Sugar Producer Targeting $400m

Guatemalan sugar producer and exporter Ingenio Magdalena is looking at a $400m bond transaction, according to Fitch, which assigns a BB minus rating. The debut issuer was scheduled to market a 5-10 year bond through today. No initial price talk had been issued as of late Wednesday. The issuer is raising funds to refinance existing debt and for general corporate purposes. The proposed bonds will have the guarantee of certain subsidiaries that represent approximately 94% of the company’s total assets and close to 100% of consolidated Ebitda, the agency says. Fitch notes a “solid position” in the sugar exporting and biomass power generation sectors, weighed down by presence in a cyclical industry and $136m capex needs in 2013-2015 that should mean negative free cash through 2014. Citi and JPMorgan are managing the BB minus/BB minus transaction.