Pemex generated hefty demand for an eagerly awaited MXP10bn sale of local bonds, pumping new life into Mexico’s ailing domestic capital markets. “This could be something of a water-parting issue for the market,” says Judith Verdejo, director of debt analysis at Ixe, speaking of the oil play’s first local issue in almost 3 years. “The hope is that with positive macroeconomic news, stability can return and [domestic bond] spreads might be able to come down a bit,” she adds. The state-owned oil company priced MXP6bn in 2012 bonds at TIIE plus 100bp and MXP4bn in 2016 bonds at a fixed 9.15%, or Mbonos plus 150bp. The sale saw demand of MXP24.7bn, according to bankers on it. Buyers were mostly Mexican institutional investors. “This is positive, there is a new benchmark. I hope this is not an isolated incident only for a name like Pemex,” says a Mexico City DCM banker away from the deal. He adds that sentiment in the domestic market has been ticking higher in recent weeks. At its last domestic placement in 2006, Pemex sold MXP10bn in 8-year notes paying TIIE minus 7bp, according to Dealogic. The issue was aided by the government’s announcement Wednesday that it will ask for a $47bn credit line from the IMF and activate a $30bn swap line with the US Fed, which fueled a rally in local markets. Pemex Tuesday indicated a MXP10bn maximum size for the issue and was not surprised that it was reached, given a recent supply drought and the fact Pemex had not issued locally for a long time, says a banker on the deal. The issue, rated AAA on a national scale, is the first from a 5-year MXP70bn shelf filed this year. Citi, HSBC and Santander managed the sale, which follows a local roadshow. Proceeds will go to fund Pemex’s investment needs. CFO Esteban Levin has said Pemex plans to sell $2bn-$3bn equivalent of bonds in the domestic market this year. Bankers, investors and other corporates hope the Pemex local trade will help establish price benchmarks and facilitate more peso issuanc
Category: Regions
Suez Unit Scoops up Peru Hydro Project
Enersur, the Peruvian unit of GDF Suez, says it plans to acquire 100% of Quitaracsa, the company that owns the concession to develop the country’s Ancash hydroelectric project. Enersur does not disclose the price it will pay for Quitaracsa but the holdco’s previous owners, S&Z Consultores, estimate developing the project would cost $132m. A local energy sector analyst who asked not to be named notes Quitarasca does not have any income, since it only owns the concession for the unbuilt project, which is expected to eventually generate 115MW. Enersur is acquiring the project from Minera Atacocha, which holds a 92% stake, and from S&Z, which owns the remaining 8%. An Enersur spokeswoman declines to discuss the acquisition.
Colombia Taps Ashmore, Inverlink for Infrastructure
Colombia signed on Tuesday formal agreements to start a $500m-$700m infrastructure fund to be administered by Ashmore Investment Management and local firm Inverlink. “Infrastructure can’t be financed with public funds alone. There needs to be private investment,” Oscar Zuluaga, Colombia’s minister of finance, said at the signing ceremony on the last day of the IDB meetings. In an earlier interview, Colombian government officials decline to pinpoint likely recipient projects, but say the government has been receiving many viable proposals. They tell LatinFinance the fund, which will also receive sponsorship from the IDB, CAF and Bancoldex, will be open to all types of projects that offer strong returns and has the possibility to grow beyond $750m. Macquarie is serving as technical advisor.
Darby Preps Colombia Transport Fund
Darby Overseas Investments and Colombia’s Colpatria are preparing to raise a $300m fund with Colombian investors to support transportation infrastructure projects in the Andean country. “We’re looking to bring in our expertise and some of our own captial to work together with a partner in the country,” Darby Overseas CEO Richard Frank tells LatinFinance. The plan, he says, is to raise capital initially from domestic financial institutions and offer target projects local currency financing. This follows the model Darby has used in countries such as Brazil and South Korea. The fund will look at medium-sized projects of roughly $300m-$400m in size, in which it would take tickets of $30m-$40m. The fund aims to raise capital mainly with pension funds and insurance companies, and deploying equity, debt and mezanine funding. Jorge Castellanos, the Colpatria executive who will manage the fund, explains that private investment is critical for supporting infrastructure in Colombia, especially in today’s economic environment. The fund will consider both brown and greenfield projects, including roads airports and seaports. It has already received interest from projects totaling about $7bn, Frank says. Frank expects a first closing by mid-year.
ISA Fires up COP Bonds
Colombian grid operator ISA is set to price Thursday two tranches of local bonds worth some $80m with 6 and 9 year maturities, say executives on the deal. The offering, which could grow to $100m, marks ISA’s first local tap since December. Francisco Chavez, a bond analyst at Bogota-based Corredores Asociados, says he thinks a 6-year ISA bond could come at over 100bp over TES, and 500bp-520bp over IPC. For the 9-year, the TES spread could land in the 120bp-150bp, while a margin over IPC could vary between 500bp-550bp, says Chavez. Correval, Citi and Bancolombia are leading.
Banorte Local Tap Runs Dry
Mexico’s Banorte issued Tuesday MXP1.34bn in local 10-year subordinated notes in a sale that ended up falling short of the issuer’s MXP2.2bn target. The sale is fourth installment from a MXP15bn program. The notes, which were distributed largely to a retail investor base, were priced at TIIE plus 200bp. Pricing expectations were in the 175bp-200bp area, says an executive on the deal, attributing the weak appetite to generally poor market conditions. Banorte self-led the A3/AA rated deal.
BIF Joins IFC’s Global Trade Finance Program
Peru’s Banco Interamericano de Finanzas (BIF) has joined IFC’s global trade finance program, the IFC says. “IFC’s support to BIF is in line with our strategy in Peru to improve access to finance for SMEs and to expand global trade opportunities for local firms, helping mitigate the impact of the financial crisis,” says Roberto Albisetti, IFC country manager for Colombia, Ecuador, Peru and Venezuela. BIF is the first Peruvian bank to join the program, which in LatAm includes 33 banks in 13 countries.
Panama Miner Lands Convertible Debt
Petaquilla Minerals, which operates the Molejon gold project in Panama, has issued $40m in convertible senior secured notes. Each $1,000 note is convertible into common shares at CAD2.25 per share. The notes carry a rate of 15%. The first 12 months of interest will be prepaid in full at the time of issuance of the note. A Petaquilla spokesman says that it is up to noteholders to decide when and if they want to convert into stock. He adds that the convertible was the company’s only option to increase capital, and that the company had considered other paths of financing. He says Petaquilla opted against selling shares because its stock is undervalued, and dilution at current levels is undesirable. Petaquilla shares on the TSX closed at CAD0.425, up 16.44% from the previous close. Casimir Capital, a New York based mining boutique, acted as placement agent for the deal.
Comerci May Settle Derivative with Long Loan
Mexican retailer Comerci may look to convert a $1.4bn derivative loss into a 10-year loan, according to Marisol Huerta, analyst at Actinver. Last week’s news that Gruma succeeded in securing a 7.5-year loan at 287bp over Libor to settle part of its derivative loss leads the analyst to believe pricing on any new facility with a longer tenor for Comerci would likely start at 300bp over Libor. The company’s creditors may ask the retailer to post some of its assets as collateral for the new loan, Huerta tells LatinFinance. Most likely, the land Comerci owns, which is valued at around MXP12bn, could be used to back new loans. Huerta also believes creditors will push Comerci to sell its 50% stake in Costco’s Mexico operations to pay down derivatives debt before extending a new facility. At year-end 2007, Comerci said that its Costco stake at was worth MXP1.45bn. Actinver believes the asset can be sold for around 0.8x book value, or a loss of MXP0.26 per share. Comerci shares close Monday virtually unchanged at MXP4.01.
Colombia to Kick Off Infrastructure Fund
Colombia is set to formally launch Tuesday a $500m-$700m infrastructure fund administered by Ashmore Investment Management and local firm Inverlink to support infrastructure projects. “Investors are looking for more opportunities from sovereigns at the moment,” Viviana Lara, Colombia’s director of public credit tells LatinFinance. The fund, which will also receive sponsorship from the IDB, CAF and Bancoldex, will be open to all types of projects that offer strong returns and has the possibility to grow beyond $750m, Lara says. The official declines to indicate any likely projects, but says that the government has been receiving many viable proposals. Macquarie is serving as technical advisor.