Panama’s Banco General has sold a $10m piece out of $250m in dollar-denominated 6.5% coupon perpetual bonds in the local market, says a source at the bank. The perps are callable after 5 years but maintain their 6.5% coupon permanently. The deal is the first perpetual bond done by Banco General in any market. BG Investment, the bank’s capital markets unit, is managing the sale.
Category: Daily Brief
Posted inDaily Brief
Castano Departs UBS DCM
Antonio Castano, executive director in the LatAm DCM group, has left UBS, according to a source at the company. Castano, a former deputy general director of public credit in Mexico, joined the Swiss bank in early 2004. The recent departure leaves Marcelo Delmar as the only senior person left in the shop’s DCM group following various rounds of departures that saw the exit of Nadine Cavusoglu and Jorge Barreda earlier this year. As with most other firms, the bank is downsizing its debt team in line with anticipated shrinkage in issuance volume next year.
Posted inDaily Brief
Ecopetrol to Invest $6.2bn in 2009
Ecopetrol says it will invest $6.2bn in 2009, a 35% increase from its capex in 2008, when it spent $4.6bn. Out of the total, $214m corresponds to projects already underway in the year 2008, the company says. About $1bn will go to exploration and new ventures, $2.7bn to production, $814m to refining and petrochemical activities, $598m to transport, $870m to acquisitions and $178m to other activities, such as energy diversification projects to produce ethanol out of sugar cane, the company discloses. An Ecopetrol spokesman adds that by the end of 2009, the company may try to get up to $1bn in financing, but he does not state how the rest of the capex will be financed.
Posted inDaily Brief
Cabei Taps TWD
Cabei priced this week a TWD1.3bn ($40m) 2-year fixed rate bond in the local Taiwan market at par to yield 2.60% from a TWD7bn program. The transaction followed investor meetings in Taipei with both existing and new accounts. Taiwan is a member country of Cabei and of strategic importance to the Central American multilateral financial institution, which has now issued five times in TWD since 1997. Cabei is rated A2/A minus. Settlement is December 29 and maturity December 29 2010. HSBC was sole bookrunner.
Posted inDaily Brief
Endesa Goes Long in UF
Chile’s state-owned electricity company Endesa has issued $332m equivalent (UF10m) in 21-year inflation linked 4.75% coupon bonds at 99.33 to yield 4.81%. The issuer was also considering selling 5 and 10-year notes for a maximum UF10m size, but placed the whole deal at the long end. “Demand at better pricing, curiously enough, was at the longer tenor,” Santiago-based BBVA director Alejandro Bertrand tells LatinFinance. “Endesa is a safe haven for Chilean investors,” he adds. Bertrand says that the spread was some 161bp over the government curve, versus a 175bp target when the issuer first went out. “This is almost double what they were paying a year ago,” adds the banker on the deal, who says it was slightly oversubscribed. AFPs consumed 60%-70% of the offer, while life insurance companies took roughly 30%, with the remainder going to brokers, banks and mutual funds. Total demand was UF12.15m, says Bertrand. The locally placed notes amortize in equal biannual installments starting June 15 2019 and are callable in December 2011 at a make whole of 70bp. Feller Rate and Fitch gave the deal an AA minus rating. BBVA was the lead and proceeds are earmarked for refinancing short and long term debt. The BENDE-M series auction was done Thursday by electronic Dutch auction. According to Bertrand, there is still demand in local markets, aided by the fact that the captive domestic investor base is repatriating funds following overseas losses. “There is money for good names,” he adds. Chile’s pension funds have roughly $100bn in assets.
Posted inDaily Brief
Cencosud Keeps Chile Bonds on Ice
Chilean retail conglomerate Cencosud has put a bond issuance on hold, a company spokeswoman tells LatinFinance. “The company filed to issue the bonds, but there are no plans to issue them,” says a banker on the deal, who declines to comment on reasons for the delay. A Santiago-based banker not on the deal says he believes the issue will happen in January. Celfin Capital is the lead. Documents filed with the Superintendencia de Valores y Seguros show that Cencosud filed to issue up to UF6m ($210m) in 4 series. Series G will have an interest rate of 4.7% amortizing in 2016. Series H, amortizing in 2019, has an interest rate of 180-day Libor plus 2.5% and is callable starting October 15 2013. Series I, amortizing in 2017, has an interest rate of 4.7% and is also callable October 15 2013. Series J has an interest rate of 4.8% and amortize in 2029. It is callable October 15 2018.
Posted inDaily Brief
Mexico Dazzles With Surgical Strike
Mexico has cracked open the international bond markets for EM issuers with a tightly priced $2bn 10-year benchmark that takes out much of 2009 funding needs. The surprise surgical strike on markets assumed to be firmly shut for LatAm breathes life into fixed income and could spur fresh high grade activity in early 2009. The Global 5.950% of 2019 priced at 99.784 to yield 5.980%, or 390bp over UST and was heard trading at 100.25 (385bp) late Thursday. Guidance was 400bp area and the deal was executed at just 40bp above the 2017 – according to the leads – versus expectations of at least a 50bp concession taking into account recent US high grade pricing. Bankers away from the Baa1/BBB+ deal had expected the first LatAm issuers back to pay 60bp-100bp, but UMS was helped by recent firming in US fixed income and a relatively solid reputation. “The market was really at its peak and we also saw that in the sovereign space,” says Elizabeth Dennis, head of LatAm syndicate at Morgan Stanley, joint lead on the deal with Goldman Sachs. “It’s a great signal, everyone has been waiting for the EM market to reopen.” Mexico also benefits from scarcity value. It was last in the market in January with a new $1.5bn 2040 bond priced at 99.930 and 6.050% coupon to yield 6.055%. JPMorgan predicted in October that UMS would not issue at all in 2009, when it will make coupon and amortization payments of just over $8bn. Buyers of Thursday’s deal were 60% from the US, 35% LatAm (mainly Mexico) and 5% Europe. The bulk was dedicated EM, with some cross-over high grade, according to Dennis, who adds that the transaction covers most of Mexico’s 2009 funding requirements. There is a make whole call at UST+50bp and maturity is March 19 2019. Bankers at rival shops tip their hats to the first major bond issuance in months. “They should be extremely happy,” says a senior DCM official. “It shows the market is hungry for sovereigns,” adds the banker, saying that the transaction bodes well for LatAm volu
Posted inDaily Brief
IDB Lends $2bn to Mexico
The IDB has approved a $2bn credit line for Mexico to help it reduce poverty levels. An initial loan of $200m within the conditional credit line for investment projects will be provided. It is for a 25-year term with a 2-year grace period, at an adjustable interest rate based on Libor. Mexico’s Sedesol will carry out the program through the national Oportunidades coordination board. This operation is the third to Mexico for Oportunidades since it was launched in 1997. Two previous IDB loans totaled $2.2bn, says the bank.
Posted inDaily Brief
Kinross Buys Chile Miner
Kinross Gold says it has completed the acquisition of a 40% interest in Minera Santa Rosa from subsidiaries of Anglo American for $140m in cash. It is buying the other 60% of the Chilean miner for 5.6m of its own common shares plus a cash payment of about $40m from Teck Cominco. In the deal with Teck, Kinross will also pay a 1.75% net smelter returns royalty on 60% of future production, payable when the gold price is $760 per ounce or more. The deal with Teck is expected to close before the end of the year. Morgan Stanley and Scotia Capital advised Kinross.
Posted inDaily Brief
Telefonica Pursues Remaining CTC Shares
Spain’s Telefonica, which already owns a 96.75% stake in Chile’s CTC, is offering to buy the 31m shares it does not already own in the company and is extending its offer until January 6. Previously, the offer was set to expire December 31. Telefonica will pay CLP1,100 for each series A unit, of which there are about 28m, and CLP990 for each series B share, of which there is roughly 3m. Santander is advising Telefonica.