Auto parts maker Nemak has agreed with a group banks to extend the maturity of its debt by 3 years to 2017, it says. Net debt at the unit of Mexican conglomerate Alfa was $1.23bn at the end of Q3. In December, Nemak sought waivers for its financial covenants after taking a hit related to FX-related derivatives, and began negotiations on extending its debt earlier this year.
Category: Regions
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Telmex Plans Domestic Issue
Telmex is preparing sell up to MXP6bn on the Mexican market, its second local sale this year. The telephone operator is able to place a combination of up to MXP6bn in 2014 floating-rate notes and up to MXP3bn in 2016 floaters. Telmex plans to use proceeds from the sale for general corporate purposes, including debt repayment. Inbursa is managing the sale, rated AAA on a national scale, though another bank may join. In June, Telmex sold MXP8bn in 2011 and 2013 FRNs.
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Panama Petroterminal Secures Project Funds
Petroterminal de Panama (PTP) has signed a $375m loan due 2018 to reconfigure an oil pipeline and build associated storage facilities. The syndicated project finance deal through HSBC as MLA and bookrunner priced at the higher of Libor+425bp and 6.75%, and is due July 15 2018. According to the leads, it is the largest private project finance transaction in Central America to date and was 1.3x oversubscribed, including 40% participation from locals. In order of size of ticket, participants were: BNP, Banco Nacional, Banco General, EDC, Scotia, Caja de Ahorros, Banesco, Bancolombia, Global Bank, CIFI, Towerbank, BAC, Metrobank, Produbank, Multibank and Banco Panama. The project-on-project risk and no outside cash equity is mitigated by a standby LC. Sponsors are the Panama government (50%), NIC Holding (33.17%) and Castor Petroleum (16.83%). HSBC was the co-swap provider and admin agent. PTP is a Panamanian corporation that provides crude oil storage, transportation, and transshipment services. Its primary assets consist of a 131km pipeline and 2 deepwater crude terminals with oil storage. Existing storage capacity consists of approximately 5.7m barrels (bbl) of tankage with 3.4m bbl currently under construction. The new project will expand total capacity by 5.4m bbl to 14.6m bbl. PTP also derives income from other services such as energy generation, marine services, operation of a cargo pier, and administration of a toll road.
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Hidalgo Signs Refinery Land Loan
Mexico’s Hidalgo state has secured a MXP1.5bn 12-year line of credit from Banamex at with a 1-year grace period, the state’s finance secretary Nuvia Mayorga Delgado tells LatinFinance. Proceeds were used to buy land for the $10bn Bicentenario refinery project, which is being run by Pemex, and the rate is 200bp over TIIE. Mexico’s head of public credit Gerardo Rodriguez tells LatinFinance that the funding for the refinery will come from an already agreed capex plan. It will have a 5-6 year construction period, starting in the second half of 2011, says Mayorga. The new refinery will require more than 48,000 construction workers, and the state is looking at creating infrastructure to support that phase. Mayorga says that Pemex chose Hidalgo over other states competing for the project because of its existing support infrastructure. She adds that the cost of operation over the 30-year life of the project was also lower.
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Banorte to Talk Capital Increase
Mexico’s Grupo Financiero Banorte said Wednesday it will propose a capital increase at a shareholders’ meeting planned for this month. The meeting will be held October 23 at the company’s headquarters in Monterrey, Banorte says in a filing with the local stock exchange. It does not provide further details of the capital increase.
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Avianca and TACA Fly Together
Colombian airline Avianca is merging with Central American carrier TACA to form a group that the pair says will produce nearly $3bn in aggregate annual revenue. The deal could lead to equity issuance, according to an analyst covering the sector. “The shares of both Avianca and TACA’s controlling entities will be contributed to a new holding company in a business combination worth in excess of $3bn,” says TACA. Avianca shareholders will control two thirds of the new company, with the other third in the hands of TACA owners, according to Reuters, which cites TACA CEO and chairman Roberto Kriete. “Each operating company will remain independent while the new group will leverage best business practices across both organizations,” TACA says. “It makes sense in that the 2 didn’t have a choice,” says an equity analyst covering the sector who asks not to be identified. “It doesn’t make sense because they both need money . . . the equity market is the logical next step,” he adds. Kriete will become chairman of the new group’s board, Avianca CEO Fabio Villegas will serve as CEO, while TACA COO Estuardo Ortiz will be COO and Avianca CFO Gerardo Grajales will head up finance. The merging entities note that the airline sector faces a still challenging economic environment, volatile fuel prices and intense competition. Bank of America-Merrill Lynch and Caoba Capital acted as financial advisors to TACA, while Greenberg Traurig was counsel. Simpson Thacher & Bartlett and Gomez-Pinzon Zuleta were counsel to Avianca. Avianca and TACA serve more than 100 destinations worldwide, including 75 cities in LatAm. The transaction is subject to regulatory and other antitrust approvals.
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Peru Expected to Keep Rate at 1.25%
In line with consensus, Morgan Stanley expects Peru’s central bank to keep the monetary policy rate on hold at 1.25% despite the continued drop in inflation as the bank waits for the effects of the past policy easing to filter through to the economy and the global recovery to lift expectations and domestic demand. Bulltick Capital, on the other hand, is going against market consensus and expects a 25bp cut, bringing the policy rate to 1.00%. Its forecast is based precisely on inflationary weakness. “The September 2009 inflation number came at -0.50% month over month, bringing annual inflation to 1.20% from 1.87% in August and from 6.53% year over year at the beginning of the year,” it says. “The central bank’s inflation target range is 1.00% to 3.00% and we expect the rate to end the year at its lower end, at 1.00% year over year, giving the bank further room to cut rates and maintain them low for long,” Bulltick adds.
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Morgan Stanley Sees Colombia Growth
Morgan Stanley has improved its 2009 GDP growth forecast for Colombia to 0.5% expansion from a 0.9% contraction, and 2010 to 4.1% from 2.6% growth. The shop says that Colombia’s GDP contracted less than other LatAm economies when the external shock hit in Q4 2008. While Colombia saw a 1.4% contraction, Brazil’s GDP shrunk 3.4%, Chile’s 2.4% and Mexico’s economy 2.4%. It also says economic activity in Colombia quickly returned to the growth path this year, expanding by 0.3% and 0.7% in the first and second quarters, respectively.
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Kimberly-Clark Sells MXP Bonds
Kimberly-Clark de Mexico has sold MXP2.7bn in bonds on the domestic market. The Mexican unit of the manufacturer of Huggies diapers and Kleenex tissues placed MXP2.3bn in 2014 floating-rate notes at TIIE plus 95bp and MXP400m in 2019 fixed rated bonds paying 9.67%, or Mbonos plus 190bp. Demand topped MXP4.6bn on the floating part and MXP1.1bn on the fixed portion, according to bankers on the deal. Banamex and HSBC managed the sale, rated AAA on a national scale. It was the issuer’s second placement of the year, following a MXP3.5bn fixed and floating-rate placement in March through the same banks. GE Capital is expected to follow today with MXP2bn in 2012 floaters via Banamex.
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Chilean Moly Maker Places Mexican Notes
Chile’s Molymet has sold MXP700m in bonds, becoming only the second foreign issuer in Mexico’s domestic market, according to bankers managing the sale. The processor of molybdenum and rhenium sold MXP700m in 2011 bonds at TIIE plus 205bp. The issuer, which wanted to come to market last year before the crisis hit, opted not to place 2014 UDI-denominated bonds for which it had also filed. Credit Suisse and Banamex managed the sale, rated AA/AA+ on a national scale. Santiago-based Molymet operates a molybdenum processing facility in Sonora, northwestern Mexico. Spanish utility Iberdrola last year was the first foreign issuer in Mexico’s local market, with a MXP1.5bn 2018 bond.