The board of Bancolombia has approved an international bond issue of up to $1.2bn, the bank says in a regulatory filing. The Colombia-based lender plans to issue subordinated notes for up to 10-years, it says. Proceeds of the international notes would be used to support lending operations.
Yearly Archives: 2012
Posted inDaily Brief
Belize Bondholders Seek Key Details
The Coordinating Committee of Belize Bondholders will conclude that the central American nation does not face debt sustainability issues – contrary to the government’s central claim – if authorities do not make available additional details of its national accounts, the ad hoc group says in a statement. The committee says it needs the information to wrap up its initial evaluation of the government’s fiscal projections in advance of a meeting with officials in which agreement will be sought on a fair analysis of debt sustainability. “In the absence of complete disclosure from the country, the committee views the IMF Article IV report published last December, in consultation with the government of Belize, as the definitive active financial analysis for Belize,” the committee says. “That report did not highlight a debt sustainability concern, and the committee is seeking to understand the key assumptions underlying Belize’s current DSA and the basis for why it differs so materially from the IMF’s analysis.” Mike Gerrard, the ad-hoc group’s financial advisor and Managing Director at BroadSpan, says: “Contrary to some recent reports, we have been in a fairly continuous dialogue with Belize’s financial advisors for several months. We do however, need to receive from the government the information necessary to complete our analysis before meaningful discussions can take place.” The government of Belize entered a 30-day grace period following its failure on August 20 to make a $23.1m coupon payment on $543.8m in outstanding 2029 “super bonds”. The bondholder committee represents almost 60% of the outstanding size of the super bond, or more than $325m of the outstanding super bond debt. The bonds were trading Tuesday at 37-38 cents on the dollar.
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Brazil Rate Cut Expected
Brazil’s central bank is expected to cut its Selic rate today by 50bp to a new record low of 7.50%. In July, Banco Central do Brasil cut its benchmark rate from 8.5% to 8.0%, a record. “The main uncertainty lies with October’s meeting from which we expect a final 25bp cut of Selic rate while many analysts forecast Copom will remain on hold,” says Citi in comments ahead of the decision. The statement that follows today’s meeting should provide some indication of the likely future direction of interest rates, Citi notes.
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Celulose Irani Cancels Follow-On
Celulose Irani, the maker of paper, packaging and resins, has withdrawn its plans to raise funds through an equity follow-on due to market conditions, it says. The Brazilian company had plans to sell both primary and secondary units in a sale that was seen almost as an IPO, given the relative illiquidity of the outstanding shares. Itau and Credit Suisse were managing.
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ECM Expectations Mild
Equity capital market volumes have undershot 2011’s disappointing numbers so far this year, but bankers are holding out for a September pickup with a number of transactions in the pipeline. Total issuance plummeted 45% year on year through the end of July. But Daniel Darahem, head of LatAm ECM at JPMorgan, tells LatinFinance that despite this: “If market conditions allow it, we expect a strong pipeline of multi-billion dollar transactions for the second half.” Issuers are already lining up, most notably Santander Mexico’s $2bn-$4bn IPO. Cemex could follow with the carve-out of its ex-Mexico LatAm assets, a deal seen raising as much as $1bn.
Bankers say a large, oversubscribed deal that went on to trade well – ideally helped by a more supportive global environment – would help turn the tide for the market. “There should be a pickup in the second half for equity. It won’t be as bad year-end as it is now,” says Alberto Pandolfi, head of LatAm M&A at Citi, tells LatinFinance. “The Andean region is very attractive. In Peru there isn’t a single stock to play the consumer sector – it just doesn’t exist. There will have to be companies taking advantage of this to finance themselves. There is going to be huge appetite for this, and in Colombia too,” he adds. Through August 24, regional volume stood at $11.74bn from 48 deals, according to Dealogic, compared $25.43bn from 63 in the corresponding period in 2011. BTG Pactual leads with $1.36bn from 13 deals, followed by Citi ($1.08bn from 6) and JPMorgan ($1.02bn from 6). BTG earned the most, $26m, or 11.2% of the pool. “It’s been the most challenging year we’ve had in five years. These companies will need capital. It’s a matter of when. Markets don’t stay closed forever and at some stage you will have windows,” says a Sao Paulo-based banker.
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Finandina Issues Bonds
Colombia’s Banco Finandina concluded a COP200bn ($110m) issuance program Tuesday, pricing a COP27.6bn private placement maturing May 2015, at 100.061 with a DTF+1.99% yield and spread of 220bp over fixed-rate government bonds with the same maturity. Corredores Asociados, Correval, Interbolsa, Bancolombia, Casa de Bolsa and Serfinco led the transaction, say sources familiar with the deal. The transaction, which saw over 3x demand, completes a program that began last August with COP72bn, followed by COP100.5bn in May. In August 2011, Finandina’s issue saw some COP97bn in demand. It sold a COP41bn 2013 tranche paying the IBR+2.09%, a COP12bn 2014 piece paying IBR+2.50%, and a COP19bn 2016 inflation-linked portion paying 4.20%. In May, it issued a COP64.7bn 2015 series paying DTF+1.85%, a COP12.3bn 2016 series paying DTF+1.99%, and a COP23.5bn 2015 series paying IBR+1.84%. The bonds are rated AA on a local scale.
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Mexichem Seeks Equity, Debt Sale
Mexican industrial conglomerate Mexichem has taken initial steps in a financing plan that would consist of $2bn in equity and debt, the company says, as it seeks to refinance existing debt and address working capital. It aims to raise $1bn via a capital increase and a separate $1bn portion in USD long-term debt. Pending National Banking and Securities Commission (CNBV) and Mexican Stock Exchange (BMV) approval, Mexichem would pursue a primary public offering among investors in Mexico, with distribution in other markets abroad, while the debt portion would be issued in the international bond market. “The company will call an extraordinary general shareholders’ meeting where the corresponding capital increase shall be proposed, as shall the suggestions that it be made through a public offer. Should it be approved, the existing shareholders will not have a preemptive right,” it says. The proposed deals are subject to various approvals and suitable market conditions.
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Miner Names CFO
South American Silver has named Matias Herrero full-time CFO at the company. He replaces part-time CFO William Filtness, who takes on a new role as consultant to the Vancouver-based mineral exploration company. The appointment is part of an anticipated management change, the company says. Herrero previously worked as CFO at gold producer Rusoro Mining and has experience in international arbitration, mergers and acquisitions, debt and equity financings. Earlier this month, Gregory Johnson left his role as president. and CEO to pursue other interests. South American Silver has projects in Chile and Bolivia.
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Sodimac to Issue
Sodimac plans to issue up to COP300bn ($164m) in Colombia’s domestic market today. The home improvement unit of Chilean retailer Falabella can choose from a 5-year tranche with an interest rate of up to 6.90%, a 5-year tranche with an interest rate of up to IPC+3.80% and a 10-year tranche with an interest rate of up to IPC+4.20%. It plans to use proceeds to refinance debt and pay for expansion plans. Bancolombia and Correval are managing the deal, rated AAA on a local scale.
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Santander Chile Lands Zero Coupon Bond
Santander Chile priced a zero coupon bond last week on the back of reverse inquiry. An $85.9m 2013 bond priced at 98.574 or spread Libor plus 100bp. DB, JPM and Santander managed the transaction, rated A/A+.