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  1. #1
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    Default Cap Cana to go bonds

    Dominican Republic resort Cap Cana to sell $200 M bonds
    New York. Dominican Republic's Cap Cana tourism resort plans to sell $200 million of senior secured notes to accelerate construction of the first phase of development, according to a syndicate official at Bear Stearns.
    The deal size is currently set at $200 million, and pricing guidance should be available by the middle of next week, the official said.
    They will be seven-year amortizing bonds with an average life of five years, the person said.
    The bonds are expected to be rated at the sovereign ceiling, one notch above recent deals done by Dominican Republic power companies, the person said.
    Moody's Investors Service currently has the Dominican Republic's country ceiling at a speculative grade B1, while the sovereign rating is two notches lower at B3. Both Standard and Poor's and Fitch Ratings give the country a single-B rating.
    The Cap Cana resort, located next to Punta Cana international airport, covers an area twice the size of Manhattan. According to the company's Web site, the projected total investment is $1.5 billion.
    The company will carry out roadshows in London on Monday and Tuesday, Miami on Wednesday and New York on Thursday, the person said.
    Pricing could be at the end of next week, subject to market conditions, he said.
    The bonds carry a change-of-control put at 101% of principal plus any accrued and unpaid interest.

  2. #2
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    And the Dominican credit curve grows.

    AES
    ITABO
    Autopistas del Nordeste
    Cap Cana
    + 5 Sov. Issuers (including 2 bradies)

    This is good because a credit benchmark helps in the credit creation process

    Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.

  3. #3
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    Cap Cana Bonds priced this morning.

    Issuer: Cap Cana, S.A.
    Amount: US$ 250 million
    Coupon: 9.625%, semi-annual, fixed
    Issue Price: 100.00
    Maturity: 11/03/2013
    Principal Payment: 8 equal semi annual payments commencing on 5/3/10
    Average Life: 5.25 years (February 3, 2012)
    Make-Whole Call: UST + 100 bps
    Change of Control: @101% of principal


    Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.

  4. #4
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    ME, what's your personal opinion of it, lol. ..I'm seriously asking for you opinion of it.

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    Aegap,

    I still stand by me previous comment. I think this is a positive developemnt. The country already has a sovereign benchmark for credit. Now the corporate sector is slowly developing one which will be useful, as a reference, for local and external corporate issuances.

    I would not be surprised if more local companies decide to come to market now that Cap Cana has done it. Remember, the buyers of these issues prefer companies with US$ earning power, and not many sectors of the Dominican economy check this box (at least for now).


    Note: This is my personal opinion, an should not constitute investment
    advice. E-mail me at my personal address if you want to develop a dialogue.

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    If the lay person only understood how news likethis greatly reduces the cost of finances for Dominican companies, specially in this case with Cap Cana, ..whose rate it very well tied to how well DR's economy is perceived to be doing.


    News like the following saves Dominican companies who finance with debt/public capital a great lot:

    FROM THE ECONOMIST INTELLIGENCE UNIT
    The Dominican economy is registering startling growth this year, estimated by the Central Bank to have reached 11.3% during the first three quarters. This should put the country on track to post double-digit expansion of at least 10% for full-year 2006, and place it among a select group of the top-ten fastest-growing economies in the world.
    The main drivers this year have been domestic sectors such as construction (up 29.8% during the first three quarters), communications (26%), and agriculture and fisheries (14.9%), according the Central Bank. Only one sector, export-oriented free zones, posted a contraction (-5.4%).
    ..had Cap Cana seeked these bonds during the previous Dominican administration, it would probably had cost millions of additional dollars to get them.

    The following from The Economist article is a nother great reason why:


    Meanwhile, officials predict inflation of 6% this year, down from their previous forecast of 7.5%. The Central Bank has maintained a tight monetary stance in order to keep the currency stable and contain inflation despite an unfavourable global environment, marked by high petroleum costs and increases in international interest rates.

  7. #7
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    Corporate issuers (or non-sovereign issuers in general) always prefer (need) a stable macro-economic environenment where there can issue debt (or equity) as it would, at least, provide for pricing under stable conditions. No issuer prices debt when the UST curve (benchmark of benchmarks) is swingling wildly. This is precisely what is happening with Argentinian issuers, that now that the sovereign issuer is stable are coming to market.



    Note: This is my personal opinion, an should not constitute investment advice. E-mail me at my personal address if you want to develop a dialogue.

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    Exactly! ..had Cap Cana issued these bonds during the previous administration, the coupon rate would have been like 99% percent or something, lol.

  9. #9
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    Default How It All Wend Down: Cap Cana completes largest corporate bond issue in DR history

    Valued at US $250 Million in 7-Year Bonds at 9.62%, this transaction is considered to be the largest issue by a private corporation in the country.

    Santo Domingo. Cap Cana has just completed the largest international corporate bond issue in the history of the Dominican Republic, at the lowest interest rate ever for a Dominican company in the international arena.

    The company issued $250 million US dollars in 7-year bonds at a rate of 9.62%. This is the first time that a Dominican company is financed in the international market at a rate below 10.87%.

    In addition, Cap Cana is the only corporate issuer from the Dominican Republic to receive an international B rating by risk assessor Fitch Ratings, making it the highest ranking ever granted to company from this country.

    Likewise, Moody's Investors Services gave it an international rating of B3. The success and low cost of the bond issue reflect the perception of reduced risk among foreign investors, the confidence inspired by its executives and the country's robustness for the development of world-class projects such as Cap Cana.

    "We are very pleased to see Cap Cana, one of the companies in our consortium, issue bonds worth $250 million US dollars, this demonstrates its unequivocal business drive and its already well-deserved prediction as a successful project, which can only be compared to some of the most select destinations in the world," declared Abraham Hazoury, President of Grupo Abrisa.

    "With this new boost of fresh capital, Cap Cana ensures it will continue on its accelerated rhythm of growth and will certainly fully achieve its goals," pointed out Ricardo Hazoury, President of the Cap Cana Board of Directors.
    With the funds obtained through this bond issue, Cap Cana will pay in full its debt to the national banks, by making a payment of US $62.3 million. The remaining net funds will be used to speed up the project's development.

    This is a pioneering transaction in many ways. Cap Cana, along with financial consultant and bond issue manager, Bear, Stearns & Co., developed an innovative financing structure with a level of complexity and sophistication never seen before in international markets.

    The structure provides investors with an important level of protection by integrating a dynamic system of guarantees, which adjust as the construction project moves forward. It provides Cap Cana an extraordinary level of flexibility that will enable it to drastically increase its levels of sales, provide better payment plans for customers, and significantly increase the project's development speed.

    The transaction's main innovation is the effective combination of securitization processes with project financing. There is an important construction component, which enables the creation of an attractive structure for both the investors and the company.

    Funds from the bond issue will be deposited in an escrow account and will be disbursed for construction purposes, under de supervision of international firm The Louis Berger Group Inc., which will act as an independent engineering company.

    "The quality of construction at Cap Cana is at par with the highest international standards," said Carlos Marcenaro, Senior Vice-President of The Louis Berger Group Inc. Interest generated by this transaction, as evidenced by a high demand of more than $100 million US dollars, enabled an increase in the bond issue from US $200 million to US $250 million, as well as a reduction in the interest rate to unprecedented levels for a Dominican corporate issuer.

    This significant success, along with the innovative financial engineering, has spurred rumors around international financial circles that it may be nominated Transaction of the Year in Latin America.

    CB Richard Ellis, the largest international real estate services company in the world, rated the Cap Cana property at US $1.11 billion. Jorge Hurtado, Director at CB Richard Ellis, pointed out that "Cap Cana is a development that stands out because of its ambitious dimensions; the combination of beaches, golf and a marina, and the indisputable beauty of its surroundings.
    The project's distinctiveness, along with the prices it has achieved, reflects an impressive proposition of added value equal to the top destinations in the Caribbean." Given this high value, even after this bond issue, Cap Cana's debt levels will remain relatively low, since its total debt represents less than 30% of the project's worth.

    Following its high-profile track of partnering with some of the most prestigious firms around the world, Cap Cana resorted to Bear, Stearns & Co. Inc. as the exclusive agent for the bond issue; and to Simpson, Thacher & Bartlett and Mejia, Armenteros & Ortiz, as legal counsel in the United States and the Dominican Republic, respectively. In turn, Bear Stearns secured the legal services of Thacher Profit Wood in the United States, and those of Squire Sanders Dempsey Pena Prieto & Gamundi in the Dominican Republic. KPMG Dominican Republic audited the company's financial statements, validating the data contained in the Offer Memorandum.
    "We feel highly honored to have the opportunity to be part of a financial milestone in Dominican history," said Jose N. Cardona, Executive Partner at KPMG.

  10. #10
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    Default How It All Wend Down: Cap Cana completes largest corporate bond issue in DR history

    Valued at US $250 Million in 7-Year Bonds at 9.62%, this transaction is considered to be the largest issue by a private corporation in the country.

    Monday November 13, 7:05 pm ET

    Santo Domingo. Cap Cana has just completed the largest international corporate bond issue in the history of the Dominican Republic, at the lowest interest rate ever for a Dominican company in the international arena.

    The company issued $250 million US dollars in 7-year bonds at a rate of 9.62%. This is the first time that a Dominican company is financed in the international market at a rate below 10.87%.

    In addition, Cap Cana is the only corporate issuer from the Dominican Republic to receive an international B rating by risk assessor Fitch Ratings, making it the highest ranking ever granted to company from this country.

    Likewise, Moody's Investors Services gave it an international rating of B3. The success and low cost of the bond issue reflect the perception of reduced risk among foreign investors, the confidence inspired by its executives and the country's robustness for the development of world-class projects such as Cap Cana.

    "We are very pleased to see Cap Cana, one of the companies in our consortium, issue bonds worth $250 million US dollars, this demonstrates its unequivocal business drive and its already well-deserved prediction as a successful project, which can only be compared to some of the most select destinations in the world," declared Abraham Hazoury, President of Grupo Abrisa.

    "With this new boost of fresh capital, Cap Cana ensures it will continue on its accelerated rhythm of growth and will certainly fully achieve its goals," pointed out Ricardo Hazoury, President of the Cap Cana Board of Directors.
    With the funds obtained through this bond issue, Cap Cana will pay in full its debt to the national banks, by making a payment of US $62.3 million. The remaining net funds will be used to speed up the project's development.

    This is a pioneering transaction in many ways. Cap Cana, along with financial consultant and bond issue manager, Bear, Stearns & Co., developed an innovative financing structure with a level of complexity and sophistication never seen before in international markets.

    The structure provides investors with an important level of protection by integrating a dynamic system of guarantees, which adjust as the construction project moves forward. It provides Cap Cana an extraordinary level of flexibility that will enable it to drastically increase its levels of sales, provide better payment plans for customers, and significantly increase the project's development speed.

    The transaction's main innovation is the effective combination of securitization processes with project financing. There is an important construction component, which enables the creation of an attractive structure for both the investors and the company.

    Funds from the bond issue will be deposited in an escrow account and will be disbursed for construction purposes, under de supervision of international firm The Louis Berger Group Inc., which will act as an independent engineering company.

    "The quality of construction at Cap Cana is at par with the highest international standards," said Carlos Marcenaro, Senior Vice-President of The Louis Berger Group Inc. Interest generated by this transaction, as evidenced by a high demand of more than $100 million US dollars, enabled an increase in the bond issue from US $200 million to US $250 million, as well as a reduction in the interest rate to unprecedented levels for a Dominican corporate issuer.

    This significant success, along with the innovative financial engineering, has spurred rumors around international financial circles that it may be nominated Transaction of the Year in Latin America.

    CB Richard Ellis, the largest international real estate services company in the world, rated the Cap Cana property at US $1.11 billion. Jorge Hurtado, Director at CB Richard Ellis, pointed out that "Cap Cana is a development that stands out because of its ambitious dimensions; the combination of beaches, golf and a marina, and the indisputable beauty of its surroundings.
    The project's distinctiveness, along with the prices it has achieved, reflects an impressive proposition of added value equal to the top destinations in the Caribbean." Given this high value, even after this bond issue, Cap Cana's debt levels will remain relatively low, since its total debt represents less than 30% of the project's worth.

    Following its high-profile track of partnering with some of the most prestigious firms around the world, Cap Cana resorted to Bear, Stearns & Co. Inc. as the exclusive agent for the bond issue; and to Simpson, Thacher & Bartlett and Mejia, Armenteros & Ortiz, as legal counsel in the United States and the Dominican Republic, respectively. In turn, Bear Stearns secured the legal services of Thacher Profit Wood in the United States, and those of Squire Sanders Dempsey Pena Prieto & Gamundi in the Dominican Republic. KPMG Dominican Republic audited the company's financial statements, validating the data contained in the Offer Memorandum.
    "We feel highly honored to have the opportunity to be part of a financial milestone in Dominican history," said Jose N. Cardona, Executive Partner at KPMG.
    Last edited by aegap; 11-15-2006 at 06:52 AM.

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