Banco Davivienda is expected to issue COP400bn ($224m) in Colombia’s local bond market today, according people familiar with the transaction. The bank, which has the ability to upsize to COP500bn, is able to choose among a 3-year fixed-rate tranche with a maximum interest rate of 5.5%, an IPC-linked 10-year tranche with an interest rate of IPC+3.5%, and an IPC-linked 15-year tranche with an interest rate of 3.80%. Davivienda’s own brokerage arm will manage the transaction, rated AAA on a national scale. Davivienda’s previous domestic sale last year raised COP500bn – including COP96m in 2015 bonds at 6.52%, COP174bn in 2022s at IPC+4.07%, and COP230bn in 2027s at IPC+4.23%. It has also made use of the international bond market this year, raising $500m in 2018 bonds at a 3.0% yield.
Category: Bonds
FEFA Meets Investors
Mexico’s Fondo Especial para Financiamentos Agropecuarios (FEFA) has started meetings with domestic bond investors, ahead of a transaction expected to raise MXP5bn ($393m), according to people familiar with the company’s plans. The meetings run through Thursday, with the sale expected February 20. The lender to the agriculture sector is targeting a 2016 floating-rate bond that will represent its third-ever domestic market issuance. FEFA has filed to issue up to MXP6bn, with expectations that the deal will be around MXP5bn. Proceeds will be used to fund its operations. BBVA Bancomer, Banamex and HSBC are managing 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.
Mexican Toll Road to Retry Bond
The Monterrey-Saltillo toll road is scheduled to sell up to MXP4.5bn ($354m) in Mexico’s domestic bond market on February 26. The concession owned by Spain’s Isolux-Cosan had been looking to issue in December, but elected to wait. It is aiming to price the 2038 UDI-denominated notes at UDIbonos+390bp. Proceeds will be used to repay bank loans and subordinated debt with the government Fonadin fund. Santander, ING and Bank of America Merrill Lynch are bookrunners on the transaction, rated AA/AA+ on a national scale. The toll road has been operational for almost a year.
Sempra Mexico Sale Broadens Domestic Market
Sempra Mexico has priced a MXP5.2bn ($412m) domestic bond sale, the local market’s first transaction from a non-government energy sector issuer. The Mexican unit of US-based Sempra Energy priced in line with expectations and was thought to give domestic institutions a 10bp pickup to government-owned Pemex. A MXP1.3bn 2018 floating-rate tranche pays TIIE+30bp and a MXP3.9bn 2023 fixed-rate tranche pays 6.30%, or Mbonos+125bp. The long tranche offered 10bp premium to where a new Pemex 10-year would price in the domestic market, say people following the sale. “The deal priced at fair value,” says a Mexico City-based participating investor, noting the 2023 offered the pickup to Pemex and priced in line with his Mbono+125bp-130bp estimates. While official price talk was not disclosed, analysts away from the deal expected the floater to price at TIIE+20-25bp and the fixed at Mbono+120-125bp. Total demand topped 2.5x, driven mostly by Afores, insurance and pension funds on the fixed portion and private banking, insurance and mutual funds on the TIIE tranche. Deutsche Bank, Credit Suisse and Santander managed the transaction, rated AAA/Aaa on a national scale. In October, Sempra Mexico won a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora, which should require a $1bn investment including proceeds from the bond sale, according to ratings agency reports. Sempra operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts.
Surtigas Raises Local Bonds
Colombia’s Surtigas has sold COP200bn ($112m) in domestic bonds, with demand reaching COP327bn, according to documents published after Tuesday’s sale. The gas distributor sold COP130bn in 2023 bonds at an interest rate of IPC+3.25% and COP70bn in 2033 bonds at IPC+3.64%. The issuer is raising funds to repay debt. Corficolombiana is structuring agent and lead bookrunner, with Casa de Bolsa along as a bookrunner. This is the company’s second domestic bond issuance, and first since a COP60bn deal in 2004. Elsewhere in the Colombian local market, Banco Davivienda is preparing a sale for today and Findeter plans to raise debt on Friday.
J&F Postpones Bond
J&F Participacoes has postponed the sale of a 2020 NC3 bond due to unfavorable market conditions, according to people familiar with the transaction. Last week saw a break from the favorable conditions that welcomed several LatAm high-yield issuers, as Brazil’s Schahin Oil and Gas also postponed. The Brazilian holding company for various businesses including meatpacker JBS had been looking for a yield in around 9.75%. Barclays, Banco do Brasil, Morgan Stanley and Santander were managing the B/B+ sale, which would have been its first in the international market, according to Dealogic data. J&F has holdings in pulp production, dairy, home and personal care products, beef, financial services, infrastructure and energy.
Minerva Wraps up Tender
Minerva is set to buy back $11m (32%) of its 9.500% 2017 notes, $318m (85%) of its 10.875% 2019 notes and $320m (71%) of its 12.250% 2022 notes, it says, following a cash tender offer that closed Friday. Accepting holders receive $1,075 per $1,000 principal of the 2017s, $1,170 per $1,000 of the 2019s and $1,232 per $1,000 of the 2022s. Those agreeing before the January 25 early deadline got an extra $30 per $1,000. The Brazilian meatpacker is funding the tender with proceeds from an $850m 2023 NC5 new bond sale it held last month. BTG Pactual, HSBC and Credit Suisse managed both the tender and new sale.
Sempra Ready for MXP Debut
Sempra Mexico is scheduled to issue up to MXP5.2bn ($412m) in Mexico’s domestic bond market today. The Mexican unit of US-based Sempra Energy is able to choose among a 2018 tranche paying a spread to the TIIE and a 2023 fixed-rate tranche. A deal would not only be the issuer’s first, but would also represent the first domestic bond from a non-government energy sector issuer. CFE and Pemex – the government-owned energy sector companies that are regular domestic issuers – offer pricing reference points. The deal is expected to offer a pickup to the two, according to people following the sale. Deutsche Bank, Credit Suisse and Santander are managing the transaction, rated AAA/Aaa on a national scale. In October, Sempra Mexico won a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora, which should require a $1bn investment including proceeds from the bond sale, according to ratings agency reports. Sempra operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts.
Surtigas Set for COP Sale
Surtigas is scheduled to sell up to COP200bn ($112m) in Colombia’s domestic bond market today, according to people familiar with the Colombian gas distributor’s plans. It is expected to issue tranches of 10 and 20 years, with maximum interest rates of IPC+3.70% and IPC+4.05%, respectively. The issuer is raising funds to repay debt. Corficolombiana is structuring agent and lead bookrunner, with Casa de Bolsa along as a bookrunner. This is the company’s second bond issuance, and first since a COP60bn deal in 2004. It is shaping up to be an active week for the Colombian local bond market. Banco Davivienda is preparing a sale for Wednesday and Findeter plans to raise debt on Friday.
Airport Operator Plans Domestic Bonds
Grupo Aeroportuario Centro Norte, or OMA, is preparing a bond sale in Mexico’s domestic market, according to regulatory documents. The plan is for a MXP1.5bn ($118m) 2023 bond. OMA is raising funds to repay short-term bank debt. HSBC and Banamex are managing the sale. OMA is rated AA+ on a national scale. The concessionaire’s most recent domestic bond was its first, a $111m-equivalent 5-year paying TIIE+70bp sold in 2011.