Colombian Retailer Almacenes Exito plans to issue $111m in shares to minority shareholders of fellow retailer Carulla Vivero to help finance the purchase of the 22.5% stake in Carulla it doesn’t yet own. Exito will issue 14.3m shares at $7.75 each. Exito acquired a controlling stake in Carulla in 2007 and is aiming to buy the remaining part of the company by March. Exito, which is controlled by French retailer Casino Guichard-Perrachon, plans to pay $222m for the rest of Carulla, to be financed half with cash and half by the 14.3m share sale. Corredores Asociados is leading the placement. Between November and December, Exito raised COP435bn ($218m) through the sale of 30m new shares at COP14,500 each, also through a group led by Corredores Asociados.
Category: Regions
Peru Scores High Grade Hat Trick
Moody’s has raised Peru’s credit rating to Baa3 from Ba1, becoming the third agency to assign an investment-grade rating to the sovereign, more than a year after S&P and Fitch. “As with other sovereigns that have been recently upgraded, the decision to raise Peru’s foreign currency ratings was driven by indications of increased shock-absorption capacity relative to similar or higher-rated sovereigns,” Moody’s says, calling the country an “ordinal winner” during the crisis. The agency lauds Peruvian authorities’ ability to employ counter-cyclical policies during the turmoil and the government’s fiscal flexibility. The remaining risks come from political events and a per capita income that compares unfavorably with that of other Baa-rated countries, Moody’s says. Fitch gave Peru its BBB minus mark in April 2008, with S&P following three months later.
Homex Sees Mexico Consolidation
The lingering effects of Mexico’s recession should create buying opportunities for the country’s largest homebuilders next year. “There will be lots of opportunity for consolidation,” Gerardo de Nicolas, Homex’s CEO, tells LatinFinance. It will be easier to take market share in 2010,” he addsMexican homebuilders are suffering the effects of a housing-related downturn in Mexico, and smaller operators in particular have become vulnerable. Among the better known players in the country are Geo, Javer, Urbi, Sare, Ara and Desmet, which is currently holding debt restructuring talks with creditors. Homex is not considering any acquisitions at the moment, says de Nicolas, but he does however, expect to acquire land banks from Mexico’s smaller developers at attractive prices in 2010, he says. De Nicolas explains that the 2009 fall by 50% in new homes offered in Mexico has been accompanied by a 42% drop in the number of homebuilders offering new homes. Homex currently has 10% of the market. Homex expects to continue to grow, but de Nicolas says he does not foresee the need to raise additional capital in 2010.
Stanford Sale Awaits Closing
Panama-based reinsurance company QBE del Itsmo and local tourism tycoon George Novey won the auction to acquire the country’s Stanford Bank operations, according to a banker involved in the process. He adds that the current bank president, Ramon Martinez, will stay on board. A lawyer working on retrieving Stanford assets in LatAm believes the sale price could be around $10m-$12m. Closing of the deal, however, has been waiting for approval from the receiver, Texas-based attorney Ralph Janvey, since September, notes an executive with the Panama’s securities regulator. The LatAm lawyer, who says the Panama bank was not connected to the fraudulent scheme, hopes the deal will be fully approved by the end of the year. The local bank regulator seized Stanford’s Panama operations in February after the SEC accused Texas billionaire Allen Stanford, the founder of parent Stanford Financial Group, of running an $8bn Ponzi scheme. Panama is not the only place where Stanford banks are being sold. The LatAm lawyer explains that Stanford brokerages in Ecuador and Peru could also be sold. Meanwhile, in Mexico the bank is being liquidated and in Venezuela, the government took control of the bank. Separately, the IIC has approved an equity investment of up to $8m in preferred stock in QBE. The IIC will sell a participation of 50% of its investment to the China-IIC SME Equity Investment Trust Fund. The deal aims to help the company to launch new mass market insurance lines, especially dental, and expand regionally in Brazil, Chile, Costa Rica, Colombia, Honduras, Guatemala, Panama and Peru. “QBE del Istmo is a regional company led by an outstanding team, with substantial growth potential in Latin America,” says Tomas Bermudez, IIC equity investments coordinator in charge of the operation.
Colombia Group Taps Water Bonds
Colombia’s Grupo Financiero de Infraestructura (GFI) has issued COP125bn-equivalent ($62.4m) in UVR-denominated domestic bonds supporting water projects in various small municipalities. The issuer returns with the so-called “Bonos Agua” five months after an initial attempt to place them failed because of lack of demand. Investors needed time to understand the novel structure, according to an official involved in yesterday’s transaction, which was sold to various types of Colombian institutional buyers. The UVR-denominated 19-year bonds pay 9%. In the deal, the first of its kind for Colombia, the issuer will on-lend proceeds to a group of 30 municipal governments to support water and sewerage projects. The cities will pledge future revenues to the trust to guarantee repayment of the bond. The issue is the first from a UVR2bn (COP375bn) program, under which the country’s state and municipal level governments can access credit to finance water and waste improvements at rates they could not achieve in the commercial bank or capital markets. Privately held GFI plans to do 1-2 bond issuances per year, as well as add new municipalities to the scheme. Colombian boutique Konfigura structured the transaction, and Corredores Asociados, Citi, Correval and Serfinco distributed it. The original sale was postponed in July when the minimum order threshold was not met.
Ecuador Bottler Caps Securitization
Ecuador Bottling Company, a unit of Coca-Cola, has raised $32m in the local market through a securitization of sales receivables. A 1-year $5m tranche pays 6.50%, a 3-year $11m piece pays 7.75%, and a 5-year $16m piece pays 8.75%, according to a term sheet. The issuance, sold on both the Quito and Guayaquil stock exchanges, is rated AAA by Pacific Credit Rating. Produvalores, the brokerage arm of Produbanco, managed the sale. The deal follows a $30m securitization of retail auto loans by GMAC’s local arm, placed on September 11, paying 8.00% for a 2-year piece and 9.25% for a 4.5-year piece.
S&P Lowers Mexico
S&P has lowered Mexico’s debt rating to BBB from BBB+, with a stable outlook, becoming the second agency to cut the sovereign within the past month. “The downgrade reflects our assessment that Mexico’s recent steps to raise non-oil revenues and improve efficiencies in the economy will likely be insufficient to compensate for the weakening of its fiscal profile,” says the agency, which sees modest GDP growth prospects and diminished oil production revenues. The country’s inability to widen the tax base and a low likelihood of major tax reform in the next several years suggest its debt profile will remain more in line with BBB peers, it says, projecting government debt at 34% of GDP for 2009-2011. “Market participants were pricing in an extension of the [S&P] negative outlook period,” says JPMorgan in a report. “As a result, we believe that local markets reaction will be limited, particularly as the ‘negative’ outlook was lifted (it is now ‘stable,’)” add the shop’s analysts. They do not expect Moody’s to follow Fitch and S&P in lowering Mexico, as that agency has recently provided a more optimistic appraisal of Mexico’s fiscal pressures. S&P also lowered government mortgage lender Infonavit and banks Banobras, Banamex, ING Mexico and BBVA Bancomer each one notch to BBB. The Mexican Bolsa closed up 0.3% at 32,010 Tuesday, while the MXP tightened to MXP12.81, from MXP12.93 at Friday’s close.
Colombian Bank Upsizes Local Tap
Colombia’s Helm Bank has sold COP300bn ($148m)in 4 series of domestic bonds after upsizing from COP200bn on the back of COP920bn in demand. Pricing came well within maximum levels set by the issuer in advance of the sale. A COP49bn 3-year fixed-rated tranche pays 6.19%, versus the 6.60% maximum set pre-sale. A COP51bn 3-year meanwhile pays the IBR rate plus 1.29%, well short of the 1.90% cap. A COP116bn 5-year priced at IPC plus 4.02% (4.60% maximum) and a COP84bn 10-year piece pays IPC plus 5.04% (5.70%). Helm’s brokerage was lead manager on the sale, rated AA+ on a national scale, joined by 8 other brokerages. Helm says this issue is part of a plan to issue up to COP1.5trn in bonds over the next 5 years. Other banks on the deal were Alianza Valores, Corredores Asociados, Correval, Davivalores, Interbolsa, Serfinco, Ultrabursatiles and Valores Bancolombia.
Mexico Adds Yen to Funding Arsenal
Mexico wants to fund more in yen after selling JPY150bn ($1.7bn) in 2019 bonds to Japanese institutional investors through its first Samurai in nearly 10 years. “We want to reestablish our presence in the Japanese market,” says Gerardo Rodriguez, Mexico’s deputy undersecretary for public credit. “We are looking forward to consolidation of more benign conditions that would allow us to issue in the yen market on a non-guaranteed basis,” he tells LatinFinance. The sovereign used a 95% JBIC guarantee to place the bonds, which were sold at par with a 2.22% coupon, or Yen Libor plus 80bp. The enhancement was needed to pave the way to a skittish local investor base that stopped buying EM during the crisis. Rodriguez adds the sovereign is pleased with the transaction, as pricing is cheaper than the dollar curve on a swap-equivalent basis. Adding the cost of the guarantee brings pricing about equal to a dollar bond, he adds. Rodriguez stresses that it was essential to hit the yen market for not just compelling pricing, but also for size and tenor too. Proceeds will supplement borrowing done this year, and Rodriguez says Mexico still plans to raise $2bn-$3bn externally in 2010 to meet some $2.4bn in maturities. He adds that he expects a few more EM and LatAm issuers to make use of JBIC support to issue in the Samurai market, eventually followed by non-guaranteed issuance. The private placement went to “more than a handful” of Japanese institutional investors, including insurance companies, banks and mutual funds, says the issuer. Nomura Securities and Daiwa Securities SMBC managed the sale.
Peru Keeps Rates Unchanged
In line with expectations, Peru’s central bank has kept the monetary policy rate unchanged at 1.25%, citing a continued reduction in inflation, which was minus 0.11 in the month of November. According to the research arm of Peruvian bank BCP, inflation in Peru will be just 0.5% in 2009. It expects inflation to be 2.1% in 2010.