Two large Peruvian banks are heard preparing of subordinated debt offerings to be priced in the coming month. The two deals, each estimated in the $150m-$200m range, are meant to fortify Tier 1 and Tier 2 capital requirements, say bankers familiar with the process. The transactions could take one of two forms: a 15 NC5 bond for Tier 2 capital requirements, which is the more likely scenario, or a 30-year NC10 for Tier 1 capital requirements. For Tier I, a 60-year maturity is also a possibility, say bankers familiar with this type of transaction. Likely issuers include Scotiabank, Interbank, BBVA Continental and BCP. Among the likely houses underwriting the deals, which are placed with international investors in the 144A market, are Citi, Merrill Lynch, Credit Suisse and Deutsche Bank, says one executive close to a Peruvian bank. The hybrid deals would follow in the footsteps of a dramatically reduced offering by Banco Industrial of $30m in 60-year NC10 securities that carry a 9% handle in the first 10 years. Credit Suisse led that offering, originally launched at $100m. Separately, BCP and BBVA are set to bring MT100 future flow securitizations as early as this month via Wachovia and Standard Chartered for the former and Sumitomo for the latter.
Category: Regions
Canada’s Pacific Rubiales Snags Colombian Outfit
Canadian natural gas and oil producer Pacific Rubiales has acquired 100% of Colombian oil and gas Kappa Energy for approximately $168m. Kappa holds exploration and production licenses in nine oil blocks in Colombia, where it has been operating since 1997. Pacific Rubiales also owns Meta Petroleum, a Colombian oil company that operates the Rubiales and Piriri oil fields in the Llanos Basin alongside Ecopetrol.
Deutsche Opens Peru Office
Deutsche Bank has opened an office in Peru, making a move into a region that represents a growing interest for Wall Street shops. Deutsche Bank Peru’s new office in Lima is headed by Jose Miguel Alcalde, chief country officer for Chile and Peru. Eduardo Sanchez-Carrion, a director, has been appointed head of global markets sales for Peru reporting to Alcalde, Marcelo Blanco and David Hinsley, co-heads of Latin American capital markets and institutional sales. Gino Monteferri was hired from Scotia’s Peru office where he was head of FX and fixed income trading. At Deutsche he will be head of global markets trading in Peru, reporting to Alcalde and Christian Binaghi, head of LatAm trading.
Alstom Signs for DF Metro Line Supplies
French conglomerate Alstom and its Mexican partners ICA and CICSA have signed a contract with the transport authority of Mexico City for supplying and installing all the electromechanical equipment on the new line 12 of the city’s metro for EUR330m. The company will supply the electrification, substations, operations control center and signaling, telecommunications and ticketing systems, system performance and testing, according to a statement. A launch is slated for mid-July 2008 and the project is expected to be finished by late 2011, according to Alstom. ICA and CICSA will be in charge of the engineering. The total cost of the project is an estimated EUR1.1bn.
Xignux Brings MXP1.4bn Bond
Mexican electrical parts maker Xignux has priced MXP1.4bn in 2015 bonds with a coupon of 10.48%. Proceeds from the AA nationally-rated deal will repay MXP1bn in debt maturing this year at its Conductores Monterrey subsidiary, says the company. The funds will also be used for other corporate purposes. Banamex managed the sale.
Chilean Metals Producer to Hit MXP Debt Market
Chilean metals producer Molibdenum y Metales has filed to issue 2018 bonds in the Mexican market, to be denominated in pesos or the UDI inflation-linked unit. The amount has not been set, but it would be the first offering under a MXP3bn shelf filed this month through Banamex. Molymet, as it is better known, produces mainly molybdenum and rhenium at facilities in Mexico, Chile, Germany and Belgium. The transaction has national scale ratings of AA from S&P and AA+ from Fitch.
Resignation To Impact Ecuador Debt Plans
The departure of Ecuador’s finance minister Fausto Ortiz de la Cadena, announced yesterday, could jeopardize the country’s debt service obligations, say analysts. “Ortiz was the most pragmatic and market friendly voice within the Correa administration and a defender of the importance of preserving market mechanisms,” says Goldman. “The departure reduces the probability that the government will retire some of the expensive global bonds and increases the risk [that it will] pursue market unfriendly measures on external debt,” according to the shop’s research analysts. “We are taking into the account all the uncertainty in terms of the willingness of the government to service debt obligations,” says Erich Arispe, an analyst with Fitch. “For us, the change in ministers could mean a change in policy, but with Ecuador, uncertainty is always an issue,” adds Arispe. Fitch rates Ecuador CCC. Recent reports suggested Ortiz would help oversee refinancing transactions in the local and international markets through 2009. But local bankers now say that’s much less likely under Ortiz’s replacement, Wilma Salgado, who was sworn in yesterday.
ISA Seeks Bridge, Bonds for Peru Project
Colombia’s state-owned Interconexion Electrica (ISA) is shopping around for banks to provide a bridge loan while it studies options to finance the construction of a dual transmission line it recently won a concession for in Peru. On June 17, ISA won the concession to build two 500KV lines from Chilca, in the south of Lima to Zapallal, 100km to the north. The cost is estimated at $125m. “We are looking at different options, but we will likely do a bridge loan before issuing bonds in Peru for the project,” ISA CEO Luis Fernando Alarcon tells Latin Finance. The first transmission line, which will initially transmit 200KV, has to be built in 20 months, the second in 30 months. ISA is the largest electricity transmission company in Peru, with more than 7,000km of power lines. In its native Colombia, ISA is studying the possibility of entering the highway business and possibly the natural gas sector down the road. It is seriously studying a bid for the Colombian government’s Ruta del Sol project, says Alarcon.
IFC Takes 10% in Colombia Chemical Outfit
The IFC has paid $25m for a 10% equity stake in Colombia’s health and chemical products manufacturing and distribution firm Tecnoquimicas, according to the multilateral. The funds will support the expansion of the company’s operations in the Andean region and Central America, says IFC. “The investment will also help the company increase the supply of affordable and high-quality medicines in these regions,” adds the multilateral. IFC recently bought an equity stake in Panama’s Grupo Mundial for $15.6m, increasing its position in the company to 9.9%.
Peru LNG Eyes Local Long Bond
Peru LNG, the LNG regasification project being built by Hunt Oil, is planning to issue $200m-$300m-equivalent in local bonds in Peru by year end. The tenor is likely to be 18 years and pricing will come at a spread over Libor, says a banker close to the process. The issuer is also considering dividing the issue into different tranches to offer shorter-dated paper to suit small investors. Among the possibilities being considered is a smaller amount of roughly $50m in 5-year notes aimed at retail buysiders, with the remainder carrying the full 18-year final maturity and a 5-year grace period. The project doesn’t need the local portion given the success in placing more than $1bn in bank and multilateral debt, notes one banker. But he adds it is important to offer a stake in a project of such national importance to the local buyside. Banco de Credito del Peru will assume a co-lead role in an eventual offering, with a second co-lead to be named as early as this week.