The Venezuelan government says it will create a $1bn fund to finance power projects in the country. The National Electricity Fund will be managed by the electric power ministry, which has unveiled plans to increase capacity by almost 15,000MW by 2015 with the construction or modernization of 24 thermoelectric and hydroelectric plants. The government claims the country’s electricity infrastructure has been suffering due to droughts caused by El Nino, though a lack of investment and maintenance is also a likely cause. The government does not specify how it will raise the funds.
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PDVSA Seen Tapping in H2
Despite claims from the Venezuelan government that PDVSA will not issue new debt in the bond market this year, Barclays analysts believe the state-owned oil giant is a likely candidate for issuance later in the year. “In our meetings, the [central bank,] the ministry of finance, and PDVSA assured us that there will be no issuance in 2010. However, we are not so optimistic and believe only that this will not happen in the coming months,” says the shop, who believes combined sovereign and PDVSA debt issuance this year should not top $6bn. “Our baseline scenario continues to be $3bn in new issuance from PDVSA, with maturities in 2012 and 2013, and $3bn from the republic, with maturities in 2017 and/or after 2021,” according to Barclays, whose Venezuela analyst has recently toured the country’s institutions. Elsewhere, PDVSA is heard arranging bank meetings in Asia and Europea for its $1.5bn 3-year syndicated loan via BES and China Development Bank. The deal pays Libor plus 450bp.
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Peruana Wraps Debut RMBS
Titulizadora Peruana has priced a $32m RMBS, its first ever mortgage-backed security offering, according to an official at the securitization specialist owned by Titularizadora Colombiana. The 20-year bonds backed by mortgages from BCP and Interbank pay 4.8% and saw demand of $34m. The bond is dollar-denominated to match the currency of the loans. In addition to the AAA rated senior pice, a 9.0% subordinated issue raised $2m. BCP’s Credibolsa unit and Inteligo are placement agents for the deal.
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Banco de Bogota Sells Bonds
Banco de Bogota has sold COP200bn in subordinated bonds across 4 tranches. A COP45.5bn 7-year piece pays IPC plus 5.33%; a COP49.2bn 7-year piece pays UVR plus 5.29%; a COP50.3bn 10-year piece pays IPC plus 5.45%, and a COP55.1bn 10-year piece pays UVR plus 5.45%, says Juan Carlos Paez, the bank’s treasury manager. He adds that total demand soared to COP306bn. This issue is part of the bank’s plan to issue up to COP1.50trn over a 5-year period to raise working capital. Banco de Bogota managed the sale itself.
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CSN Cimpor Bid Fails
Brazilian steel and ore specialist CSN says it has not acquired any shares in Cimpor after its public tender for a minimum of 33% and a maximum of 100% of the target’s 672m shares failed to reach the minimum threshold. In a statement posted on the CMVM, NYSE Euronext notes CSN was only able to acquire 8.6% of the company’s shares, well short of the third it sought. On February 12, CSN had revised its original offer by increasing the price per share of its offer to EUR6.18 from EUR5.75 and lowering the minimum target to 33% plus one share from 50% plus a share. With CSN out of the bidding, for the moment at least, Cimpor’s shareholder structure stands as follows, according to the company: Camargo Correa owns 28.6% of the total shares and of the voting rights, having acquired stakes from Teixeira Duarte and Bipadosa; Grupo Votorantim owns 21.2% of the share capital and 30.8% of the voting rights alongside Caixa Geral de Depositos, which separately also owns 9.6% of the share capital; Manuel Fino owns 20.3% of the shares and 10.7% of the capital and 20.3% of the voting rights; Banco Comercial Portugues owns 10.0% of shares and votes, and public investors account for 19.1% of the shares and voting rights. Credit Suisse advised Camargo Correa, Deutsche advised Votorantim and BES advised CSN.
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Stakeholder Opts for Smaller LAN Slice
Chile’s Cueto family, which owns a 25% stake in LAN Airlines through its Costa Verde Aeronautica holdings, says it is buying only an 8.6% additional stake in the airline from Axxion and Inversiones Santa Cecilia, which are controlled by president-elect Sebastian Pinera. The move, which will cost the Cuetos CLP264bn ($488m), has surprised market watchers who expected the family to purchase all of the 21.10% in LAN it had a right of first refusal on. Costa Verde had also recently announced plans to raise $1bn equivalent in additional equity, a deal presumed to be done in anticipation of the full exercising of the LAN stake option. The move opens the possibility for Brazil’s TAM to buy a larger stake in LAN than originally what was originally expected by the market. Brian Moretti, equities analyst at Planner Corretora in Sao Paulo, writes in a research note that TAM has around $725m in cash, enough to acquire the remaining 12.5% stake held by the Chilean entities. Based on the CLP9,100 per share paid by Costa Verde Aeronautica, the remaining stake could be worth CLP391bn ($723m). The Cuetos are paying for their smaller stake with CLP237bn going to Axxion and CLP27bn to Inversiones Santa Cecilia. Of the total amount, the buyers say they will pay CLP132bn in cash at closing and the remaining CLP105bn in installments.
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Ferrous Mum on Indian Overtures
Brazil’s Ferrous Resources is reported to be evaluating a $2.5bn offer made by India’s largest miner National Mining Development Corp. (NMDC) for a 50% stake, according to Indian daily Economic Times. A Ferrous spokeswoman declines to comment and senior officials at Ferrous could not be reached. Nevertheless, NMDC has publicly said that it is seeking opportunities to invest in iron ore, coal, manganese, diamond and gold assets around the world. It says it is seeking to lease, buy properties or form joint ventures.
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Mexico Prints 10-Year Benchmark
Mexico’s central bank has raised MXP25bn in local bonds by employing a bookbuilding process designed to ensure a broad, diverse distribution in the local market. Demand for the new 2020 notes was strong, totaling MXP75bn, which allowed the sovereign to issue the notes flat to the interpolated curve between the 2018 and 2023 maturities, says Gerardo Rodriguez, deputy undersecretary for public credit. “Distribution was very evenly balanced,” Rodriguez tells LatinFinance, noting 44% of the deal went to Afores, 15% to local banks, 15% to foreign and local hedge funds, 12% to local mutual funds and 7% to insurance companies, with the rest going to smaller accounts. Some 80% of the participation was from local investors and the remainder was foreign, which is in-line with the standard breakdown for Mexico’s local debt market. The 8.00% bonds were priced at 102.396 to yield 7.66%, right between the 7.56% and the 7.89% the two outstanding benchmarks were trading at, he adds. Last week, the public credit division had said it expected to raise MXP15bn-MXP25bn at a yield of around 8%, but it benefitted from a subsequent multi-session rally in local spreads. “The syndication concept is one we have just introduced [to our local market issuances] in 2010,” says Rodriguez. The official says the ministry plans to syndicate, or build a book for the first benchmark in each series, and then reopen them using the usual auction process. The next benchmark, to be issued in March, will be a 30-year, he adds, and a new 5-year note will come later on in the year.
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New AMX Plans MXP, USD Bonds
America Movil (AMX) is planning its first bond issuance since announcing it will take control of Carso and Telmex via M&A expected to forge the world’s third biggest telecom. Next week, the Mexico-based firm aims to place up to MXP15bn in the domestic market, AMX CFO Carlos Garcia Moreno tells LatinFinance. This will include up to MXP6bn in a 5-year floater, up to MXP7bn in a 10-year fixed rate note, and maximum MXP2bn in a 15-year UDI-denominated bullet. The CFO declines to state price expectations, though notes that AMX is rated 2 notches higher than the sovereign by one agency and on positive outlook from the others. The forthcoming notes received an A3/Aaa.mx rating from Moody’s while S&P its mxAAA mark for the company’s issuance. Garcia also underscores benefits of the tie up with Carso and Telmex, which he says makes AMX 8th biggest globally by revenue and 3rd by market cap. It should also significantly boost the ability to deliver new data by leveraging fixed lines, says the CFO. “The new company is so much stronger than anything you had in separate pieces that we have to start with new prices,” Garcia says, speaking of the local deal. “The old prices generally are not representative, they should not be the reference,” he adds. Garcia is known for aggressive pricing and getting strong comparative execution versus other markets, including dollars. Local investors estimate the 10-year could come anywhere between 75bp-100bp over the Mbono, while the 5-year floater could land 50bp-80bp wide of TIIE. AMX is roadshowing the MXP deal this week in Monterrey. Banamex is the lead on the transaction, which wraps up a local shelf, and will likely be joined by another bank. The 3-part sale will be followed by a dollar issue this year, after roadshows in Q2. “We likely will be going to various markets,” says Garcia. AMX plans to visit large investors to explain to them the dynamics of the new company, probably in April. The combined merged entity would have approximately $
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BNDES Posts Bigger Profit
Brazilian development bank BNDES says it recorded a profit of $2.0bn in 2009, a 26.8% increase from the previous year. The bank attributes the increase in returns to growth in its credit operations’ and securities’ portfolios. This was helped by allocation of $57.9m in funds from the national treasury in 2009. BNDES says it disbursed $75.5bn in 2009.