Banco Cruzeiro do Sul plans to begin a non-deal road show Friday to gauge demand for a bond issue. The trip will visit the US, Europe and Asia before wrapping up June 26. The Brazilian mid-sized bank has already tapped the dollar market this year, but is now hoping to introduce itself to a different segment of the market, targeting institutional accounts rather than the retail and private banking buyside, according to an official with knowledge of the process. BCP and UBS are managing the operation. The pair ran the books on Cruzerio do Sul’s $110m 2010 bond in April, which priced to yield 7.5%.
Category: Regions
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Korea and Bolivia in Mining JV
Korean state owned mining company Korean Resource has signed an agreement with the Bolivian mining corporation Comibol to establish a $200m joint venture to exploit the Corocoro copper mine in Pacajes, province of La Paz, the Bolivian government says. The agreement provides for a further $10m investment in exploration. The partners expect to extract between 30,000 and 50,000 tons of copper per year at Corocoro.
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India’s JKTyre Bags Mexico’s Llantas Tornel
Indian tire manufacturer JKTyre has purchased Mexican tire and rim company Llantas Tornel for $67m, the Mexican company says. The company plans to keep the Tornel brand and also launch the JKTyre brand all over the Americas, Raul Tornel, public relations manager for Llantas Tornel says. The current executive team will continue at the helm of the Mexican company, Tornel says, with support from executives from the Indian parent company.
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JPM Cuts Peru, Colombia Debt Technicals
An increase in local markets exposure and reduction in cash balances has prompted JPMorgan to cut its assessment of external EM debt technicals to positive from very positive. It dropped Peru to negative from neutral as investors sharply hiked exposure. “Peru spreads trade well inside their current credit rating, reflecting strong expectations of an imminent upgrade to IG by a second agency (Fitch already rates them BBB-), but with Peru’s weight in IG indices significantly smaller than for Brazil, should they qualify, the arguments for forced buying of Peru to minimize tracking error are weaker,” says the shop. It revised Colombia technicals to negative from neutral as exposures continue rising, while Venezuela was chopped to neutral from positive. JPMorgan adds that the remaining $18bn in scheduled sovereign debt issuance will be met by index cashflows of a similar magnitude. According to JPMorgan, inflows for the past month totaled under $1bn, the bulk of which was invested in local markets. It estimates year-to-date inflows into EM FX and fixed income from strategic and retail sources at $9bn. JPM also revised its full year 2008 inflow forecast to $30bn from $40bn. “External debt inflows have disappointed thus far this year, and outright outflows were even seen in retail external debt mutual funds. However, we remain optimistic on inflows into local markets,” says the shop.
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Chile’s Ripley Prepares Bond
Chilean department store retailer Ripley plans to issue up to COP70.55bn in bonds. The C series bonds will have a maximum tenor of 30 years and be denominated in the UF inflation-indexed unit. The exact amount and timing will be announced at a later date. Proceeds will be used to refinance debt.
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Spain’s Acciona Wins Campeche XXI Bid
Spanish developer Acciona has won the bid to build the expansion of the Campeche XXI convention center in San Juan de Campeche, southeastern Mexico. Acciona says it will invest MXP220m in the expansion of the building. The project features electrical and sanitation facilities for the complex, as well as rooms for data and voice recording.
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Moody’s Downgrades Tonala
Moody’s has chopped the issuer ratings of the Mexican municipality of Tonala to Baa1 on the local scale and B1 on the global scale. The rating change was prompted by a continued deterioration in financial performance over the last few years, the agency says. This has translated into large borrowing requirements and tighter liquidity levels. “The new ratings also take into account the absence of major contingent liabilities, as well as the municipality’s narrow economic base and large infrastructure needs,” Moody’s adds. The outlook incorporates a low likelihood that the involvement of some municipal officials in a corruption case will directly affect the municipality’s credit.
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Jamaica Places $350m Bond
In a long-anticipated return to the market, Jamaica has priced $350m in 2019 bonds with an 8.000% coupon at 97.498 to yield 8.375%, or UST plus 417bp. Guidance was 8.250%-8.375%. Principal will be repaid in three equal installments in 2017, 2018 and 2019. The B/B1 issuer had hinted at a tap when it went on a “non-deal” roadshow in February. Proceeds are for general budgetary purposes, with the EUR200m due next February. The plan is to raise about $600m this year in international capital markets to meet financing needs, says Darlene Morrison, acting finance secretary. Finance minister Audley Shaw told LatinFinance last week the sovereign would be considering all its options to get pricing at 8% or under. Deutsche Bank and Morgan Stanley, which took Jamaica on the February roadshow, managed the offer.
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Fitch Turns Negative on Sanluis
Fitch has put Mexico’s B minus rated Sanluis on rating watch negative owing to a weak liquidity position. The firm had $23.2m of cash and marketable securities on its balance sheet at the end of March 31 and is also susceptible to deterioration in the US auto industry, particularly light truck vehicles. “Cash-on-hand plus cash flow generation may be insufficient to continue amortizing debt in the near-term,” says Fitch. Amortizing debt for the next three fiscal year consist of $35m in 2008 (full year), $36m in 2009, and $93m in 2010. “Difficult credit market conditions, beyond management’s control, have delayed the company’s ability to complete a bond offering announced in October of 2007, which has been put on hold awaiting credit market improvement. However, financial performance deterioration in 2008 may complicate the company’s ability to refinance its debt,” says Fitch. It expects to resolve the review in the next 3-6 months. Sanluis is the world’s largest producer of leaf springs, supplying GM, Ford and Chrysler. It operates in the US, Mexico, and Brazil.
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Venezuelan Fertilizer Company Buys Bolivia’s Gravetal
Colombia-based Monomeros Colombo Venezolanos, a fertilizer and chemicals company owned by Venezuela’s state-own petrochems firm Pequiven, has purchased 77.5% of Bolivian soy processor Gravetal. Terms of the transaction were not disclosed. Santa Cruz-based Gravetal produces crude soybean oil and other soy-based products.