The IDB has approved 3 loans totaling $170m for Jamaica to support private and public sector competitiveness and modernization. The loans are for a 20-year term, with a 5-year grace period, and carry a variable interest rate over Libor.
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S&P Upgrades Jamaica on Restructuring
S&P has raised Jamaica’s ratings to B minus from C with stable outlook following the country’s completion of its debt restructuring. The debt exchange, which the government launched on January 14 and concluded on February 24, affected roughly JAD700bn of domestic debt, or about 50% of Jamaica’s total public debt, S&P says. The government’s external debt was excluded from the transaction. The participation rate in the restructuring was 99.2% of eligible claims, with 100% of institutional investors participating, according to Peter Moses, country director at Citi, which managed the restructuring.
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US’s Sempra Clinches Mexico Gas Assets
Sempra Pipelines & Storage, a unit of San Diego-based Sempra Energy says it is acquiring the Mexican pipeline and gas infrastructure assets of Texas-based gas company El Paso for $300m. A spokesman says the deal will be financed with cash on hand. The acquisition involves El Paso’s wholly-owned natural gas pipeline and compression assets in Sonora. It also includes El Paso’s 50% interest in a joint venture with Pemex which operates 2 natural gas pipelines and a propane system in northern Mexico. The acquisition is expected to be accretive to Sempra Energy’s earnings by $0.05 per share in 2010 and $0.10 per share in 2011, the company says. The deal is expected to close in Q2. There were no financial advisors, according to the spokesman.
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Nexxus CCD Getting Close
Mexico’s Nexxus is close to wrapping up a Certificado de Capital de Desarollo deal with local investors. The close should be today or early next week, Luis Alberto Harvey, partner at Nexxus, tells LatinFinance. The total value of the 10-year deal is still in flux, though Harvey says it should be between MXP2bn-MXP3bn. The CCD is linked to a fund targeting a wide variety of Mexican assets. BofA-Merrill Lynch and Santander are managing the deal.
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ISA Brazil Clinches Early Consents
ISA Capital do Brasil says it has garnered an 81% participation in its plan to tender for $354m in 8.8% of 2017 bonds. The leading shareholder in Sao Paulo state transmission company CTEEP launched the deal February 8 and offered early bird participation through February 24. As of yesterday, it had agreed to buy back $287m of the senior notes with cash by offering $1,117.50 for each $1,000.00 in principal. The tender goes through March 8 and between now and then, the buyback offer is for $1,082.50 per $1,000.00 in bonds. HSBC is managing the process.
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Panama Fund Sells Down 2027 Holdings
Panama says the government-backed Fondo Fiduciario para el Desarrollo has sold off its holdings of sovereign-issued 8.875% coupon 2027 notes. The 2027 position went for $441m, having been acquired for $362m, it claims. The sale resulted in a capital gain of $78.2m for the fund, says the government in a statement. In December, the fund attempted to sell all of its global Panama bond holdings, which then amounted to $760m, but pulled the transaction after receiving low bids. The clumsy maneuver led RBS analysts to suggest Panama’s curve might become subject to a supply-risk premium. The fund’s strategy has been to purchase bonds in the open market at depressed levels and held them with an eye to resell them at higher values, says Panama.
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Colombia Auctions Hydrocarbon Blocks
Colombia’s national hydrocarbon agency, ANH, is on a roadshow to market 228 onshore and offshore hydrocarbon exploration blocks that will be awarded in June. Armando Zamora, ANH director, tells LatinFinance he expects about 40-50 of the blocks to be licensed, which could draw investment of $200m-$500m for exploration alone. Zamora expects average production of oil in Colombia to surpass 800,000 barrels per day this year, up from about 675,000 in 2009. The roadshow will stop in Canada, the UK, Spain, Brazil, Australia, Thailand and China.
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Scotiabank Trims DPR for Lower Spread
Peru’s Scotiabank has raised $175m in diversified payment rights (DPR) bonds in its first visit to the capital markets using the future flows structure, say executives familiar with the trade. The bank had launched at $200m, but opted to reduce size to secure attractive pricing, say bankers on it. Rating agencies had assigned their respective A/A minus scores for an up to $250m issuance. A $50m 7-year final fixed rate tranche came at 5.25% while a $125m floating rate piece with the same tenor came at Libor plus 275bp. The fixed rate piece was done to satisfy reverse inquiry from one investor, according to executives leading it. The average life of the bond, which is backed by financial flows, is 4.8 years. Proceeds are for balance sheet management and asset/liability matching. As such, the issuer is very price sensitive, says a banker on the deal. He adds distribution for the deal, which included a roadshow for the debut issuer, counted on a book with over 20 distinct entities including pension funds, insurance companies, asset managers and corporates. Almost all are based in North America. Credit Suisse led the deal.
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Grupo R Floats Bond in Choppy Waters
Mexican concession operator Grupo R has raised $270m in senior secured bonds via its RDS shipping vehicle. The 11.875% bonds priced at 97.131 to yield 12.500%. Because of the discount, the company opted to increase deal size by $10m from a planned $260m in order to secure sufficient net proceeds to cover the cost of operating a 5-year Pemex drilling contract. The notes are senior secured but are subordinated to a first-lien $225m 5-year bank facility. Some $170m in equity stands between creditors and bonds. The notes priced Wednesday and by late Thursday were already trading up around 3 points, hovering around par, say executives on the deal. The book for the B3/B minus deal was subscribed by more than 3x, they add. Grupo R is said to have been satisfied with the yield at reoffer, though the aftermarket performance suggests it may have been able to squeeze more out of a buyside that is seemingly enthusiastic about the issue. Market conditions have been challenging, with issuers seeking to avoid new launches. In the case of Grupo R, the deal has had to adhere to a tight issuance schedule because the concessionaire must have the funds on hand to pay for a new ship being built for the 5-year concession, which is scheduled to be delivered in March. Jefferies led the transaction.
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CFE to Bring Local Bond
Mexico’s CFE is planning to sell a 10-year local issue for up to MXP5bn, CFO Francisco Santoyo tells LatinFinance. A deal is likely within the next 60 days. The utility follows fellow state-owned issuer Pemex, which sold MXP15bn in fixed and floating-rate notes at the beginning of the month, in attempting to reopen local markets. CFE is rated AAA on a national scale. Its last issue was in August, raising MXP1.47bn in MXP-denominated 2019 bonds at a fixed 8.85%, and MXP1.95bn-equivalent in UDI-denominated 2019s at 4.60%, through Bancomer and Banamex.