BBVA Chile is now targeting early next year for its entrance into the Mexican bond market, a deal it had aimed to do this month, says a banker on the deal. The bank hopes to raise MXP1.5bn ($111m) in 3-year floating rate bonds, targeting pricing of around TIIE+60bp. Chilean peer Banco de Chile recently priced a MXP1.5bn 3-year at the same level. BBVA Chile would become the fourth Chilean issuer to tap Mexico’s domestic market, and is looking for an alternative source to raise funding for the bank’s operations. BBVA Bancomer is leading the transaction, rated AAA on a national scale.
Category: Chile
Posted inDaily Brief
Cencosud Names Retail Finance Head
Patricio Rivas de Diego has been named head of the retail finance division at Chilean retailer Cencosud following the departure of Roberto Pirozzi Alonso. Marcelo Reyes Sangermani will step in for the time being as corporate risk manager, taking over Rivas de Diego’s previous position.
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High Spreads Put Chilean Issues on Hold
Several Chilean issuers are holding off domestic bond transactions until next year in the face of comparatively high spreads. For instance, Caja de Compensacion La Araucana is now targeting next year for a CLP40bn ($77m) 5-year bond, which had been expected as soon as December. Like other Chilean issuers, La Araucana has decided to wait until next year with the hope that it can lock in cheaper pricing then. As the company doesn’t have a pressing need for the funding, it can wait, says a person familiar with the process. BCI is managing the sale. Araucana is rated A on a national scale. Quinenco has also postponed its up to UF4.65m ($200m) local market bond offering, which was previously expected to price by month’s end. It is instead looking at the beginning of January, says a person knowledgeable about the transaction. The holding vehicle for the Luksic family is preparing a 7-year bond of up to UF2.3m in size with a 3.5% coupon and 2-year grace period, and a 21-year bond of up to UF2.3m with a 4% coupon and an up 15-year grace period. It will use the proceeds for its investment. Banchile and BBVA are managing.
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Forum Delays Expected Issue
Chilean auto lender Forum has delayed its approximately UF1m ($42.7m) local bond issue until at least January, says CEO Raul Aronsohn. The company, which was expected to issue this week, had anticipated better market conditions, but high local spreads have made a 2012 issue more attractive for a borrower that can afford to wait, he says. The borrower can choose between a 2.5-year bullet in pesos with a 6.15% coupon, a 5-year bullet in pesos with a 6.3% coupon, a 2.5-year bullet in inflation-linked UFs with a coupon of 3.3% and a 5-year bullet in UFs with a 3.3% coupon. However, Aronsohn says he favors pesos. “If we go to UF we have to swap them against pesos after that, so we prefer to go straight ahead to pesos,” he says. Banco Estado de Chile is managing the issue, rated AA+/AA on a national scale.
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Agrosuper Raises Local Bond
Chilean food products company Agrosuper has sold UF5m ($215m) in domestic bonds, it says. The 21-year bonds priced at 89.76 with a 3.8% coupon to yield 4.78%. Banchile and LarrainVial managed the sale, rated AA minus/A on a national scale.
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Essal Pulls Plug on Equity Sale
Corporacion de Fomento de la Produccion (Corfo) pulled the plug on an $80m-$90m offering of shares in water utility Essal after the sale process failed to clear a minimum floor price. The government financial entity is looking to sell 40% of Essal to get its position down to 5%, and had been planning to place 387.7m secondary shares at CLP90-CLP100 per share. It was to be repeat, though at a smaller size, of what Corfo did earlier in the year with its positions in Aguas Andinas, Essbio and Esval, under a broad government plan to sell assets to cover reconstruction costs from the 2010 earthquake. It is not known if Corfo might seek an M&A transaction for the stake, a move it was heard considering before electing a follow-on sale. Banchile, Bank of America Merrill Lynch and IMTrust were managing.
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Chile’s Forum Preps Local Issue
Chilean auto lender Forum is readying an approximately UF1m ($43m) local bond issue this week, says a person familiar with the process. The company can choose from a 2.5-year bullet in pesos with a 6.15% coupon, a 5-year bullet in pesos with a 6.3% coupon, a 2.5-year bullet in inflation-linked UFs with a coupon of 3.3% and a 5-year bullet in UFs with a 3.3% coupon. Banco Estado de Chile is managing the issue, rated AA+/AA on a national scale.
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Essal Set for Share Offering
Chile’s Essal is scheduled to announce pricing today on an up $80m equity offering as government entity Corporacion de Fomento de la Produccion (Corfo) looks to reduce its 45% position in the water utility. The issuer is targeting CLP90-CLP100 per share for the 387.7m secondary shares, indicating a likely size of CLP34.89bn-CLP38.77bn ($67m-$75m) The all-local sale is essentially an IPO, as Essal shares are illiquid, and the company is much smaller than the other government-backed water utilities that have come to the market this year. Corfo had also been considering a direct sale of a stake through an M&A deal, as it looks to get its position down to 5%. The sale is a repeat, though at a smaller size, of what Corfo did earlier in the year with its positions in Aguas Andinas, Essbio and Esval, under a broad government plan to sell assets to help with reconstruction costs from the 2010 earthquake. Banchile, Bank of America Merrill Lynch and IMTrust are managing the sale.
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SQM Preps Local Debt Issue
Chilean chemical company SQM plans to raise up to UF2.5m ($107m) through a domestic bond issue. It will have the option of choosing among 10-year and 30-year UF-denominated notes. Proceeds will cover liabilities, investment financing and other general purposes. The issuer, rated AA minus on a national scale, does not name the lead banks or provide timing on the sale.
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Agrosuper Holds Bond until Tuesday
Chilean food products company Agrosuper has pushed back to Tuesday its local bond as various factors conspire to slow down an up to UF5m ($235m) offering that was expected today. Fallout from the La Polar scandal has generally lengthened the time it takes investors to get credit approval, but recent accusations of poultry price collusion against Agrosuper and others haven’t helped either. Indeed the news could costs the borrower a few basis points even though any fine is likely to be comparatively small and unlikely to be imposed for quite some, say people familiar with the situation. Furthermore, investors sometimes need more time to familiarize themselves with companies such Agrosuper that have no outstanding public debt. Among the issuer’s options are a 7-year UF bond with a 3.4% coupon, a 7-year peso issue with a 6.1% coupon, a 10-year UF bullet with a 3.4% coupon and a 21-year UF offering with a 3.8% coupon. Banchile and LarrainVial are managing the deal, rated AA minus/A on a national scale.