Moody’s has placed the ratings of enhanced loans of 6 Mexican states under review for possible downgrade. The affected loans are the state of Guerrero’s Baa2 rated MXP250m loan from BBVA-Bancomer, Nayarit’s Baa1 rated MXP300m loan from Banorte, Quintana Roo’s Baa2 rated MXP300m loan from Banamex, Tabasco’s Baa2 rated MXP3bn loan from Banorte and MXP2.4bn in bonds from Baa1-rated Nuevo Leon.
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ICA Heard Shying from Perp
Mexico’s ICA has decided to issue a 10-year bond instead of a perpetual, according to investors following the deal. The builder had been on the road this week shopping a $300m-$400m perpetual bond looking for a 9%-10% yield, but is heard changing tack after tepid response. The deal is heard likely to price early next week, with the issuer heard still set to meet accounts today, aiming for perhaps 8%. BAML, Morgan Stanley and Santander are leads on the deal. ICA is rated Ba3/BB minus.
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Paraguay Bank Eyes $50m
BBVA Paraguay is planning to issue $50m in 3-year bonds in a Reg S-only deal, according to investors. The Ba3 rated bank is heard whispering 9.375% area yield indications. It is scheduled to meet investors through Tuesday. BBVA and Citi are managing the sale.
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BMG Plots Overseas BRL Bond
Banco BMG is preparing a cross-border BRL-denominated bond. The mandate was announced Thursday, investors say, though there did not seem to be immediate indications of size or maturity. BCP Securities and Bradesco are managing the issue. Mid-sized payroll discount specialist BMG is rated Ba2/BB minus.
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Bancomer Taps 3-Year MXP Sweet Spot
BBVA Bancomer on Thursday issued MXP5bn in 3-year bonds, in the first bond issue by a bank in the local Mexican market this year. The bonds priced at 20bp over TIIE, the tight end of 20bp-25bp guidance, according to a lead banker. Some investors had hoped the bonds would price as high as 35bp over TIIE. The book received MXP6.3bn of demand, from over 30 investors, adds the banker on the AAA rated self-led deal. Private banks, trading desks, pension funds and mutual funds participated in the deal. The proceeds will be used to increase the lending portfolio. The bank was considering 3-year or 5-year bonds. “We chose the 3-year tenor as it is the market sweet spot, attracting a range of types of investors,” adds the lead banker. Santander will today also look to issue up to MXP5bn in 3-year bonds, in a deal that is self-led, joint with Banamex. Investors expect the bonds to price in the 25bp over TIIE area.
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Interbank Acquires Inkafarma Chain
The Interbank Group has acquired Inkafarma, a Peruvian pharmacy chain, in a stock-swap transaction. Inkafarma says it has a 30% market share of the $1.1bn Peruvian pharmaceutical market. Although Interbank has not said how much it paid for the chain, local press reports estimated the deal value at $320m.
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E-CL Closes Equity Books
Chile’s Codelco has closed books on the sale of its 40% stake in power company E-CL, with the pricing set to be fixed this morning. The shares closed down 1.2% at CLP1,265.20 Thursday, which would imply a valuation of CLP536.4bn ($1.1bn) for the 424m shares state-owned miner Codelco holds. Investors and analysts expect strong demand for the asset, part of a set of planned privatizations included in the government’s earthquake reconstruction funding efforts. “There should be strong demand from local private and institutional investors and international investors, and they shouldn’t have a problem raising $1.1bn,” Tomas Gonzalez, equity analyst at Celfin tells LatinFinance. With plans for $1.5bn-$3.0bn in capex this year, it does not make sense for Codelco to hold on to its E-CL stake, he says, especially now that it has locked up a long-term power supply contract. France’s GDF Suez still holds a 52.4% stake in the power company, in addition to a 7.6% free float. Proceeds of the sale are marked for Codelco’s investment plans. LarrainVial and JPMorgan are managing the sale, which follows a 3-week roadshow.
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Adecoagro Pricing Drags into Night
Adecogaro was set to have fixed the price of its US IPO by this morning, expecting to raise more than $400m. The LatAm agricultural play is selling 21.4m primary and 7.1m secondary shares at $13-$15 each. The deal would raise $400m at the midpoint, and also may add a 4.3m share greenshoe. “There are many private vehicles making a play on Latin American farmland, but few public ones, and it is a positive sign that they are starting to list,” says Pedro Richards, an equities analyst covering agricultural companies at Raymond James Argentina. He notes Adecoagro offers the combination of a play on land valuation and a play on actual farming operations. Comparable listed companies include Brazil’s SLC Agricola, more of an operational play, and Argentina’s Cresud and Brazilian BrasilAgro, which are mostly land plays at this point, he says. The lack of publicly-traded agriculture plays and high prices drives investor interest, he adds. Other than price risk, Richards explains, legislation limiting foreign farmland ownership in Brazil, which limits the potential for acquisitions. As part of the operation, shareholder Al Gharrafa Investment Co, a unit of Qatar Holding, has agreed to buy $7.4m shares at $13.44 each, as long as the total IPO raises at least $400m. The largest shareholders, George Soros’ Pampas Humedas (34.0%) and HBK Investments (25.6%), expect to see their stakes reduced to 21.4% and 16.1%, respectively. Al Gharrafa holds 6.5%, and could see its holding grow to 11.2%. Credit Suisse, Morgan Stanley and Itau are global coordinators and joint bookrunners, with Deutsche as bookrunner. The Luxembourg-based farmland venture operates in Brazil, Argentina and Uruguay and is involved in farming, energy production and land development. It plans to use proceeds to fund construction of a sugar and ethanol mill in Brazil and expanding its farming business.
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Magnesita Delays FO Equity
Brazil’s Magnesita Refratorios has extended the bookbuilding period for its equity follow-on, according to a banker on the deal. The date has been moved February 11 from February 2, possibly to avoid next week’s equity glut. The producer of refractory materials used in the steel industry plans to sell 30m primary shares, which would raise BRL289m at Thursday’s BRL9.62 closing price. A 15% greenshoe is also possible. Magnesita is raising funds to pay off bank debt, it says, in order to receive better financing to fund expansion and improved vertical integration. Plans include a BRL220m investment to boost sintered magnesia production at its Brumado-Bahia facility and a BRL80m investment in its graphite mine. Itau is lead manager, with Credit Suisse as bookrunner.
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Time for Fun Files IPO
Brazilian entertainment company T4F Entretenimento is preparing an IPO, according to regulatory filings. The event promoter and ticket broker operating in Brazil, Chile and Argentina has not indicated the size of the offer or use of proceeds in its initial documents. The offer will include primary and secondary shares sold by controlling shareholder and CEO Fernando Luiz Alterio, Mexican entertainment operator CIE Internacional, and Gavea Investimentos’ GIF II fund. T4F, which stands for “time for fun” booked BRL95.1m in Ebitda in 2010, up from BRL46.1m in 2009. Credit Suisse is lead coordinator of the sale, with BTG and Bradesco as bookrunners.