An eerie silence about Guatemala’s Banco Industrial’s 2068 hybrid Tier-1 capital issue leaves bankers at competing shops assuming the worst. The exact amount of the Ba3/B+ rated Reg S issue was not specified, but a size of $30m was rumored to have placed with locals, well shy of the $100m expected. A coupon in the low 9% area was expected for the first 10 years, after which the interest floats at fixed spread above Libor. Despite captive demand from Guatemalan investors, pricing may have been aggressive for such a complicated structure. Last week in Europe, Natixis placed $750m in A1/A+ perpetual Tier-1 notes at 10%. Guidance was 9%-10% for the fixed portion of the Industrial issue. Credit Suisse is managing the transaction. Neither bankers on the deal nor the issuer answered requests for comment.
Category: Regions
Mexican PE Fund Buys Education Company
Mexico-based private equity shop Nexxus Capital has acquired a 60% stake in private education provider Harmon Hall Holding. The purchase, made through the Nexxus Capital private equity fund III, cost between $25m-$30m, Roberto Terrazas, a director at the fund, tells LatinFinance. Harmon Hall specializes in teaching English in Mexico, with 105 language schools around the country. Nexxus focuses on sectors including health, education, tourism, services and housing, Terrazas adds.
Fitch Upgrades Vitro Following Refi
Fitch has upgraded the national scale ratings of Mexican glassmaker Vitro to BBB minus (mex) from BB+(mex). The agency affirms Vitro’s foreign currency debt ratings at B, and its senior unsecured notes due 2012, 2013 and 2017 at B+. The outlook is stable for all ratings, which cover approximately $1.2bn in debt. Vitro’s ratings reflect the company’s improved financial profile and capital structure after a refinancing process completed at the beginning of 2007. That consisted of a sale of $1bn in senior unsecured notes in two tranches: $300m and $700m with final maturities of 2012 and 2017. With this deal, Vitro mitigates short-term refinancing and liquidity risks, while also eliminating structural subordination following the take out of secured operating subsidiary debt, says Fitch.
Caribbean Seen Reliant on Investment
Caribbean countries will depend on their ability to maintain a high level of investment as they enter the hurricane season amid a global economic downturn that could hurt tourism and remittance flows, according to S&P. The sustainability of both domestic and foreign investment is especially important because exports, the other main driving force for GDP growth, are becoming more vulnerable to the negative external environment, says the agency. “Overall, we expect the commitment to fiscal consolidation to prevail, increasing policymaking transparency to boost investor support, and a timely monetary response to help maintain stability in the exchange market,” says S&P. All this should afford the small and open Caribbean economies “adequate protection against the rising winds from the North,” notes S&P, referring to hurricanes and economic turbulence.
InterGen Launches $310m Mexico Financing
Power generator InterGen has launched a $310m debt package to support its purchase of two plants in Mexico from Canadian utility TransAlta. A $210m 14-year term loan is priced at 135bp stepping up to 160bp over the life of the loan, as is a $100m 5-year revolver. The Massachusetts-based generator bought a 511MW portfolio consisting of the 252MW Campeche facility at Palizada in the Yucatan Peninsula and 259MW Chihuahua in Juarez. Both have 25-year PPAs with state utility CFE. Calyon, WestLB and Export Development Canada are the MLAs.
Banco Industrial Awaits Hybrid Issue
Guatemala’s Banco Industrial was expected to price late last week a 2068 hybrid issue to provide it with Tier-1 capital. The exact amount of the Ba3/B+ rated issue was not specified. Guidance had been given at 9%-10% for the fixed portion of the securities, which after 2018 switch to a rate floating above Libor. Credit Suisse is managing the transaction.
Sare CFO Baz Returns
Alberto Baz has returned as CFO of Sare Holding has after a one-year leave of absence, the Mexican homebuilder said. Baz, who previously served as CFO for five years, will resume his duties May 1. Fernando Solis, who served as interim CFO during Baz’s personal leave of absence, will lead the Sare’s new institutional relations department.
Mexico State Loans Upgraded
Moody’s upgraded eight of the State of Mexico’s outstanding loans to Aa2 from Aa3 on a national scale. The agency also assigned Aa1 national-scale ratings to ten new loans to be included in the state’s loan trust. The action comes as the state is wrapping up a MXP27bn debt refinance. The amortizing deal in 20, 25 and 30-year tranches, with roughly a third of the amount in each, has an average duration of 12.5 years and a weighted average spread is 48bp over 28-day TIIE. For the first time, government development bank Banobras provided a first loss guarantee, for 27% of the deal. The final phase of the transaction is expected to close May 2 and involves long-term swaps of floating to fixed rate MXP.
Guatemalan Hybrids Expected to Price
Guatemala’s Banco Industrial is expected to price an issue of Tier 1 hybrid securities as soon as today. Guidance of 9-10% was put out earlier this week for the 60-year notes. The issue is rated B+ by Fitch and Ba3 by Moody’s, both of whom expect to assign the equity credit to the notes. Credit Suisse is managing the sale.
Mexican Lender Taps IFC for Funds
The IFC has agreed to provide a $40m equivalent peso revolver to Hipotecaria Vertice, and take a $6m 15% equity stake in the Mexican mortgage lender. “The new facility allows us to have more competitive products and rates,” Samuel Suchowiecky, CEO of Vertice, tells LatinFinance. He explains that Vertice is about to roll out products targeting specific niches among low and middle-income borrowers. Vertice’s goal is to reach 3,000 mortgages worth $90m-$120m this year, he says. The lender had a MXP500m construction bridge loan securitization last year issued from a MXP2bn shelf, and plans to place another in the next few months. By early 2009, Vertice expects its first RMBS issue says Suchowiecky.