Fondo Especial para Financiamentos Agropecuarios (FEFA) has priced a MXP6bn ($472m) domestic bond, upsizing from MXP5bn while getting 2.3x demand and its tightest spread yet. The largest trust under second-tier development bank Fideicomisos Instituidos en Relacion con la Agricultura (FIRA) priced the 2016 notes at TIIE+16bp, tight to 20bp-area indications. Participation came from 40 investors, including Afores, investment funds, insurance companies, and private banks, according to sources familiar with the sale. “This is a new issuer in the market that represents quasi-government risk and offers an interesting spread compared to other government owned entities,” says a participating Mexico-City based investor. FEFA plans to use proceeds to fund operations. BBVA Bancomer, Banamex and HSBC managed the deal, rated AAA on a national scale. FEFA is a trust operated by development bank Fideicomisos Instituidos en Relacion con la Agricultura (FIRA). Established in 1954 by Mexico’s federal government, FIRA offers credit and guarantees and other services to the livestock, fishing, forestry and agribusiness sectors in Mexico. In FEFA’s previous transaction, it sold MXP3bn in 2015 bonds at TIIE+20bp in October last year. A follow-up transaction could take place in the second half of the year or next year.
Category: Bonds
AMX Closer to Global MXP Retap
America Movil (AMX) is readying a reopening of its peso-denominated Titulos de Credito Extranjeros, possibly pricing as soon as today. Recently filed regulatory documents indicated today as the target date, though going ahead with the retap depends on final regulatory authorization and acceptable market conditions. AMX can sell up to MXP15bn ($1.18bn) of the 6.45% 2022 securities seamlessly placed with both domestic and international investors. BBVA Bancomer, Banamex and Credit Suisse are leading the transaction, with HSBC, Deutsche Bank and Morgan Stanley as passive bookrunners. The original MXP15bn sale in December drew more than MXP50bn demand, with the bond pricing to yield 6.45%, or Mbonos+93bp. The senior unsecured bonds are SEC and CNBV registered, denominated and settled in MXP, and trade on a fungible basis in the international markets and Mexico. They are rated AAA on a national scale and A2/A/A minus internationally. Separately, America Movil indicated it will take part in the EUR3bn ($3.98bn) equity rights offering being prepared by Dutch Telecom KPN. AMX will subscribe its proportion of the equity rights offering, but not participate in the EUR1bn sale of hybrid debt. In return for its support, AMX will add two members to KPN’s supervisory board, with their appointments effective April 10. America Movil purchased 27.7% of KPN last year.
Barclays LatAm Head Exits
Monica Hanson, head of global finance for LatAm at Barclays, has left the bank, according to a person familiar with the matter. She had been in the role, a post created at the time to encompass regional DCM, ECM and leveraged finance origination, since April of last year. She had previously been head of the bank’s US DCM financial institutions team. Hanson had been with Barclays since 2008, when it acquired Lehman Brothers, where she had worked since 2001. A Barclays spokesman declined to comment on the matter.
Brookfield Pulls Domestic Transaction
Brazil’s Brookfield Incorporacoes has cancelled registration for a planned BRL300m ($158m) domestic bond sale, it says. It does not give a reason. The developer had recently met with investors, planning a 2016 tranche paying DI plus up to 1.65%, and an inflation-linked 2018 piece paying up to 6.10%. Brookfield was seeking funds to repay debt and for working capital. JPMorgan and Itau were managing the deal, rated A+ on a national scale.
Fleury Captures Local Bond
Brazil’s Fleury has completed a BRL500m ($255m) domestic bond, it says. The medical services company’s 2020 debenture pays DI+0.85%, coming tight to a DI+1.0% limit. The bond amortizes in three equal parts during the final three years. Proceeds will fund investment needs. Bradesco and Itau managed the sale, done under the rule 476 restricted format.
BBVA Colombia Sells Domestic Bonds
BBVA Colombia has sold COP365bn ($203m) in inflation-linked subordinated bonds in the domestic market, according to a person following the sale, in an issuance that saw 1.94x demand. The bank sold COP200bn in 10-year bonds at IPC+3.60% and COP165bn in 15-year bonds at IPC+3.89%. The proceeds will be used for working capital. BBVA managed the sale, rated AAA on a national scale.
Digicel Back for LM, Raises $1bn
Digicel has returned for another round of liability management, raising $1bn in new 2021 NC3 senior unsecured bonds at the Digicel Limited unit, to replace existing 12% 2014 notes. Books for the largest wireless telecommunications carrier in the Caribbean were heard nicely oversubscribed before closing at 2:30pm Tuesday, allowing for an upsize from $700m. The B1/B deal priced at par with a 6.0% coupon, to yield in line with 6.0%-area guidance. The bonds were up 0.125 bid Tuesday afternoon, a trader says. “Not superb pricing for a single B, but not terrible either,” says a participating New York-based EM investor calculating fair value at 5.5%. The investor comped Digicel against US high-yield names like Level 3 Communications, and notes that Digicel’s 2020s traded at a 6.42% yield nearly flat to L3. Proceeds will be used to repurchase the entire tranche of Digicel Limited’s $510m 12% 2014 senior notes in a cash tender offer that launched Tuesday, with the rest of the funds for general corporate purposes. The Caribbean telecom is offering holders $1,038.00 per $1,000 through March 18, with those accepting before March 4 getting an extra $30 per $1,000. The transaction is favorable due to the extension of the 2014 debt maturity and comparatively lower coupon on the new notes, reducing interest expense, Moody’s says. “We believe Digicel will manage its adjusted leverage at between 4.5% and 5.0% total debt to Ebitda over the next two years given Ebitda expansion related to the continued success in its growing markets, and increasing cash flow contributions from operations in Haiti and Papua New Guinea,” the agency says. Digicel’s deleveraging could be tempered if the company uses debt funding to consolidate the remaining equity of its affiliate Digicel Holdings Central America that it does not own or for future acquisitions and capex, Moody’s notes. Citi, JPMorgan, Credit Suisse, Barclays, Deutsche Bank and Davy managed the sale. Citi is managing the tender. Digicel in
Facileasing Plans Local Issue
Mexico’s Facileasing is preparing to issue up to MXP1bn ($78m) in new bonds in the domestic market. The issuer is able to choose among a 2-year tranche paying a spread to the TIIE and a 7-year fixed-rate tranche. The transaction would represent the third issuance under a MXP10bn program. Proceeds will be used for general corporate purposes. BBVA Bancomer, who owns the Mexican vehicle fleet leasing company, is managing the sale. The deal is expected the week of March 4. Facileasing is rated AAA on a national scale.
Iguatemi Upsizes Domestic Bond
Brazilian shopping mall operator Iguatemi has upsized a domestic bond sale to BRL450m ($230m), according to offering documents, after getting 3x demand. The sale, originally planned for BRL400m, consists of two tranches. A BRL350m 2020 debenture pays DI+0.82%, and a BRL100m 2021 inflation-linked debenture pays 4.31%. The mall operator is raising funds for investments, including acquisitions. Bradesco, BTG Pactual and Santander are managing.
Belize Launches Debt Exchange
Belize has launched a debt exchange offer to holders of its 2029 bonds, under terms it announced last week, the government says. The deal opened Friday and closes March 8, and is contingent upon 75% acceptance. The government is offering new bonds due 2038, amortizing twice annually beginning August 2019. They would pay a 5.000% coupon stepping up to 6.767% in August 2017, versus the 8.500% on the current bonds. Accepting holders receive new bonds at a rate of $970.83 per $1,000.00 principal – equivalent to 90% of their holdings plus past due and accrued but unpaid interest. The offer follows two previous restructuring proposals from the government and a counterproposal from an ad-hoc group of bondholders representing at least $200m of the debt. The 2029 bonds have $544m outstanding. Settlement is expected March 20.