Mexico Retail Properties (MRP), a unit of US-based private equity manager Black Creek, has sold MXP5bn ($390m) in certificados de capital de desarrollo (CCD) in Mexico’s domestic market, according to regulatory documents. The 2027 certificates offer investors participation in a fund investing in commercial and service-related real estate assets throughout the country. The return structure is similar to other CCDs, with investors receiving their original amount plus a preferred return, with remaining proceeds divided 80% to investors and 20% to managers. Banamex and BBVA Bancomer managed the transaction. MRP’s sister unit I Cuadrada closed a MXP2.74bn social infrastructure-focused CCD in December, in which MRP co-invested 10%.
Category: Structured Finance
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IFC Eyes Stake in Brazil Pharma
The World Bank’s International Finance Corporation (IFC) is considering a $50m investment in pharmaceutical retailer Brazil Pharma, it says. The investment would be a combination of an acquisition of the company’s equity and an IFC loan, according to a proposed investment summary. A spokeswoman for Brazil Pharma says the deal would help fund the company’s growth, but notes that the exact investment details still remain under discussion. A spokeswoman at the IFC did not return a call for comment. The Brazilian company currently has a presence in over 13 states, out of 27 in the South American country and it is in the process of expanding its reach. In early February, the company acquired Sant’Ana Drogaria Farmacias for a BRL495.7m ($288.3m) price tag.
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Fovissste Prices RMBS
Mexican government housing agency Fovissste has sold MXP4.06bn ($317m) in domestic inflation-linked bonds backed by mortgage loans. The 2041 notes with a 5.4-year average life pay 4.65% and were priced at UDIbonos +263bp, inside 4.70% guidance, and 5bp wide to Infonavit’s MXP3.1bn UDI-denominated RMBS priced at 4.60% earlier this month. The transaction was heard 1.4x subscribed with Afores, pension funds, insurance companies and private banking accounts participating. BBVA Bancomer managed the transaction, rated AAA on a national scale. The government-backed lender got 4.60%, or UDIbonos+283bp, on its previous deal, a 30-year MXP4.309bn sale, priced in December.
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Magnesita Targets $200m Perp
Brazil’s Magnesita Refratarios is planning a $200m size for its perpetual NC5 bond, according to a report from Fitch assigning a BB rating. The refractory metal producer is scheduled to finish a 3-continent roadshow Thursday. Barclays, Citi, Deutsche Bank and Itau are managing the process.
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Vitro Issues CLN Notes
Vitro has issued credit-linked securities (CLNs) to creditors in compliance of its obligations under a February 3 restructuring agreement approved by Mexico’s Fourth District Court, it says. The CLN securities are issued by trusts and linked to Vitro’s new 8.0% notes due 2018, 12% mandatory convertible debentures (MCDs) due 2015 – which are mandatorily convertible into 20% of Vitro’s equity if not paid in full at maturity. Banco Invex, Institucion de Banca Multiple, Invex Grupo Financiero are the trustees, which in turn will issue the CLNs to creditors. The glassmaker also announced it paid its restructuring fees. The company’s restructuring proposal includes $814.7m in new bonds, a fee of up to $32.7m and mandatory convertible debt of $95.8m. The CLNs and restructuring fee payment involve the substitution and termination of previous obligations, instruments, securities agreements and guarantees under which the recognized credits in Vitro’s Concurso Mercantil, it adds.
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Fibra Uno Reopens for $700m
Mexico’s Fibra Uno has priced a MXP8.88bn ($699m) reopening of its domestic real estate income trust, known as a Fibra. The fund sold 325m new shares at MXP23.75 each, for an MXP8.88bn size, assuming the exercise of a 15% greenshoe. The price represents a 3.1% discount to Wednesday’s MXP24.50 closing. The sale raises funds for Fibra Uno, the only Fibra launched since the creation of the asset class, to acquire new properties. The retap may be a good sign for the Fibra market, bankers say, as it raised substantially more than the MXP3.17bn IPO held last year. Santander and BBVA were global coordinators, with Credit Suisse also on an international 144a/RegS portion and Protego and Actinver on a domestic portion. In January, Fibra Uno – put together by a group of property owners led by CEO Andre El-Mann – agreed with real estate investor MexFund to acquire up to 23 properties in exchange for shares in the Fibra, allowing the total portfolio to reach as many as 40 properties. Starting with 16 at the time of the IPO, Fibra Uno added a 17th last year, and counts on MXP3.6bn in revolvers to help fund acquisitions. Its assets include industrial, commercial, office, and mixed-use properties located throughout Mexico.
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China, IDB to Create Investment Fund
China’s Export-Import Bank and the Inter-American Development Bank plan to start a $1bn fund to invest in LatAm, the IDB says. The fund, expected to start operations this year, will start with $150m from each party, and the 2 banks are currently selecting asset management firms to manage the investments and raise funds from the markets.
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HSBC Brasil Head Swaps Banks
Conrado Engel has resigned as CEO of HSBC Brasil, HSBC says, and will join Santander Brasil as vp of retail operations, according to local press reports. Engel has been CEO since 2009, and will remain as an advisor to HSBC until the end of the month. HSBC does not disclose the reason for Engel’s departure, but says it has started the search for his successor.
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IFC Sees More Strategic Plays
There should be more opportunities for IFC equity investments in LatAm M&A transactions, especially regional companies expanding cross border, an official tells LatinFinance. The multilateral lender took a $200m stake in Grupo Suramericana to help the Colombian financial group purchase ING’s pension assets last year, and is open to other similar opportunities going forward. “Sura is a regional player looking to become a pension operator across countries, something that governments need. They are in the region to stay, and not going anywhere. We have seen the emergence of these kinds of companies,” Giri Jadeja, the IFC’s senior manager for LatAm and the Caribbean, says. The IFC has a position in Colombia Davivienda, another regional player expanding across borders, and potentially expanding banking to a greater portion of the population. “We are very encouraged by this and therefore we have made a change in our strategy and are looking to support [such companies],” he adds, noting that there could be other opportunities as more Europeans consider strategic exits from the region.
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Optimism Heading into IDB Weekend
There is a positive feeling among those headed to the annual Inter-American Development Bank meetings this weekend in Montevideo, particularly compared with the negativity at year-end 2011. The recent approval of a liquidity facility in Europe and positive US economic news has investors, bankers and economists optimistic about LatAm assets going forward, though there is concern about the stability of the recent rally. “There has been a very important change in the mood of investors from Q4 2011 to Q1 2012. Today, you are seeing investors become much more comfortable taking risks,” Pablo Goldberg, Head of Global EM Research at HSBC, tells LatinFinance. Talk has shifted from possible collapse to worries that EM assets have rallied too much too quickly, he explains. The key question ahead is if the positive signs will continue to appear. The 2 things the region needs to see going forward are continued good news from abroad, and no surprises – such as inflation or oil price spikes – that could shut off liquidity taps, Goldberg says. “There are not many concerns out there, and that is why we have seen a rally in the market lately. Now that Greece is out of the way with Europe having enough liquidity, there shouldn’t be any issues for the next couple of years. Also the US is growing,” says a New York DCM banker. The sovereigns in attendance this weekend have found available market conditions this year, as have the region’s blue-chip corporates. “The fact that [global growth and European debt] risks have been reduced at the margin has fostered better market dynamics,” Alejandro Diaz de Leon, Mexico’s director of public credit, tells LatinFinance. The extent of the US recovery remains to be seen, he notes, part of the reason why his government has pulled the trigger twice this year to raise $4bn, rather than waiting. The sustainable success of lower rated and more complicated transactions – such as General Shopping’s hybrid perp this week and an upcoming drillship financing