category: Regions
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Grupo Mexico Buys Drilling Company
Grupo Mexico says it has acquired engineering company Compania Perforadora Mexico (Pemsa) for $240m as part of its strategy to increase its participation in the infrastructure sector. A company spokeswoman declines to say how it is financing the deal or if it had outside financial advisors. Pemsa, which has provided drilling services for Pemex for 49 years, had $91m in 2009 revenue and Ebitda of $30m.
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Pemex Broadens Investor Base
Being the only Mexico deal in town so far this year, Pemex says it capitalized on tremendous excess liquidity with last week’s bond issue. It sucked in more than 250 orders for MXP36bn worth of new bonds, its finance manager says. “The fact that there haven’t been any deals recently in the local market really helped to create the demand we saw yesterday,” Mauricio Alazraki, MD of finance at Pemex, tells LatinFinance. “It paves the way for other issuers to come to the market,” he adds. The MXP15bn sale was divided into a MXP8bn 5-year floater paying TIIE plus 70bp, a MXP5bn 10-year fixed piece paying 9.10%, and a MXP2bn UDI tranche paying 4.20%. He credits this 3-tranche structure – Pemex had not done an UDI-denominated offer since 2004 – with helping to expand the investor base. Pemex has a goal of $2.8bn net indebtedness for 2010, he says, of which MXP20bn-MXP40bn should come from domestic markets. In January, it sold $1bn in 2020 bonds to yield 6.126%. “We always want to be earlier in the [international] market. But there is no rush. We printed $1bn, and that was the right size,” says Alazraki. “It’s likely we will go again to international markets, either dollars, Euros, sterling or wherever we see a good opportunity,” he adds. For Pemex, the local market is a little more attractive in terms of price at the moment, though the company plans to borrow significantly from both this year, says the official.
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Copeinca Sets Peru Bait for Foreign Investors
Peruvian corporates should be able tap foreign bond investors, according to fishmeal exporter Corporacion Pesquera Inca (Copeinca), which placed last week a well-received $175m 2017 bond. “There had not been a corporate issue from Peru in about 4 years. So perhaps this issue can help other companies take out debt,” Copeinca CFO Eduardo Castro tells LatinFinance. “Investors perceived Peru as a very strong emerging economy,” he adds. Copeinca wanted to refinance a $185m 2012 syndicated loan and the Peru local market is only absorbing $50m-$70m equivalent issues at 3-5 years, says Castro. He adds that it is improving steadily, and should support $100m equivalent deals by 2011. Copeinca is the second largest Peruvian fishmeal producer, a sector that saw a lot of pre-crisis M&A. “Right now we don’t see a lot of opportunity for further acquisitions, given that the prices for fishmeal are very high,” Castro says, noting that his company has spent 2008-2009 digesting prior acquisitions. In Tuesday’s bond deal, Castro notes the markets turned more favorable this week after Greece-driven investor worries dissipated. He says the fishery was pleased with the investor response, and notes that about 20% of the book went to Asia, which was included on the roadshow as about 70% of exports go to that region. US investors bought 50% and European 30%. The BB minus bond priced inside guidance at 9.125%, via Credit Suisse and Santander.
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IMF Comes Through for Jamaica
The IMF has approved a 27-month $1.27bn stand-by agreement (SBA) for Jamaica, of which $640m will be made available immediately to establish a financial stability support fund. The funds aim to support Jamaica’s reform program to address deep-seated structural weaknesses in the economy, increase its growth potential, and make it less vulnerable to external shocks, says the IMF. The SBA is expected to generate about $1.10bn in finding from other international financial institutions. In addition, Jamaica closed Wednesday a JAD700bn ($7.86bn) exchange offer to holders of 350 different classes of domestic securities, with final results due out next week that are expected to show an acceptance rate of over 95%, according to an official familiar with the process. Burdened with costly interest rates, the government offered holders a par exchange for bonds with lower interest rates and longer maturities. The maturity extension should be an average 2.5 years, with interest rates lowered from an average of 18%-19% to 12%, according to ratings agency and sell-side analysis. The government claims the operation will save JMD40bn annually in interest payments. Citi managed the process.
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Peru Securitizer Preps Debut RMBS
Titulizadora Peruana is presenting investors this week with its first ever mortgage-backed security offering. The deal for up to $35m should price in the next 2 weeks, says Jefferson Ganoza, director of structured finance and risk management at Titulizadora. The 20-year paper, backed by mortgages from BCP and Interbank, has an average life of 9 years and will pay a fixed rate. The bond is dollar-denominated to match the currency of the loans. About 60% of Peru’s $4.5bn mortgage market is dollar denominated, Ganoza says. Subordinated bonds will represent about 6% of the issuance. BCP’s Credibolsa unit and Inteligo are placement agents for the deal, rated AAA on a national scale.
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EMP Financing Palm Oil Company
Washington DC-based investment fund manager EMP Global is extending $17m in financing to Mexico palm oil producer Promocion e Industrializacion de Palma (PIP) and subsidiary Propalma through its CentAm Mezzanine Infrastructure Fund (Camif). The financing, structured as a long-term mezzanine loan, will allow the company to consolidate its ownership of Propalma and other operating companies and also will provide resources for the company’s expansion. Creel García-Cuellar Aiza y Enriquez acted as counsel to Camif, with Covington & Burling acting as special US counsel. Olea Abogados was counsel to PIP.
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EPM Awaits Deal Nod
The telecom unit of Colombia’s Empresas Publicas de Medellin has submitted its plans for a bond issue of up to COP1trn ($504m) to the local regulator for approval. A company spokesman says that the exact amount to be issued and terms have not yet been determined. He adds that proceeds will be invested in new technology and company growth. BRC Investor Services has given the issue an AAA rating.
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Pemex Extracts Cash from MXP Desert
The sun appeared to be shining in at least one corner of the financial markets Thursday, as Pemex raised MXP15bn from a 3-tranche bond sale in Mexico’s domestic markets. The transaction marks Mexico’s first corporate bond deal of the year and bankers hope that it sparks more activity. An MXP8bn 5-year floating-rate tranche pays TIIE plus 70bp, a MXP5bn 10-year fixed piece pays 9.10%, and a MXP2bn tranche denominated in the UDI inflation-linked unit pays 4.20%. Total demand for the 3 tranches was close to MXP36bn, according to bankers on the sale. “It is clear there is a lot of liquidity,” says one. Tapping into that liquidity has been difficult for Mexican borrowers do far this year, however. The country’s institutional investors have demanded tighter covenants for all but the very top issuers. BBVA, HSBC and Santander managed the sale, rated AAA on a national scale. The issuer was not immediately available for comment.
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Superfinanciera Ticks Codensa Issue
Colombia’s securities regulator has given energy company Codensa the green light to issue up to COP600bn in bonds. The issue, rated AAA, will have 5 tranches with maturities between one and 25 years. The tranches will be COP, UVR or USD-denominated and pegged to DTF, IPC or IBR or pay a fixed rate. A company spokeswoman says the timing of the issue has not been decided and that it has not been mandated. Codensa is owned by Spanish energy company Endesa.