Mexico’s Ternium is heard looking to close a $350m 5-year amortizing loan this month. The deal through Calyon and Citi was launched in November and commitments are due by January 16. The average life is roughly 3 years. Only five banks are expected to participate. “I think it will be a club deal at the end of the day,” says a banker not leading the transaction. Integrated steelmaker Ternium, which has operations in Mexico, Argentina, the US and Guatemala is being marketed as a Mexican credit.
Category: Regions
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Santander Able to Buy in Peru
Pacific Credit Rating has maintained its A financial strength rating for Banco Santander Peru, citing the bank’s sound expense and investment policy, risk management, strength and experience at the parent company and its potential to grow through acquisitions. “The bank has not announced any concrete plans to make acquisitions, but it is able to buy smaller banks this year,” says analyst Eduardo Lora. It could buy banks that cater to individuals, to diversify away from corporate banking, where Lora says it has been focused.
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Colombia Seizes Window With 2019
Colombia has priced a $1bn 2019 bond at 99.136 with a 7.375% coupon to yield 7.500%, or 502.9bp over UST. Bankers away from the deal say Colombia paid about 50bp-60bp new issue premium, based on its 2017s opening Tuesday at yields of around 6.95%. This compares to roughly 40bp on last month’s Mexico issue. The Ba1/BBB minus bond through Barclays and Morgan Stanley was heard trading up 25-50 cents in the grey market. The transaction saw demand of just over $3bn, according to the issuer, from 141 accounts, about 66% of which were based in the US, 20% in Europe and 10% in Colombia. “We saw that there were good conditions and decided to execute the trade, anticipating harsher conditions in the future and other countries and corporates trying to access funds,” Maria Escobar, head of international capital markets at Colombia’s ministry of finance and public credit, tells LatinFinance. “We thought if we were the first issuer and a good issuer we could re-open the market for sovereigns and corporates,” she adds. Escobar says Colombia has always been active in pre-funding, but conditions last year did not allow this. The sovereign secured $2.4bn loans from multilaterals in October as a backup. Now, she says the sovereign will decide whether to disburse $1.4bn of those funds, or to use the full $2.4bn and keep the rest to pre-fund 2010. More details will be available when Colombia announces its 2009 financing plan later this month. Colombia last hit the international bond market almost a year ago, reopening for $650m its 7.375% of 2017 bond to yield 5.997% and $350m in 7.375% 2037 bonds to yield 6.601%.
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Termoemcali Gets Rating Reprieve
Fitch has upgraded Colombia’s Termoemcali’s $153.7m restructured senior secured notes due 2019 to B minus (stable) from CCC to reflect improved flexibility to meet debt service obligations primarily from expected reliability payments and to a lesser extent from gas sales. “The rating action also considers the reduced dependence on the capacity (Tranche E) payments from Emcali (rated CCC, stable outlook by Fitch), which constrained the previous rating,” says the agency.
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Ecuador Eyes Dept Repurchase
Ecuador plans to buy back its foreign bonds due in 2012 and 2030 at a discount of at least 70% this month, according to local and wire reports citing Economy Minister Diego Borja. Borja reportedly says the government will hold a series of auctions to purchase the securities. The 2012 and 2030 bonds – which have an outstanding face value of more than $3bn – trade at 20-30 cents on the dollar following last month’s default on the 2012s, a move which fuelled speculation that the government was trying to drive down prices of its debt. Ecuador is still deciding whether to default on $650m in global 2015 bonds, on which it missed a $31m payment last month.
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Companies Consolidate Peru Subsidiaries
Several companies operating in Peru have announced they are consolidating subsidiaries. In late December, Scotiabank notified Conasev of its plan to merge its Servicios, Cobranzas e Inversiones subsidiary with Recaudadora. Also, agricultural company Palmas del Espino has merged subsidiaries Industrias del Espino and Negociacion Agricola Ganadera Don Manolo. Industrias absorbed the second subsidiary effective January 1 and the company says the transaction will not entail any increase in capital, stock swaps or payments. In addition, December 24 Telefonica announced it was merging its Peruvian operations, Telefonica del Peru and Telefonica Moviles Peru, also known as MoviStar. Victor Miranda, an analyst with Pacific Credit Rating in Peru, says the move will make TdP the market leader in mobile communication, where Telefonica Moviles has a 60% share.
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Argos in Deals with Vale, Paz del Rio
Colombia’s Cementos Argos has agreed to sell some of its coal mining concessions and logistics assets to Vale for $373m in cash. Research firm Bolsa y Renta analyst Carlos Eduardo Gonzalez says that Argos had previously expressed intentions of selling these assets and that the price Vale has agreed to pay is in line with expectations. The shop rates Argos a buy. In this transaction, Credit Suisse and Bancolombia advised Argos. In a separate deal, Argos has invested $41.2m to acquire limestone rights from Aceria Paz del Rio, also from Colombia. Terms of financing were not disclosed and company officials were not available for comment.
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Volatility Halts Su Casita Sale
Shareholders of Su Casita have voted to suspend an agreement to sell to Spain’s Caja Madrid the 60% of the Mexican mortgage lender it does not already own. The decision was made “due to the global financial crisis, the volatility of the capital markets and the negative state of the global economy,” Su Casita says. To make up for some of the EUR215m the sale would have brought in, the shareholders also agreed to raise MXP500m in fresh capital during the first quarter of 2009.
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Fitch Cuts Transtel on Debt Exchange
Fitch has lowered the ratings of Colombian telecom operator Transtel Intermedia to D from C, it says. The move follows the company’s announcement that it is seeking to exchange its 12% 2016 senior notes with new senior secured step-up notes. The agency finds that offer “qualifies as a distressed debt exchange due to the diminished terms of the proposed notes.” Transtel has made the exchange offer during the 30-day grace period following a missed December 1 coupon payment, Fitch notes, and the company should be further challenged by a $4.5m maturity of a 2008 bond on December 31. In a tender launched Tuesday, Transtel offered holders of the 2016s an equal principle amount in step-up notes plus warrants for its common stock, in an exercise led by Morgan Stanley, expiring January 22.
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Moody’s Puts Brakes on Ford Mexico
Moody’s has chopped the long term Mexican national scale debt rating of Ford Credit de Mexico to Caa1.mx from Ba3.mx. The outlook is negative. The new long-term Mexican national scale rating indicates very weak creditworthiness relative to other domestic issuers. The cut comes after the agency downgraded parent company Ford Motor Credit’s senior unsecured rating to Caa1 from B3, with negative outlook.