Banco do Brasil is planning to price a new 3-year yen-denominated bond as soon as Friday, according to sources familiar with the matter, reviving plans put on hold in late July. The size of the transaction has not been finalized. In July, it was heard looking at perhaps $500m-equivalent for up to 5 years. Bank of America Merrill Lynch, Banco do Brasil, JPMorgan, Mizuho and SMBC Nikko are managing the so-called Euroyen deal. The Baa1/BBB Brazilian bank issued $24m-equivalent in yen-denominated bonds in 1995, according to Dealogic.
Yearly Archives: 2012
Posted inDaily Brief
BTG Pactual Plans COP Issue
BTG Pactual plans to issue 5-year bonds denominated in Colombian pesos, according to Moody’s and Fitch, which assign respective Baa3 and BBB minus ratings. Specific timing and size have yet to be determined for the bond, expected to be issued via BTG’s Cayman branch. The notes are part of a global medium-term notes program of up to $3bn with proceeds destined to enable new business generation and for general banking purposes. BTG, Celfin Capital and Deutsche Bank have the mandate. A sale would be the first from a Brazilian in COP, according to Dealogic data, and the first global COP since Emgesa and Empresas Publicas de Medellin last year. BTG raised $500m in the dollar market last year. Ealier this year, the Brazilian bank agreed to buy Colombian brokerage Bolsa y Renta for $52m, as the bank continues to spend its IPO funds raised in April to expand outside of Brazil.
Posted inDaily Brief
CSN Turns to Local Markets
Brazil’s Companhia Siderurgica Nacional (CSN) is planning a BRL1.57bn ($777m) bond sale in the domestic market, it says. The steelmaker is part of growing list of large and traditionally cross-border issuers who are turning to Brazil’s local market as it becomes more attractive. The steelmaker plans two tranches, each maturing in 2015. In the sale, to be done under the rule 476 restricted format, CSN is raising funds to repay previous debt. It does not indicate the bank managing the sale, and officials do not respond to a request for comment.
Posted inDaily Brief
Cyrela Clinches Domestic Bond
Cyrela Brazil Realty has completed the sale of BRL400m ($197m) in the domestic bond market, according to Anbima. The developer’s 2017 bond pays the DI+1.2% and amortizes in at the end of the fourth and fifth years. Caixa Economica Federal managed the sale, done under the rule 476 restricted format.
Posted inDaily Brief
Entel Gets $400m Loan
Chile’s Empresa Nacional de Telecomunicaciones (Entel) has closed on a $400m, 5-year term loan, according to sources familiar with the transaction. The loan begins amortizing at three years, and pays Libor+130bp, with step-ups in years 4 and 5. The BBB+/BBB+/Baa1 club deal brings in BTMU, Mizuho, HSBC and Scotiabank at $100m each. The telecom will use the proceeds for capex and debt refinancing. In December 2011, Entel signed a $200m, 3-year bullet loan with Bank of Tokyo-Mitsubishi UFJ and Scotia paying Libor +100bp, also for debt refinancing.
Posted inDaily Brief
Investors Inflate Mexichem Books
Mexichem returned to the dollar market for $1.15bn after a 3-year absence, capitalizing on the scarcity value of Mexican coporates to draw $17bn in total demand. Pricing competitively to Braskem’s dollar curve, the industrial conglomerate issued 10 and 30 year tranches that were larger than expected, by $50m and $100m, respectively. A $750m 2022 bond priced at 99.206 with a 4.875% coupon to yield 5.000%, or UST+324.2bp, at the tight end of 5.250% initial guidance that followed 5.500% talk. A $400m 2042 year tranche priced at par with a 6.75% coupon to yield UST+384.8bp, at the tight end of 7.00%-area initial guidance. The 10-year bonds were up 1.25-1.50 points in the grey, and the 30-year traded up by 2-3 points, traders say. Investors compared the Ba1/BBB minus offering to Braskem’s (Baa3/BBB) 2022 and 2041 bonds, trading to yield around 5.17% and 6.84%, respectively. “Mexichem is tight, but maybe not so much in this environment, where everything is getting done tight because there is so much money sloshing around in the market. It will be interesting down the road when there is less money in the market to allow all these deals to come so tight,” says a California-based EM investor following the deal. “Mexichem fills in a nice sweet spot in the Mexican BBB space, but at current levels Mexichem should not be trading at par with Braskem, as Braskem has better ownership and more liquidity in its curve,” notes another market participant. US investors accounted for 60%-70% of the deal, Europeans about 20%, and Asians around 10%. Proceeds will be used to refinance debt, including the funding of a tender launched Friday targeting $350m outstanding in 8.750% 2019 bonds. In the offer expiring September 13, Mexichem is offering holders $1,245 cash per $1,000 principal. Citi, HSBC, JPMorgan and Morgan Stanley handled Wednesday’s transaction, and are also managing the tender offer and an equity follow-on expected to raise as much as $1bn.
Posted inDaily Brief
Oil Co Enters Paraguay Farm-in
UK-based President Petroleum has agreed to a farm-in agreement for two blocks in the Chaco region of Paraguay, at an expected total investment of $90m-$100m. The agreement allows for President to earn up to a 59% interest in the Pirity Block from Pirity Hidrocarburos, a subsidiary of PetroVictory, and up to a 60% interest in the Demattei Block from Crescent Global Oil Paraguay. President’s initial payment is funded through a $37m-equivalent private share offering managed by RBC and Jefferies, plus additional equity and a $15m revolving credit facility.
Posted inDaily Brief
RCO Reopens Mexico Road Securitization Market
Mexico’s Red de Carreteras de Occidente (RCO) has raised MXP8.12bn ($624m) in the Mexican bond market, pricing at the upper end of its MXP6bn-MXP8bn size objective after seeing 1.6x demand. In the first deal of its type in nearly a year, the concession operator priced a MXP2.84bn 15-year peso-denominated tranche with an 11-year average life at 9.0%, or Mbonos+340bp. A separate MXP5.28bn 20-year UDI-denominated portion with a 14-year average life came at 5.25%, or Udibonos+332bp. Investors and analysts had been expecting spreads around 270bp for each tranche prior to the transaction, though bankers claim the expectations were 330bp-350bp. Each tranche had a maximum possible MXP5bn size. The deal is rated AAA on a national scale and is backed by future toll road revenues and supported by a partial guarantee from government development bank Banobras. The bond market offers a good alternative to refinancing for RCO, which has significant syndicated loan debt, according to investors following the deal. Market conditions are also more favorable this year than last for issuing a securitization of this size and tenor, they add. BBVA Bancomer, HSBC, Inbursa and Santander managed the sale, with Goldman Sachs and HSBC as structuring agents. RCO raised MXP6.5bn in the CCD markets in 2009. The domestic market was able to place toll road securitization issuance last year, but not with size. Concesionaria de Autopistas del Sureste raised MXP3.5bn in October through 26.5-year UDI-denominated bonds priced at 6.0%. This followed a MXP1.71bn 2031 deal in April 2011 for OHL’s Gana subsidiary at 6.64%.
Posted inDaily Brief
Swiss Insurer Adds Mexican Surety
Swiss insurer Ace has agreed to buy Mexican surety bond specialist Fianzas Monterrey from New York Life, it says, paying $285m cash. The deal expands Ace’s presence in Mexico, adding to commercial property and casualty, accident and health, and life insurance operations. The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to be completed during the first quarter of 2013. New York Life is shedding Fianzas, which it bought in 2000 from Aetna and Bancomer, because it is a non-core business. Established in 1943, Fianzas provides guarantees on construction and industrial projects, and is Mexico’s second-largest surety provider. Goldman Sachs advised New York Life.
Posted inDaily Brief
UK Shop Invests in Brazilian English Lessons
London-based private equity firm Actis has agreed to invest $68m in Brazil’s CNA, an English language training provider, it says. Part of the investment comes from Actis 4, its new global fund. CNA is looking to double in size via organic growth and acquisitions. Actis also has invested in Brazil’s Universidade Cruzeiro do Sul.