BBVA Bancomer is looking to issue up to MXP5bn, in either 3 or 5 year notes, according to a banker on the self-led deal. The bonds will be issued either in the last week of January or first week of February, adds the banker. The bonds are rated AAA on a national scale and will pay a spread over TIIE. Guidance has not yet been determined, says the banker. The bank will use the proceeds to expand its lending portfolio.
Yearly Archives: 2011
Posted inDaily Brief
Transelec Bonds Could Price High
Chilean DCM bankers off the deal say they expect the bonds of local power transmission company Transelec, rated A+, to price similar to issuers in the BBB range because the company is highly leveraged. According to Fitch, the company has a debt-to-Ebitda ratio of 5.2x on net debt of CLP789.7bn ($1.2bn) as of September 2010. Transelec, which expects to issue UF6.5m ($282.0m), is expected to see a spread of around 110bp-130bp over the BCU benchmark, bankers say. “That is about 20bp-30bp wider than what an A+ rated company could get,” says one of the bankers. A company spokeswoman declines to speculate on spreads as the roadshow is still underway. Corpbanca and Scotia are leading the sale.
Posted inDaily Brief
Cencosud Bond Whispers Heard
Cencosud has confirmed to buysiders that it will seek a new dollar bond, whispering yield indications of UST plus 225bp area on a 10-year maturity, according to investors. There is not yet an indication of size, but the Baa3/BBB minus Chilean retailer had been heard seeking up to $1bn. It is also considering a global peso tranche, investors say. Cencosud is scheduled to complete a roadshow today in New York and Bogota. Deutsche Bank, JPMorgan and Santander are managing the sale, which is Cencosud’s debut in USD.
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Santander Brasil Scoops Up Funds
Santander Brasil has extended the FIG issuance spree with a $650m in new 4.250% of 2016 bonds upsized from a planned $500m. The Baa2/BBB minus bank priced deal at 99.262 to yield 4.416%, or UST plus 250bp, in line with mid-200 whispers. The new bond fit well with the issuer’s curve, according to an EM-focused investor, who spotted about a 15bp-20bp new issue concession. This was based on an extension of the curve from the bank’s 2015, which traded about UST plus 200bp-205bp. The new bond was up slightly Monday afternoon, according to investors. Despite placing a 2015 just last year, a new 5-year made sense with the profile of the bank’s liabilities, according to a banker on the transaction. Deutsche Bank, Morgan Stanley and Santander managed the sale. The bank sold $850m in 5-year bonds through 2 sales last year, including its most recent public dollar bond sale, a $350m tap in November to yield 3.721%. The bank also recently raised $250m in 2016 bonds backed by electronic payment rights in a private transaction. Five-year bank deals are particularly trendy in the new year, with Bancolombia raising $500m in new 2016s last week, and Banco Cruzeiro do Sul set to land a 2016 as soon as this week.
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Pichincha Gets IDB Ecuador Loan
Banco Pichincha has closed a $22m syndicated loan, via the IDB, to help fund lending for housing and to support micro, small and medium sized enterprises. In 2008, the IDB closed a 6-year A loan for $50m. In 2010, Pichincha approached the IDB for the B loan, the development bank says. It adds that this is the first international syndication to an Ecuadorian financial institution in over a decade. “This transaction will contribute to boost international confidence in the Ecuadorian financial system and its capacity to contribute to economic development,” said Santiago Bayas, Pichincha’s vice president of treasury. Of the total, $10m came from Global Bank in Panama, $5m from Dexia Micro-Credit Fund, managed by BlueOrchard, $5m from Banco Aliado in Panama and $2m from Panama’s Multibank.
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Moody’s Sees Default Rate Falling
Moody’s expects the global speculative-grade default rate to drop to 1.9% by the end of this year, down from 3.1% at the close last year. “This projection is made under the baseline scenario, where the high yield spread is expected to fall and liquidity remains abundant,” says Moody’s. “This, of course, assumes that significant sovereign and financial problems will not develop in Europe.” The agency adds that if Europe slips into further chaos, the global default rate may reach as high as 6.1%. By sector, default rates are expected to be highest in the US consumer transportation sector and the European advertising, printing and publishing sector. The rate has compressed significantly since it hit 13.1% in 2009, up from 4.4% at the end of 2008. In the US, the speculative-grade default rate ended at 3.3% in 2010, down from 14.1% in 2009 and 4.9% in 2008. In Europe, the comparable rate closed at 1.9% in 2010, also down from 2009’s 11.3% and 2008’s 2.1%, says Moody’s. Comerci and Vitro are the only LatAm defaults it records from the last 12 months.
Posted inDaily Brief
CMPC Names New CEO
CMPC CEO Arturo Mackenna will leave the Chilean pulp and paper company, it says, and be replaced by Hernan Rodriguez. After 24 years as CEO, MacKenna will leave April 28. Rodriguez has been with CMPC since 1987 and serves as CEO of the Forestal Minico unit. CMPC does not give reasons for MacKenna’s departure, or what he will do after leaving.
Posted inDaily Brief
Correction: Credito Real Raising Local Debt
A January 7 Daily Brief entitled “Credito Real Raising Local Debt” incorrectly states the currency denomination on the deal. The bonds are denominated in Mexican pesos.
Posted inDaily Brief
Salfacorp Agrees to Acquire Tecsa
Chilean construction company Salfacorp says it has agreed to acquire privately held peer Empresas Tecsa. The buyer does not say how much it will pay for the target. Tecsa, which is controlled by Chile’s Binder family, in 2009 reported revenue of CLP192.5bn ($387m), which it says makes it Chile’s fourth largest construction company after Salfacorp, which is the largest, Besalco and Socovesa. Salfacorp says that due diligence is underway and that closing of the deal is expected by the end of April. Salfacorp’s shares jumped 7.5% after it announced the deal, closing at CLP1,914. The company does not name any financial advisors.
Posted inDaily Brief
Funds Flow into LatAm Equities
In the week ended January 5, LatAm equity funds had inflows of $707m, making it their best week since October, says EPFR Global. Investors sought exposure to Brazil’s commodities and the possibility that new president Dilma Rousseff will tackle some long-running structural issues. In the same week, flows into Brazil equity funds hit a 13-week high of $676m. However, Mexico equity funds, one of the few fund groups to set outflow records in 2010, suffered further redemptions worth $71m. Meanwhile, EM equity funds saw inflows of $3.3bn, kicking off the New Year with their best week, in flow terms, since mid-November, EPFR says. LatAm equity funds, however, saw performance deteriorate, losing 0.51% in the week ended January 6, according to Lipper. EM equities were up 0.77% and global small and mid-caps were up 0.21%.