Banco de Crédito del Peru has priced a $160m 2022 NC10 sol-denominated subordinated bond issue at par to yield 7.17%, or 85bp over the sovereign. Morgan Stanley was the lead on the Baa3/BB+ issue.
Category: Regions
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Guidance Emerges on KUO Bond
Mexico’s Grupo KUO, a maker of auto parts, plastics and canned foods formerly known as DESC, is expected to price Wednesday a $200m 2017 offering. Guidance is for a 10% coupon, following a US and European road show last week. Citi and Credit Suisse are joint bookrunners on the offering, rated BB- by Fitch and S&P.
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Peru Leaves Rate Unchanged at 5.0%
Peru has left the reference interest rate unchanged at 5.0% in its monthly monetary policy meeting held last week, following an inflation hike it views as transitory. “It is more likely than not (probability of more than 50%) that the central bank will raise the reference interest rate by another 25bp (to 5.25%) before year-end,” says Goldman Sachs.
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CentAm Debt Performs Strongly in September: Bear Stearns
Central America and Caribbean sovereign debt performed very strongly in September, says Bear Stearns. The shop’s BSCAX index of those regions returned 2.44% last month, slightly more than the 2.14% rise in global sovereign debt. “Belize, El Salvador and Panama outperformed the market, while Costa Rica, Grenada, T&T, Barbados and Bahamas underperformed,” says Bear. In mid-yielding credits, the shop says the Dominican Republic 2011 bonds look cheap to their CentAm peers. “These bonds have widened relative to Guatemala ’11s, for example, but also versus El Salvador and Costa Rica. Moreover, the DR ’11s are two years shorter in average life,” says Bear.
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IMF Approves $111m Nicaragua Loan
The IMF has approved a loan worth about $111.3m under the Poverty Reduction and Growth Facility (PRGF) to support Nicaragua’s economic program. It will result in an immediate disbursement of approximately $18.5m. PRGF loans carry an annual interest rate of 0.5% percent and are repayable over 10 years with a 5.5–year grace period on principal payments. “Nicaragua has made important strides over the last years. Macroeconomic stability has been strengthened, vulnerabilities reduced, and poverty-reduction spending expanded, while important progress has been made with structural reforms,” says IMF deputy MD Murilo Portugal.
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Banks Close Panamanian Power Plant Bond financing
WestLB and Banco General have closed on a $175m local public bond issue supporting the conversion of the Bahia Las Minas plant owned by Suez Tractebel and the Panamanian government. The transaction, consisting of a $100m 2020 tranche and a $75m 2022 tranche, is thought to be the first of its kind in the Panamanian bond market and the first of its type under New York law. It was done this way to access the liquidity of the local market while still allowing the participation of foreign lenders, according to bankers on the deal. The 245 megawatt fuel oil-fired plant in Colon will be converted to run on coal.
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Belize’s BB Holdings Places Notes with Chairman
BB Holdings, a financial services company operating in Belize, Turks and Caicos Islands and the Caribbean, has placed $50m in 10% series 2 fixed rate, unsecured, loan notes with a maturity date of November 2, 2014. It also issued 1.1m warrants to subscribe for new ordinary shares of the company at an exercise price of $6.50 until August 2 2014. The notes and warrants were offered to certain existing non-US shareholders in BB Holdings Limited. UK businessman Michael Ashcroft – BB Holdings’ chairman – bought $37.9m of the notes and 8.4m warrants and underwrote the rest of the deal. BB Holdings is actively pursuing a strategy to increase its US dollar denominated earnings in the Caribbean region and in particular in the Turks and Caicos Islands where the directors consider that there are significant opportunities. Proceeds are to capitalize The Belize Bank (Turks and Caicos) to fund lending principally in the tourism and property development sectors.
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Mexico’s SHF Leads $16bn Financing Push
Sociedad Hipotecaria Federal, the Mexican government’s mortgage market development arm, is heading a new effort to help local governments and developers raise an estimated $16bn in capital market and loan financing for housing infrastructure. Speaking on the sidelines of a Moody’s structured finance conference, Paloma Silva, adjunct director at SHF, says a pilot project is currently underway in four cities and municipalities in Mexico that is expected to yield $1.7bn in project-financing-type deals. Proceeds will be used to build houses in places like Tijuana, Michoacan, Yucatan and San Luis de Potosí. Among the financing structures being considered are bonds with durations of 1-5 years with partial guarantees provided by SHF and Banobras, syndicated loans, and PPPs. Bond deals and securitizations would initially come in the $100m-$150m range, moving up to the $300m area. The first deals from the pilot project should surface in early 2008, says Silva.
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Zoltek Buys Cydsa Plant
Zoltek Companies, the US carbon fiber producer, is paying $100m to buy and revamp the Guadalajara-based Crysel acrylic fiber manufacturing assets of Mexico’s Cydsa. Zoltek plans to retool and modify the facility to supply its US operations with low-cost precursor, the principal raw material used in manufacturing carbon fibers. “Zoltek expects the facility will serve as a site for additional carbon fiber production lines supporting Zoltek’s strategic goal of achieving $500m in annual sales of its high-performance commercial grade carbon fibers by fiscal year 2011,” says the acquiror. Zoltek is using a portion of the proceeds of an August secondary common stock offering, along with cash from operations, to fund the investment. It expects precursor production to begin by the end of fiscal 2008.
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Jamaica Retaps 2039 for $150m
Jamaica reopened its 8% of 2039 bonds Wednesday for $150m, the first transaction from the new administration in the B1/B/B+ rated Caribbean nation. The notes were priced at 97.5 to yield 8.224%, or 341.2bp over the 2037 US Treasury note. The bond, originally offered in March for $350m to yield 8.125%, amortizes equally in the last three years. Deutsche Bank led.