Colombian conglomerate Colpatria has jumped back into the country’s pension fund sector by acquiring Colfondos, the country’s fourth largest pension fund, from Citi. Chile-based private equity shop Linzor Capital, and New York-based Palmfund Management partnered with Colpatria in the acquisition. Jose Restrepo, an equities analyst with Interbolsa who covers the sector, estimates the buyers could have paid between $275m and $320m for Colfondos, which has $5.6bn in assets under management. Colfondos’ net assets add up to about $100m. Restrepo believes the acquisition is positive for Colpatria, as it enhances the company’s diversification. Colpatria, which owns companies in sectors ranging from construction to banking, had sold its pension fund business 10 years ago to BBVA. That business became known as BBVA Horizonte and is the third largest pension fund in Colombia. Linzor Capital declines to comment on the transaction, which is subject to regulatory approval, and the other buyers of Colfondos did not return calls for comment.
Category: Regions
Brookfield, AC Capitales to Manage Peru Fund
The Peruvian government says it has selected Canada’s Brookfield Asset Management and locally owned AC Capitales to manage an infrastructure-focused private equity fund that aims to raise $500m. Brookfield and AC Capitales have committed $100m to the vehicle, says a Brookfield spokesman. Additional commitments are expected from the IDB and CAF. A first close, say the fund managers, is expected in early 2010.
Emgesa to Issue Short-Term Bonds
Power utility Emgesa says it is planning to issue COP600bn, about $315m, in COP-denominated bonds over the next 2 years. The bonds will be issued in four series, up to 1-year in duration. Series A will have a maximum variable rate of 15% over DTF, Series B will have a maximum variable rate of 15% over IPC, Series C will have a fixed rate of 20%, and Series D will have a maximum variable rate of 15% over IBR. Proceeds will be used to optimize the cost of the company’s debt by replacing its current debt with debt with cheaper rates. Emgesa expects Fitch to rate the bond issue F1+. Bookrunners for the issuance are still to be selected.
Infonavit Sells MXP2.7bn RMBS
Mexico’s Infonavit has sold MXP2.68bn in mortgage-backed bonds denominated in the UDI inflation-linked unit. The 2031 notes priced at a fixed rate of 5.5%, 12bp lower, it says, than a similarly-structured MXP1.5bn August issue. Demand reached MXP3.7bn, Infonavit says, for the issue rated AAA on a national scale. The federally-funded home lender has now sold MXP8.7bn of its MXP10bn target for 2009. Banamex and HSBC led.
Pemex Reopens Euros for Borrowers
Pemex pounced on attractive relative pricing in Europe Wednesday with a tightly priced EUR1bn 2017 issue, the first non-sovereign public deal from LatAm in that currency since 2005. The sale targeting European investors priced at 99.311 with a 5.500% coupon to yield 5.623%, or mid-swaps plus 250bp, following 255bp area guidance. Demand reached EUR2.6bn, according to bankers managing the Baa1/BBB+/BBB sale, who note participation from more than 270 accounts. “LatAm Euro-denominated issue has generally traded wide to dollars over the last few years. We began to see that relationship reverse about 5 weeks ago,” explains a banker on the deal, who estimates that the new bond priced 5bp-10bp through dollars. He adds that the transaction reopens the euro market for other high quality LatAm names with a reputation in Europe. “It’s flat to the dollar curve and very competitive,” says a banker at a competing shop. “It opens up a benchmark that might be followed,” he adds. The deal is the first Euro-denominated LatAm quasi sovereign since Pemex’s EUR1bn 2025 issue in 2005, according to Dealogic. It is the first from LatAm since a Brazil sovereign euro issue in early 2006. Deutsche Bank and Calyon managed this week’s sale. The state-owned oil producer appears eager to raise cash anywhere it sees liquidity, in order to cover an $18.6bn 2010 capex budget. Pemex sold $1.5bn in 2015s September 10 to yield 5.033%, followed by a CHF350m 2014 deal to yield 3.525%. It was in China last week, apparently seeking new sources of funding. This year has also featured an August EUR200m private placement of 5.779% 2017s from Pemex, as well as a GBP350m sale of 8.25% 2022s in May.
Peru on Path to High Grade
Moody’s has placed Peru’s Ba1 bond rating on review for possible upgrade to reflect the sovereign’s track record of stable economic policymaking and reduced risks from the economy’s relatively high degree of dollarization. “The review reflects signs of increased shock-absorption capacity in the face of adverse external conditions,” said Mauro Leos, regional credit officer for LatAm. “The government’s enhanced policy flexibility is also evidenced by its successfully steering of the economy towards a ‘soft-landing’ after a period of above-trend growth,” he adds. The country’s Baa3/P-3 country ceilings for long- and short-term foreign currency debt and its Ba2 country ceiling for foreign currency deposits were also placed on review for possible upgrade. Moody’s last week upgraded Brazil to Baa3 from Ba1.
Veteran Mexico Economist Retires
Alfredo Thorne, Mexico chief economist for JPMorgan for the past 14 years is retiring and moving to his native Lima, confirms Gabriel Casillas, who is taking Thorne’s place. Casillas, who was previously with UBS and has been at JPMorgan 1 week, says that Thorne’s last official day with JPMorgan is today.
Carlyle Mexico MDs Launch New Venture
The 4 executives in charge of Carlyle Mexico Partners are setting up an independent private equity shop, EMX Capital, to focus fully on investing in Mexico, Joaquin Avila, one of the managing directors, tells LatinFinance. EMX, he says, will be in charge of investing what’s left of Carlyle’s $134.4m Mexico fund, spending $10m-$30m on a project that is likely to close in about 6-8 weeks. Avila adds that the majority of the fund is already invested. Some of the industries the fund might invest in, Avila adds, are education and healthcare. After the Carlyle fund is fully invested, Avila and his partners – Rodrigo Fonseca, Miguel Valenzuela and Andres Obregon – will continue to focus on Mexico with EMX, as Carlyle seeks to focus on establishing larger funds upwards of $500m in other markets such as Brazil. Avila denies that there was an MBO, as was rumored among Mexico City-based bankers. Carlyle will still hold a minority stake in EMX, which will operate from the same premises. A Carlyle spokesman declines to disclose the size of the remaining stake, and rejects local chatter that Carlyle is pulling out of Mexico. Carlyle Group co-founder David Rubenstein said last week that he is bullish on Brazil as risk aversion subsides, and he expects assets under management in the region to increase.
Bolivia Debt Metrics Improve
Moody’s has upgraded Bolivia to B2 (stable) from B3 amid general improvements in the main debt metrics and a reduction in the still-high levels of domestic political confrontation. “Years of above-trend growth and the benefits of external debt forgiveness have significantly improved most of Bolivia’s credit metrics,” says Gabriel Torres, a Moody’s VP and sovereign analyst. “Foreign reserves are now close to 50% of GDP, and government savings surpass 10% of GDP,” he adds. Political and policy differences between the government and the opposition are still wide in the run-up to December’s national election even though last year’s political turmoil has subsided, says Torres. “Going forward the political system will likely be tested to resolve these differences without affecting the strength of institutions or the implementation of public policy,” he adds. Moody’s notes that Bolivia last year grew over 6% and is likely to be among the few countries in the region to register expansion in 2009. However, it will be challenged to maintain recent growth rates given very low investment ratios.
EPM Gets Investment Grade
Fitch has upgraded Colombian utility Empresas Publicas de Medellin’s (EPM) rating to BBB minus from BB+ with a stable outlook. The upgrade is due to “increased geographic diversification of the company, a result of the acquisition of 4 distribution companies during the past 2 years,” says Fitch. It adds that EPM’s ratings also take into consideration the company’s strong performance of and its continued operations with limited government intervention. EPM reported a consolidated Ebitda of approximately COP2,572bn ($1.3bn) and total consolidated debt of about COP3.3bn ($1.6bn).This translates into a leverage ratio of 1.3x, which Fitch considers strong for the rating category.