Mexico’s Instituto Fonacot is preparing to raise MXP1bn ($77m) through a second reopening of its 2014 bonds in the domestic market. The Mexican state-run lender priced the original MXP1.67bn 3-year bonds at TIIE+65bp in December 2011, and in March emerged for another MXP1.15bn at the same spread. A 15% greenshoe is possible. Scotia and BBVA Bancomer are managing the transaction, rated AAA on a local scale.
Yearly Archives: 2012
Posted inDaily Brief
Mexichem Launches Tender
Mexichem has launched a cash tender offer targeting its $350m outstanding in 8.750% 2019 bonds, it says, ahead of what is expected to be a $1bn sale of new 2022 and 2042 bonds this week. The chemicals producer is scheduled to meet today and Tuesday with investors in London, New York, Los Angeles and Boston. The issuer plans a $700m 2022 bond and $300m 2042 bond, according to rating agency reports assigning Ba1/BBB minus/BBB minus ratings to the proposed deal. In the tender, Mexichem is offering holders $1,245 per $1,000 cash, which includes a $30 consent payment to holders that tender and adopt proposed covenant amendments before the September 13 deadline. Moody’s moved the outlook on Mexichem to positive from stable due to the refinancing, noting the credit’s strong credit metrics, improved business profile and relatively strong industry conditions in its major Latin American markets. Proceeds from this week’s bond sale will be used to fund the tender and to refinance other debt, including $600m borrowed under a $1bn revolving credit facility. Citi, HSBC, JPMorgan and Morgan Stanley are handling the tender offer, the new bond sale, and an upcoming equity follow-on expected to raise as much as $1bn.
Posted inDaily Brief
Mexico Holds Rates
Mexico’s central bank has again held the policy rate, which has been at 4.50% since July 2009. Citi notes “a slightly more hawkish stance” from the bank, citing that “in particular, the board opted for changing the wording of its policy paragraph by stating that it will remain watchful of inflation determinants as they ‘may make advisable’ to hike the policy rate.” Nomura, however, calls the hawkish tint a bluff. “A scenario of hikes, with the US economy decelerating, is very unlikely,” it says.
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S&P Revises Guatemala Outlook
S&P has revised the outlook on Guatemala’s BB rating to stable from negative, it says. The agency highlights the potential for debt stabilization at 20% of GDP in 2014. GDP growth and tax revenue developments could help the republic’s finances going forward, says S&P, which in August 2011 took the outlook to negative alongside comments that increased political polarization was hindering needed fiscal reform amid low tax revenues and an increasing interest burden.
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Santander Brasil Adds Greenshoe
Santander Brasil has added $50m to Thursday’s reopening of its 2017 bonds, bringing the total to $550m. The Asian market addition drew more $300m in demand, according to sources familiar with the transaction. The bank reopened the Baa1/BBB 4.625%-coupon bonds Thursday at 101.291 to yield 4.30%, or UST+362.5bp. Bank of America Merrill Lynch, Credit Agricole, Santander and Standard Chartered managed.
Posted inDaily Brief
CFR Eyes Domestic Issue
CFR is expected to issue in Chile’s domestic bond market before the end of the year, assuming stable conditions, according to sources familiar with the Chilean pharmaceutical company’s plans. The issuer has registered an issuance of up to UF4m ($190m), with tranches of up to 10 and 30 years. It would be the Chilean pharmaceutical company’s first bond issuance. Proceeds could be used for planned M&A activity. IMTrust and Santander are managing. CFR is rated A+ on a national scale.
Posted inDaily Brief
Colombia’s Popular Set to Issue
Banco Popular will look to issue COP250bn ($139m) in Colombia’s domestic bond market, with the ability to upsize to as much as COP400bn, according to a source familiar with the transaction. In the sale expected September 19, the Colombian bank can choose from fixed-rate 18-month, 2-year, and 3-year tranches as well as a 5-year inflation-linked tranche. Popular will self-lead the deal, rated AAA.
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CR Refiner Looks for Debt
Costa Rican state oil refiner Recope is preparing up to $200m-equivalent issuance in the domestic and other Central American bond markets, it says. After receiving regulatory approval, the issuer plans a $50m tranche this year, and the remainder next year and 2014. The proceeds will be used in the development of several projects, including expansion of the Moin terminal. The issue is rated AAA on a national scale.
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EM Debt Books Inflows
EM debt funds booked net inflows of $679m during the week ended September 5, according to EPFR. In terms of performance, the asset class was up 0.85% for the week ended September 6, for a year-to-date gain of 12.63%, according to Lipper. Global income funds gained 0.28% during the week, and are up 5.78%% ytd. International income funds rose 0.53% during the week, for a 5.11% gain ytd.
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Equity Funds Shed Cash
LatAm equity funds saw net outflows of $62m while EM equity funds saw net outflows of $1.78bn during the week ended September 5, according to EPFR. In terms of performance, LatAm funds gained 2.72% during the week ended September 6, and are up 3.79% year-to-date, according to Lipper. EM funds rose 1.85% during the week, to bring them to a ytd gain of 7.41%. Global small and mid-cap funds rose 2.94% on the week, and have earned 11.84% ytd.