Tarjeta Naranja, the Argentine credit card company controlled by Banco Galicia, has raised $200m from the sale of a new 2017 bond, its first in the dollar market. The issuer clinched a 9% yield where many had expected a higher handle. However, the bond was heard up in the gray, and demand reached $600m, according to a banker on the deal. The B rated bond priced at par with a 9.0% coupon to yield in line with 9.0% area guidance. The bond was up 1.00-1.25 point Tuesday afternoon, according to traders. “The 9% level seems tepid as Argentina still labors under a perception of being unfriendly to global markets,” Eric Ollom, head of EM corporate credit research at Jeffries tells LatinFinance. “There is higher yielding paper in the country that should outperform in the general market consensus of Argentina as an improving credit,” Ollom adds. He also notes a preference to play an improving Argentine situation via the provincial debt, which tends to offer higher yields and more liquidity than corporates. Closest comps include a Banco Hipotecario (B) 2016 trading to yield 8.75% and a Banco Macro (B/B2) 2017 trading to yield 7.7%, according to investors. The amortizing bond has a 4.5-year average life and pays off in 3 equal installments in years 4, 5, and 6. Proceeds are marked for general corporate purposes. Bank of America Merrill Lynch and Deutsche Bank managed the sale. Tarjeta Naranja offers its own branded cards, as well as Visa, MasterCard and American Express, to the middle income segments of the population, and is Argentina’s second largest credit card provider.
Yearly Archives: 2011
ICA to Price Perp Friday
Mexico’s ICA is expected to price a $300m-$400m perpetual bond Friday, according to a person with knowledge of the transaction. A price around 9% is the target, he adds. The bonds are callable in 5 years and rated Ba3/BB minus. BAML, Morgan Stanley and Santander are leads on the deal, which is being roadshowed in New York, Boston, Singapore, Hong Kong, Switzerland and London this week, ending Thursday.
Cablevision Sets Bond Target
Cablevision’s board has approved increasing its bond shelf to $600m from $100m, according to an Argentine regulatory filing. The cable provider controlled by Grupo Clarin does not give an indication of timing or maturity, but has been expected by the markets with a cross-border bond early this year. Cablevision is rated B by Fitch.
Salvador Breaks Sovereign Silence With Long Bond
El Salvador has taken the opportunity to extend the maturity profile in the region’s first dollar-denominated sovereign issuance of the year, a $654m 2041. The deal drew $1.7bn in orders, according to a banker on it. The Ba1/BB/BB minus note priced at par with a 7.625% coupon, in line with 7.625%-7.750% guidance. “At 7.750% you’re getting paid for the curve extension, at 7.625%, it’s a bit too tight,” says a London EM portfolio manager looking at the deal. El Salvador’s 7.65% of 2035 was trading to yield 7.20%-7.30% prior to announcement, according to investors, indicating a shallow 30bp-40bp for 6 years’ extension and new issue premium. The bond was heard up 0.25-0.50 point in the gray Tuesday afternoon. The issuer plans to use proceeds to refinance $654m in 8.50% bonds coming due in July. The issuer opted for the 30-year maturity in order to extend its profile, ahead of possible rate increase environment later in the year, according to a banker on the deal. Deutsche Bank managed the sale, famously stooping to a 1bp fee that scared off any potential co-leads. El Salvador’s previous bond issue was an $800m 2019 through Citi and JPMorgan in November 2009.
Celfin Plans Real Estate Fund
Celfin Capital plans to raise a second Chile-focused real estate investment fund. The fund, Celfin Rentas Inmobiliarias II, expects to see commitments of $100m-$150m, with a first closing in April, Rafael Ariztia, investment manager at the Celfin’s asset management unit, tells LatinFinance. He expects to add about $200m-$240m in leverage to the fund. Fundraising has already begun and the Chilean firm is targeting high net worth individuals and insurance companies. The first fund, which closed in 2009, had about $100m in commitments and is carrying $140m in debt. Ariztia says that the first fund, Celfin Rentas Inmobiliarias, is about to make its last investment, but declined to identify the target. The two funds acquire and lease office and commercial real estate. He says that ideally, the new fund will provide returns equal to inflation plus 8%. Ariztia adds that the funds generate stable, recurring revenues. For example, a lease contract on a unit in an office or commercial building can go from a minimum of 2-5 years to up to 15-25 years. Ariztia says the average investment per project is around $60m-$80m, depending on the asset type. The funds invest in Santiago, where overall vacancy rates are around 3.5%. Demand for space is even higher in the city center, with vacancy rates of only 1.0%-1.5%. Celfin has about $295m AUM.
Mexico ABS Seen Picking Up
Mexico’s securitization market is set to have a good year, as the Mexican economy stabilizes, according to S&P. However, any potential financial uncertainty could dissuade investment in new issuance. “Overall 2011’s structured debt issuance will be similar to 2010,” it says. Issuance in 2010 was $8.7bn equivalent. Mexican structured finance issuance in 2010 was made up of 34% RMBS, 22% ABS, 36% future flows, 4% synthetics and 4% partial credit guarantees. The issuance and performance of ABS is expected to remain strong. “For auto loans, trade receivables, and consumer loan transactions, we don’t anticipate any ratings actions in the short term (6 to 12 months),” says S&P. Issuance activity of synthetics and PCGs is expected to be similar in 2011 compared to 2010, with transactions adding up to $166.8m. S&P expects Infonavit and Fovissste to continue to issue large amounts of RMBS. In 2010, 9 transactions of loans originated exclusively by Fovissste and Infonavit were rated, with the total number of RMBS declining 24% since 2009. The construction sector is expected to continue to face challenges, as in 2009 and 2010, and as a result so are construction loan securitizations. During 2010 S&P withdrew 11 ratings, and downgraded 6 because they failed to pay back principal on time. Securitization of new assets, such as guaranteed consumer loans and microloans are also expected this year. The agency adds that it anticipates new participants in the market and fewer negative ratings actions. In total, considering all types of issuance, S&P downgraded 45 series and affirmed 35 ratings during 2010.
Pimco Manager Joins HSBC
Guillermo Osses has joined HSBC Asset Management in New York as an EM fixed-income portfolio manager, according to people with knowledge of the matter. He is said to have joined last week, after moving from Pimco, where he was also EM portfolio manager. His hiring comes as HSBC Asset Management reorganizes and absorbs HSBC Halbis. The EM portfolio management duo of Arif Joshi and Denise Simon left Halbis last year to launch an EM fixed-income platform at Lazard Asset Management.
Pimco Manager Joins HSBC (1)
Guillermo Osses has joined HSBC Asset Management in New York as an EM fixed-income portfolio manager, according to people with knowledge of the matter. He is said to have joined last week, after moving from Pimco, where he was also EM portfolio manager. His hiring comes as HSBC Asset Management reorganizes and absorbs HSBC Halbis. The EM portfolio management duo of Arif Joshi and Denise Simon left Halbis last year to launch an EM fixed-income platform at Lazard Asset Management.
Rexel Acquires Brazilian Supply Distributor
Rexel has acquired Brazilian electrical supply distributor Nortel Suprimentos Industriais. The French supply distributor does not reveal how much it paid for the EUR110m revenue company. It says the acquisition, along with others in India and China announced simultaneously, will be accretive from the first year. The Stratus Group advised Rexel on the acquisition.
Gruma to Shed Banorte Stake
Mexico’s Gruma plans to sell most of its 8.8% stake in Banorte, it says. The tortilla maker plans to sell up 141.9m shares in the bank in the US, Mexico and other markets, with the option of a 14.2m greenshoe. Based on Monday’s MXP54.82 closing price, Gruma would raise up to MXP8.55bn. Books are set to close February 9, with pricing announced February 10. The shares to be offered represent 7.7% of Banorte, lowering Gruma’s holding to 1.1% from 8.8%. Banorte, BBVA Bancomer, Morgan Stanley and UBS are managing the sale.