Avianca is not considering an IPO of its operating company in Colombia, it says, though it is keeping its options open at the Avianca-Taca combined holdco. “Avianca SA informs that, to date, it has not considered filing to list its shares on the Bolsa de Valores de Colombia. However, its shareholders through Avianca Taca Limited constantly analyze options in the capital markets,” the airline says. The company was responding to speculation about listing in the local press. With significant fundraising needs, ECM bankers say a plan is still likely in the cards. However, the company may elect to list locally this year, and subsequently add ADRs or a New York listing at a later date. Avianca and Taca merged in 2009, and have been expected by analysts to issue equity ever since.
Yearly Archives: 2011
Panama Kicks Off Japan Issuance
Panama has become the region’s first sovereign issuer in 2011, pricing a JPY41.5bn ($502m) Samurai debut in Japan. The 10-year bond with a 1.81% coupon priced at par to yield yen Libor+48bp, the tight end of 47bp-50bp guidance, narrowed from an earlier 47bp-55bp range. Daiwa and Mitsubishi managed the sale. The bond comes with a 95% guarantee from the JBIC development bank “Clearly with a 1.81% coupon there were significant savings [versus a dollar issue], and we estimate savings of $100m over the life of the bond,” Mahesh Khemlani, the finance ministry’s director of public credit, told reporters Tuesday. He says a new USD 10-year would have come at about a 4.65%-4.75% yield. Khemlani’s savings estimate includes a fee paid to JBIC in exchange for its guarantee. He declines to disclose the fee cost. The order book reached about JPY90bn, he says, with buyers from pension funds, insurance companies, regional banks and other institutions. The finance ministry is determining whether and how it will swap proceeds, but will almost certainly exchange at least the interest payments. Khemlani says Panama plans to return to the Japanese market in the future, particularly since the Panama Canal is expected to see an increase in traffic from Asia once expansion is completed. The spread bested the Libor+50bp Mexico got in October for a 10-year JPY150bn bond with a 1.51% coupon. Khemlani says Panama will focus on multilateral and domestic market funding for the rest of 2011, and does not foresee returning to international capital markets again this year. Panama is rated BBB minus.
PDVSA Raises $3.15bn
PDVSA has reopened $3.15bn of its 8.5% coupon 2017 bonds, it says. The Venezuelan state-owned oil producer is selling them to the “Central Bank of Venezuela and other funds” through a private placement, it says, a method it has used in previous transactions. Approximately $2.5bn would go to the central bank to pay a loan, Barclays says in a report, with the remainder going to pension funds of public institutions. The latter are expected to keep the bond until maturity. That portion should not impact the market, while the portion given to the BCV will be progressively sold to the market, Barclays says. PDVSA is rated B+.
Marfrig Preps Local Issue
Brazilian meatpacker Marfrig is planning to raise BRL600m in local 2015 bonds, it says. The issuance would be divided into a portion paying interest at up to 127.6% of DI rate, and another paying interest at the ICPA inflation index plus up to 9.5%. A finance official declines to say whether a bank has been hired. Marfrig is rated BBB+ on a national scale.
GVO Bond Shoots for 10%
Grupo Virgolino de Oliveira (GVO) is whispering a yield of low to mid 10%s for a new 2018 NC4 debut dollar bond, expected this week. A $250m bond is expected. B3 rated GVO is scheduled to finish its roadshow Thursday. BTG Pactual, Credit Suisse, Itau and Santander are managing the sale. “It’s not often you see a double-digit yield from Brazil,” says a London-based EM investor looking at the Brazilian sugar producer. GVO is a member of the Copersucar cooperative. The investors says this helps mitigate concerns about price volatility and small issuer liquidity in a commodity exporting business. Copersucar acts as a guaranteed buyer for co-op members’ production, reducing some of the risks of the commodities market. The company was founded in 1921 and operates 4 mills in Sao Paulo state.
Banks Define Bond Plans
Brazilian mid-size lenders Banco Daycoval and Banco Safra are each closing in on dollar bond transactions. BBB minus rated Safra is heard whispering UST plus mid-300bp for a 10-year $500m Tier 2 bond. BAML, JPMorgan and UBS are managing the sale, which is scheduled to finish roadshowing today. Meanwhile, BB rated Daycoval plans a 2016 bond, according to Fitch, which notes that proceeds will be used to extend the bank’s funding structure and to enable new business generation. The issue is expected to be under $500m, and yield around the mid 6% area, investors say. Goldman Sachs, HSBC and Standard Chartered are managing investor meetings, also scheduled to conclude today.
Debt Appetite Lingers as Petrobras Launches
Petrobras has added its name to a heavy new issue pipeline this week, planning a benchmark sized 5, 10 and 30-year transaction. Many smaller and higher-yield names have issued this month, but with only Cemex having offered a $1bn or larger deal, oversupply had not yet been a worry. Petrobras, however, should come for at least $2bn, and perhaps as much as $6bn, according to investors. BTG Pactual, Citi, HSBC, Itau, JPMorgan and Santander are managing the sale, which is being done to raise funds for general corporate purposes and capex. The Brazilian oil company is attempting to knock out all of its 2011 DCM needs in one go, they say. “There is still a lot of liquidity,” says a New York-based EM investor. “The new issue calendar is considerable, but most make sense, and there is still enough room for them in our asset class,” he adds. “Corporates see that there could be a rising interest rate environment ahead, and decide to secure cheap money now before it isn’t cheap any more,” Bevan Rosenbloom, fixed income analyst at RBS, tells LatinFinance. Though the market may be able to absorb the supply, the amount of issuance could mean poorer aftermarket performance than has been seen in recent months, he adds. Two of last week’s larger issuers, Cencosud and CMPC, have failed to pop in the aftermarket as they might have late last year, according to investors. The pair finished Tuesday at 98.5 (versus 98.78 reoffer) and 99.8 (versus 99.52 reoffer), respectively. Baa2/BBB/BBB minus Petrobras plans to price later this week following telephone meetings and a New York breakfast today. Also on tap for this week and early next are Brazilian banks Safra and Daycoval, Colombian utilities Emgesa and EPM – both aiming to do a global COP – Brazil’s Energisa and Grupo Virgolino Oliveira, and Argentine Gaming Group.
Markit Launches EM Debt Indices
Markit, the financial information services company, has launched some USD EM debt indices called Markit iBoxx to cater to increased investor interest in EM debt. The benchmarks add to Markit’s GEMX index, launched in 2008, which tracks the performance of EM sovereign debt denominated in local currency. The new index family includes a liquid tradable index which Markit says will be used as the basis for index-linked tradable products such as ETFs. The benchmark index comprises 37 EM countries and 190 bonds, and is rebalanced monthly. The tradable index comprises 20 countries and 36 bonds which are selected quarterly from the benchmark index based on the total amount outstanding for each country in the benchmark index and the latest quarterly bond trading volumes.
Ecopistas Debenture Gets Ba1 Rating
Moody’s rates Ecopistas’BRL350m senior secured debentures Aa2 on a national scale. The outlook is stable for all ratings. The debentures will be issued in 4 series of BRL87.5m each, with tenors from 135-144 months. The debentures will begin to amortize annually 15-24 months after issue date. The issue is secured by pledge of Ecorodovias Conessoes’ stock. Ecorodovias Conessoes is an intermediary company of Ecorodovias Infraestructura e Logistica, created to consolidate its toll road business. Ecopistas is a subsidiary of Ecorodovias Infraestructura. Issuance could be increased to BRL370m, depending on market conditions. Proceeds will be used to refinance around BRL371m in promissory notes due June 2011. The Aa2 rating is one notch higher than the Ecopistas issuer rating to reflect the guaranty provided by Ecorodovias Concessoes. Embedded in the Ecopistas’ proposed debentures are also covenants designed to limit leverage, such as a maximum net-debt-to-Ebitda ratio of 4.0x, a minimum debt service coverage ratio of 1.2x and a minimum equity capital ration of 20%.
Unirenta Arrendamientos Delays MXP ABS
Unirenta Arrendamientos, a Mexican leasing company, has postponed raising up to MXP200m in a securitization of its loan portfolio. The transaction was originally expected to take place January 20. It has been pushed back to February or March due to regulatory delays, says a director at Unirenta Arrendamientos. He adds that a bookrunner for the deal has not yet been determined, but will be selected by the end of next week. The maturity is 3.5 years, and is rated AAA on a national scale by HR Ratings.