Offers from 8 companies have prequalified to compete for 14 oil and natural gas blocks in Peru, says state oil contracting agency Perupetro. The investment needed to develop the blocks is estimated at $700m over the next 7 years, Perupetro says. The bidders are Argentina’s Tecpetrol, Colombia’s Ecopetrol, a consortium of Repsol, Ecopetrol and YPF, a consortium of YPF and Petrouruguay, UK-based Pitkin Petroleum and Sinochem unit Emerald Energy.
Category: Peru
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Lima Bolsa Set to Catch Fish IPO
Peruvian fishery Pesquera Exalmar is preparing to IPO in Lima, targeting an October 28 float. If successful, the deal would be the first Peru IPO since Interbank holdco Intergroup sold shares in 2007. Exalmar plans to sell 57.5m primary units and 54.4m secondary locally, as well as 119.9m primary shares internationally. The issuer does not indicate a value or price range, though says the sale should raise more than $100m when referring to proceeds in the prospectus. Proceeds are marked for repaying debt from recent acquisitions, buying boats, and expanding the footprint in Peru’s southern coast. The fishmeal and fish oil producer would be the second of Peru’s fisheries to go public, after Copeinca. Exalmar had gross income of $37.48m in 2009 and $47.43m in 2008, according to its prospectus. Santander, Citi and Interbank are managing the sale.
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Peru Surprises With No Change
Contrary to market expectations, Peru’s central bank left its monetary policy rate unchanged at 3.00%, citing a small drop in inflation. Morgan Stanley forecast it would tighten by 25bp to 3.25%, a lower hike than the 50bp increase seen in August and September, due to low inflation, which is around 2.0%. Barclays also expected a 25bp hike, with the rate ending at 3.5% by the end of the year. Bank of America Merrill Lynch expected the bank to continue the trend with a 50bp hike.
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Peru Rate Hike Expected
Peru’s central bank is expected to tighten its monetary policy rate today. Morgan Stanley forecasts it will hike 25bp to 3.25%, less than the 50bp increase seen in August and September, due to low inflation. Barclays also expects a 225bp hike, with the rate ending at 3.5% by the end of the year. Bank of America Merrill Lynch meanwhile predicts a 50bp hike. It expects Peru to end the year at 4.25%.
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BBVA Continental Pays For Step Up
BBVA Continental boosted its Tier 1 capital with a $200m 2040 NC10 step-up issue. The Peruvian unit of the Spanish global bank drew about $1bn in orders, according to bankers on it. The deal landed at par with a 7.375% coupon to yield the tight end of 7.500% area guidance. After the 10-year no-call period, the bond pays a floating rate of Libor plus 680.2bp. The bond was heard up 2 points in the aftermarket Thursday, following talk in the market that it was coming cheap. Pricing falls between the roughly 7.0% yield of BCP’s hybrid step-up and the 7.5% level of Interbank’s hybrid, according to a New York-based EM investor looking at the deal, adding that a price comparison is tricky, as the secondary is not very liquid. Continental is expected to use proceeds for general corporate purposes and to strengthen its balance sheet. The bond makes use of a loan participation note structure to avoid a withholding tax. BBVA and Credit Suisse managed the sale, rated BB/BBB minus.
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Interbank Nets $400m
Peru’s interbank has priced $400m in new 2020 bonds, as investors showed continued enthusiasm for ex-Brazil banks by placing about $2bn in orders. The nation’s third largest bank priced at 99.820 with a 5.750% coupon to yield 5.774%, or UST plus 325bp, the tight end of 337.5bp area guidance. “It offers a fair concession to BCP,” says a participating North American EM debt portfolio manager, who spots the pickup at about 50bp to the much larger Banco de Credito del Peru. The bond was trading up about 0.5 points Thursday afternoon, according to a trader. BCP had raised $800m in 2020s this month. Bank of America Merrill Lynch and JPMorgan managed the sale, rated Baa3/BB+/BBB minus. It was Interbank’s first bond since a $250m in new 2070 hybrid NC10 bond in April.
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BBVA Continental Expected Today
BBVA Continental expects to price a $200m 2040 NC10 today, according to a banker on it. Official guidance is 7.5% on the BB/BBB minus trade. “It seems cheap if you compare it to other bank issues,” says a potential participant. The Peruvian bank is expected to use proceeds for general corporate purposes and to strengthen its balance sheet. A banker away from the deal says the issue is part of a larger trend among Peruvian banks in the wake of stricter dollar reserve requirements. Earlier this month, Peru’s central bank mandated an increase in reserves for foreign short-term borrowings, to 75% from 65%. BBVA and Credit Suisse are the leads.
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Interbank Coming Wide to BCP
Peru’s Interbank is expected to price toward the wide end of an expected 30bp-50bp over Banco de Credito del Peru’s recent issuance, according to a banker away from the deal, for a low to mid 300bp area spread over UST. BCP, Peru’s largest bank, sold $800m in new 2020 notes, earlier in the month. The BBB/Baa2 deal priced at 99.763 with a 5.375% coupon to yield 5.406%, or UST plus 265bp. Interbank’s 10-year $400m bond is rated Baa3 and coming through JPMorgan and BAML. The banker says that, like BBVA Continental, Interbank is raising dollars in response to the central bank of Peru’s increased foreign currency reserve requirements.
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Interbank Preps Bond Issue
Peru’s interbank is preparing a new 10-year bond at up to $400m, hoping to capitalize on bullishness that greeted rival Banco de Credito del Peru earlier this month. The bank will start in London Monday, and visit Boston before finishing in Los Angeles and New York Wednesday. Bank of America Merrill Lynch (BAML) and JPMorgan have joint books. The deal is rated Baa3. BBB/BBB minus BCP priced an $800m 2020 bond 2 weeks ago through BAML and Deutsche Bank. It came at 99.763 with a 5.375% coupon to yield 5.406%, or UST plus 265bp, the tight end of 275bp-area guidance.
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Peru Taps New Finance Minister
Peruvian president Alan Garcia has named Ismael Benavides as the country’s new finance minister after the resignation of Mercedes Araoz. The appointment of the former agriculture minister and banker comes in the midst of a cabinet reshuffle, according to government information, which also mentions that several of the ministers that have stepped down will run for office in the next elections. In addition to naming a new finance minister, Garcia also appointed Jose Chang as prime minister and education minister, Rosario Fernandez as justice minister, Fernando Barrios as interior minister, Rafael Quevedo as agriculture minister, Jose Villasante as production minister, Virginia Borra as minister for women and social development and Eduardo Ferreyros as minister for foreign trade and tourism.