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.
Category: Regions
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Mexico Takes Advantage of Multilats, Exims
Mexico looks to continue to take advantage of multilateral and export-import bank funding, Gerardo Rodriguez, its head of public credit says. With its external needs for the year taken care of through December and February issues, the sovereign will focus on balancing multilateral and domestic market sources. “The idea with multilaterals is to ramp up our programs as much as possible so that we can do some of the funding that we would otherwise do in the local market,” the official says. “These institutions are built to address difficult situations. This is the time to use them, and not the time to buy back or reduce external debt,” he adds. He explains Mexico is also reviving relationships with the export-import banks. Mexico’s exposure with these banks has been reduced in recent years, he explains, but the strategy now is to take advantage even more of such resources where funding is competitive and counter-cyclical. As for local markets, the sovereign will continue adjusting its own local issuance, while helping to open markets for high-quality private issuers. “Over the next couple of quarters, we expect, as market conditions permit, to continue increasing so that we can get to similar issuing amounts at the medium and long end of the curve, as those that we had before we scaled them back in October of last year,” he says. Rodriguez explains that feedback from a recent roadshow for state-owned oil producer Pemex has been good. The issuer is preparing a local bond, likely “short to intermediate” in tenor. A successful execution, could also be followed by a new issue from state utility CFE.
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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.