Swiss-based commodity powerhouse Glencore International is seeking to raise $2bn-$3bn financing in the coming months to invest in Colombia’s Refinaria de Cartagena, says a loans market banker familiar with the matter. Part of the investment for the controlling stake in the oil refinery will include equity, and a significant portion will be raised in the loan market. A multilateral A/B loan may be one route, says a banker, though Glencore is understood to be considering various options. Glencore said in August it had acquired 51% of the oil refinery from Ecopetrol, which owns the remaining 49%, for $630m. It beat a $595m bid from Petrobras for the stake, according to press reports at the time.
Category: Regions
Posted inDaily Brief
Cemex Prices MXP2.5bn Issue, Femsa on Deck (1)
Mexican building materials provider Cemex priced late Friday a MXP2.5bn UDI-linked local bond issue in two tranches. A MXP2bn 2010 tranche priced at 3.9% and a MXP456m 2017 tranche priced at 4.4%. Despite demand for more, the issue was capped due to an increase in rates during the sale period, according to bankers on the deal. Cemex plans to repay short and long term debt with proceeds. HSBC was the sole bookrunner. Separately, Femsa is due Wednesday with a MXP6bn offering. A MXP2.5bn 2017 UDI-denominated tranche is being prepared by HSBC and Santander, while a MXP3.5bn 2013 floater is coming via BBVA and Scotia.
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Cemex Sells Two US Assets to CRH, Calls Off Wider Talks (1)
Mexico’s Cemex has sold concrete operations in Florida and Arizona to Irish construction materials firm CRH for $250m. The divestitures had been required by US regulators as a condition for authorizing Cemex’s acquisition of Australia’s Rinker. Cemex plans to use the money to pay down debt, which reached $19.2bn in Q3 as a result of the Rinker deal. The two announced negotiations in September for up to $4.5bn in US and European assets, but have called off talks for a wider transaction, citing disagreement over price. Cemex has not said whether it still plans to sell those additional assets.
Posted inDaily Brief
Enlace Hires Pershing for Mexico Clearing (1)
Enlace Int has hired Pershing, a subsidiary of The Bank of New York Mellon, to act as a principal clearing agent focused specifically on Mexican sovereign debt transactions. Enlace, a major inter-dealer broker in Mexico, will use Pershing’s PerNet Web-based middle office platform to monitor and reconcile accounts and trades. Pershing is a global provider of financial business solutions to more than 1,150 institutional and retail financial organizations and independent registered investment advisors.
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Challenges Ahead for LatAm (1)
LatAm appears to be in for a rougher 2008 than Asia or EEMEA, according to research from Merrill Lynch. “While our base case is one of decoupling from the US slowdown, we think that 2008 will be a more challenging year for Latin America,” says the shop. “The main challenges will stem from both a less favorable external environment and from inflation constraining policy domestically,” it adds. Risks include a slower US economy, potentially tighter credit conditions and softer commodity prices. “A further, albeit evolving, aspect here is how the effects of the weakening USD will play out in terms of global risk appetite and across the region’s competitiveness,” says Merrill. On the ground, LatAm is dogged by inflation, which limits expansionary fiscal policy and/or monetary easing. However, decoupling stands the region in good stead. “As domestic demand picks up and consolidates through stronger and deeper financial markets, the LatAm and US business cycles should remain less correlated than in the past. Also stronger public and corporate balance sheets make LatAm less dependent on foreign savings and, hence, on global credit swings,” says Merrill. It predicts investment grade Peru and Brazil in late 2008 and regional growth of 4.6% in 2008.
Posted inDaily Brief
Cemex Prices MXP2.5bn Issue, Femsa on Deck
Mexican building materials provider Cemex priced late Friday a MXP2.5bn UDI-linked local bond issue in two tranches. A MXP2bn 2010 tranche priced at 3.9% and a MXP456m 2017 tranche priced at 4.4%. Despite demand for more, the issue was capped due to an increase in rates during the sale period, according to bankers on the deal. Cemex plans to repay short and long term debt with proceeds. HSBC was the sole bookrunner. Separately, Femsa is due Wednesday with a MXP6bn offering. A MXP2.5bn 2017 UDI-denominated tranche is being prepared by HSBC and Santander, while a MXP3.5bn 2013 floater is coming via BBVA and Scotia.
Posted inDaily Brief
Cemex Sells Two US Assets to CRH, Calls Off Wider Talks
Mexico’s Cemex has sold concrete operations in Florida and Arizona to Irish construction materials firm CRH for $250m. The divestitures had been required by US regulators as a condition for authorizing Cemex’s acquisition of Australia’s Rinker. Cemex plans to use the money to pay down debt, which reached $19.2bn in Q3 as a result of the Rinker deal. The two announced negotiations in September for up to $4.5bn in US and European assets, but have called off talks for a wider transaction, citing disagreement over price. Cemex has not said whether it still plans to sell those additional assets.
Posted inDaily Brief
Glencore Eyes Colombia Refinery Financing
Swiss-based commodity powerhouse Glencore International is seeking to raise $2bn-$3bn financing in the coming months to invest in Colombia’s Refinaria de Cartagena, says a loans market banker familiar with the matter. Part of the investment for the controlling stake in the oil refinery will include equity, and a significant portion will be raised in the loan market. A multilateral A/B loan may be one route, says a banker, though Glencore is understood to be considering various options. Glencore said in August it had acquired 51% of the oil refinery from Ecopetrol, which owns the remaining 49%, for $630m. It beat a $595m bid from Petrobras for the stake, according to press reports at the time.
Posted inDaily Brief
Enlace Hires Pershing for Mexico Clearing
Enlace Int has hired Pershing, a subsidiary of The Bank of New York Mellon, to act as a principal clearing agent focused specifically on Mexican sovereign debt transactions. Enlace, a major inter-dealer broker in Mexico, will use Pershing’s PerNet Web-based middle office platform to monitor and reconcile accounts and trades. Pershing is a global provider of financial business solutions to more than 1,150 institutional and retail financial organizations and independent registered investment advisors.
Posted inDaily Brief
S&P Abandons CIE Upgrade
S&P has affirmed the BB- long-term corporate credit rating on Mexico’s Corporacion Interamericana de Entretenimiento (CIE), as well as the B+ senior unsecured debt rating on its 2015 notes. It also removed the ratings from CreditWatch with positive implications, where they were put on August 17 after news of an MoU with Codere. The latter agreed to acquire a 49% interest in CIE Las Americas in exchange for Codere’s 50% interest in the existing gaming joint ventures within CIE Las Americas. The exchange with Codere resulted in a $175m cash payment from Codere to CIE. “The rating affirmation reflects our expectations that although CIE’s financial policy will continue to favor debt reduction, there is uncertainty regarding the timing and amounts of future debt reductions and particularly CIE’s discretion over the joint venture’s cash flows,” says S&P. “The affirmation also reflects our expectation that the new 20% tax on gaming that was recently approved by the Mexican Congress will have an impact on the company’s financial performance,” it adds.