Ferreyros Preps Bond Debut

Peruvian heavy machinery distributor Ferreyros is taking steps to issue a $100m-$200m 10-year bond this year, in what would be a debut in the international market. “All eyes are on Peru, rates are low and we want to take advantage of that,” CFO Patricia Gastelumendi tells LatinFinance. The Lima-based distributor for Caterpillar, Atlas, Copco and other brands is analyzing different options but would prefer to issue bonds by its holding company backed by guarantees from subsidiaries. Proceeds would be used to extend its debt maturity profile and could also be used to help finance a $75m agreement with CAT Global Mining for the purchase of the Bucyrus brand line of machinery and equipment. Gastelumendi says Ferreyros will consider 8 banks – both local and international – in its selection for two bookrunners, and expects to make advancements in the selection process by September. Prior to the bond, Ferreyros plans to complete a corporate reorganization in July, splitting its operations into automotive and machine units, both under a single hocldo. In February, Ferreyros raised PES170m ($63m) in an equity capital raise open to existing shareholders. It placed 73.36m shares at PES2.28 each, representing 98% of the 75m in the first round. It completed the second round in which it placed the addition 1.7% shortly thereafter. “A lot of investors want Ferreyros paper who didn’t participate in the shares placement. This would be an opportunity to invest in Ferreyros,” says Ferreyros Treasurer Liliana Montalvo. Ferreyros imports and sells machinery, engines, motor vehicles and parts and leases machinery and equipment and provides repair shop services under 8 subsidiaries. The company has reported net sales of $377.6m in the first quarter of 2012, up 25% from the same period last year.