Pacific Rubiales has named BofA-Merrill Lynch as lead arranger for an up to $200m credit facility. The Canada-based oil producer operating in Colombia expects the syndicate to be made up of both Colombian and international lenders. The facility would replace existing smaller facilities, and the borrower does not expect to fully draw it down in 2010. Pricing will depend on ratings from S&P and Fitch, it says. The joint operator of the Quifa block in Colombia’s Llanos Basin raised $450m in November through a 8.75% 2016 bond, rated BB minus/B+, and $258m in a warrant exchange offer last month. Rubiales has about $615m in debt, according to Barclays Capital, which expects at least some of the facility to be drawn this year. “While we believe ratios could potentially deteriorate if the full capex program is implemented and production targets are not reached, we believe that the recent warrants transaction and cash on hand are likely to cover most of the needs,” the shop says, noting that the outlook remains positive.
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BR Properties Defines IPO Plan
Commercial property manager BR Properties has updated plans to go public and pinned down a pricing date of March 4. The company, whose main investors include private equity company GP Investments, says it plans to sell 57.5m primary shares and 14.4m secondary shares at BRL14.00-BRL18.00. As such, the base offering, which doesn’t included additional shares, could yield BRL1.15bn. The company also reserves the right to increase size via a 15% hot issue of 10.8m shares, and it will give underwriters the chance to sell an additional 17% greenshoe of 12.2m shares. All told, the transaction could raise up to BRL1.5bn if priced at the midpoint, a sizable trade compared to the other 5 issuers in the Brazil IPO pipeline. BR Properties first tried an IPO in October 2007, but market conditions derailed the deal and the company raised the equity it sought through private raises. Selling shareholders in the upcoming offering include GP, funds belonging to Tudor, Dynamo, Orsay Investments, RIT Capital Partners, Prima Investments, Osprey Funds, and individuals. The deal is being led by an unusually high number of banks, even for its size: Itau BBA, the global coordinator, and joint-leads Bradesco BBI, Goldman Sachs, Safra and Santander.
Auto Loan Specialist Files for IPO
GRV Solutions, a Brazilian provider of credit management and processing services, has filed to go public on the Bovespa. A preliminary prospectus filed with the CVM offers few details on the company’s size or dimensions of its offer. A 2009 consolidated pro-forma estimate of its Ebitda, which includes earnings from a December 2009 acquisition of auto insurance service provider Sascar, adds up to BRL133m. Half the proceeds of the offering are geared towards acquisitions, says the company. GRV services financial institutions, including insurance companies, risk managers and automobile concessionaires through various subsidiaries. Much of GRV’s business is geared toward auto financing, and the 12-year old firm is apparently looking to capitalize on a surge in income and auto sales, particularly to the lower and middle earning classes. JPMorgan, Credit Suisse and Itau BBA have been hired to lead the transaction.
Schahin Diversifies With Secured Bond
Brazilian industrial group Schahin is looking to make a grand entrance into the cross border capital markets with a $300m 7-year secured bond. The deal has gotten preliminary investment grade ratings from Fitch and Moody’s, Fernando Schahin, CFO of the group, tells LatinFinance. Nomura, the main bank hired to structure and place the bond, will look to price off the Petrobras yield curve, adds the Brazilian executive. Target investors include insurance companies, financial institutions and other investment grade buyers. Proceeds of the upcoming new issue, which will likely launch later this month or in early March, will help fund Schahin’s equity contribution to an upcoming $1.6 billion 10-year concession with Petrobras to be operated by Schahin’s Black Diamond drillship. Grupo Schahin, whose dealings with the cross border markets have mainly involved raising sizable project loans to finance an offshore drilling unit, says it wants to open a new funding base. “We want to diversify our sources of capital to sustain our growth,” Schahin says. “To do this we are putting our best asset to work,” he adds. “We want to make a statement, here, and have a good deal out in the capital markets.” The asset referred to is Schahin’s Lancer platform, one of the longest-running Petrobras contractor ships. While the ship’s hull was originally built in 1977, the rest of the rig has been regularly modernized and boasts state-of-the-art technology, claims Schahin. It has one of the longest performance records in the industry, no construction risk and its client Petrobras provides a strong contract risk-mitigator. As such, Lancer passes critical tests faced by platforms seeking financing. A newly signed 7-year contract with the state-owned oil company, which includes a day rate of $300,000, provides a strong candidate for a debut debt issue, adds the executive.
Mexico Gets French Loan
The French Development Agency (AFD) has agreed to lend Mexico EUR185m to support government environmental-protection policies, Mexico’s finance ministry says. The 20-year loan pays interest at a spread to Euribor, and supports a government program promoting low-carbon development. It is AFD’s first in Mexico, the ministry says, and comes as a part of recent effort to increase activity in Latin America.
Haiti Reconstruction to Cost up to $14bn
An IDB study calculates that it will cost between $8bn and $14bn to rebuild Haiti’s infrastructure, making the earthquake that hit the country in January proportionately the most destructive natural disaster of modern times. IDB economists Andrew Powell, Eduardo Cavallo and Oscar Becerra calculate a base estimate of $8.1bn for a 250,000 dead-or-missing toll, but they estimate this figure is likely to be at the low end. The team concludes that an estimate of $13.9bn is within the statistical margin of error. As of February 11, the Haitian government had reported 230,000 dead.
IMF Sees Colombia Recovery
The IMF expects a recovery for the Colombian economy thanks following a recession-related dip, thanks to economic policies implemented before and during the global financial crisis. The multilateral says GDP growth is expected to pick up to about 2.0%-2.5% in 2010 compared to a contraction of 0.2% in 2009 as monetary and fiscal policy continue supporting domestic demand. The country’s financial system will also provide a strong basis for a resumption of credit, predicts the IMF. Inflation will expected to rise due to temporary increases in food prices related to El Nino, but nonetheless remain within the 2.0%-4.0% target range during the year, notes the agency. The balance of payments position is expected to improve, with strong capital flows expected to more than cover the increase in the external current account deficit. The global lender also highlights that public debt remains moderate and should decline over the medium term as growth resumes.
Jamaica Extends JDX Settlement Date
Jamaica has extended the settlement date for its JAD700bn ($7.86bn) Jamaica Debt Exchange (JDX) to February 24 from February15, it says, in order to complete processing of the old notes, and begin issuing new notes. The participation rate is over 97%, “including substantially full participation from institutional investors and a strong response among retail investors,” it says. In the tender closed February 3, the government offered holders of more than 350 government securities a par exchange for bonds with lower interest rates and longer maturities. The maturity extension should be an average 2.5 years, with interest rates lowered from an average of 18%-19% to 12%, according to ratings agency and sell-side analysis. Citi is managed the process, which coincides with a 27-month $1.27bn IMF stand-by agreement.
Fitch Upgrades Jamaica
Fitch has upgraded Jamaica’s ratings to B minus from CCC, taking into account the recent approval of a $1.27bn IMF stand-by arrangement which mitigates near-term external liquidity concerns. The successful outcome of the domestic debt exchange also supports the upgrade, Fitch says, adding that the outlook is stable. Nevertheless, Jamaica’s credit profile remains weak. While the sovereign secured interest savings through the domestic debt restructuring, Fitch forecasts that Jamaica’s interest-to-revenue ratio will remain extremely high at over 40% during the forecast period. Furthermore, Fitch expects other fiscal solvency ratios to remain weaker than the single B median. For example, general government debt stands at over 120% of GDP compared to a single B median of 31%.
Colombia’s Popular Taps Local Debt
Colombia’s Banco Popular has sold COP500bn ($254m) in local bonds across 6 tranches, says finance vice president Aida Diaz, adding this is the first issue of a plan to sell up to COP3trn over 3-6 years. A COP99.7bn 18-month tranche pays IBR plus 1.10%; a COP72.5bn 24-month piece pays IBR plus 1.24%; a COP67.0bn 24-month tranche pays DTF plus 1.10%; a COP41.5bn 36-month piece pays IBR plus 1.44%; a COP177.4bn 36-month tranche pays IPC plus 3.30% and a COP41.4bn 60-month piece pays IPC plus 3.90%. Diaz says the bank originally planed to issue only COP350bn, but upsized the amount due to demand, which totaled COP771.0bn. She adds that proceeds of the AAA rated bond will be used for working capital and that Popular lead the sale itself. Subsequent issues will be made depending on market conditions, she says.