Mexico’s Coca-Cola Femsa (KOF) is heard readying investor meetings ahead of a possible return to the bond markets. Citi, Goldman Sachs and JPMorgan are managing the process, say people familiar with the Mexican bottler’s plans, though no specifics were available Monday. A deal would be the first since 2010, when KOF printed a $500m note after a 14-year international DCM hiatus. The issuer upsized that sale from $400m, getting a 4.689% yield via Bank of America Merrill Lynch and Goldman. In April 2011, Coca-Cola Femsa issued $427m-equivalent in the local bond market, in a 5-year floating rate and 10-year fixed rate transaction. Since then it has been focusing on buying, with the acquisition of Mexican Grupo Yoli for $700m last month and a 51% stake in Coca-Cola’s Philippines bottling unit for $689m in December the most recent examples.
Category: Bonds
BCI Prices Inside Expectations
Chile’s Banco de Credito e Inversiones (BCI) has priced a new $500m senior unsecured 2023 bond as investors filled a $1.8bn book. The A1/A bank’s second-ever international bond priced at 99.275 with a 4.000% coupon to yield 4.089%, or UST+212.5bp, tight to 225bp-237.5bp guidance. The bonds were trading up 0.25 points late Wednesday, traders say. Lead managers say the deal priced 50bp-55bp wide of where a new 10-year bond would price from government-owned lender Banco del Estado de Chile (Aa3/A+/A+). The deal was allocated to approximately 160 accounts with more than 75% from the US, about 20% from Europe and a sliver from LatAm. BCI plans to use proceeds for general corporate purposes. Citi, HSBC and JPMorgan managed the deal. BCI sold a $600m 2017 bonds in November in its international debut, getting $3bn in orders and landing a 3.125% yield, through Citi and JPMorgan. BCI reported consolidated assets of $37.6bn and shareholders’ equity of $3bn as of year-end. It was the country’s third largest privately owned bank and the system’s fourth largest, with 12.8% market share in loans and 12.5% in deposits.
Cedae Clinches Domestic Debt
Cedae has completed the sale of BRL150m ($76m) in Brazil’s domestic bond market, it says. The Rio de Janeiro state water utility’s 2017 debenture pays the DI+1.69%. Proceeds are for working capital. Itau arranged the sale, done under the rule 476 restricted format. The funds will help out the borrower as it waits for better conditions for a planned IPO to raise up to BRL1bn. Cedae filed the IPO last year, but opted not to launch during the window for issuing with 3Q numbers. A re-filing and launch could still be in the cards this year, according to people close to the sale. Bank of America Merrill Lynch, Bradesco, BTG Pactual and Itau are managing the process.
Comgas Eyes Infra Debentures
Brazil’s Comgas is preparing a domestic bond sale, according to a person familiar with the process, part of which should take the form of so-called infrastructure debentures. A BRL400m ($201m) size is expected. Bradesco, BTG Pactual and JPMorgan are managing. The gas distributor was acquired last year by Cosan, using BRL3.3bn in 8-year loans that Cosan is seeking refinance this year.
CorpBanca Ready for COP Debut
Chile’s CorpBanca is expected to sell COP250bn ($140m) in Colombia’s local bond market today, according to people familiar with its plans. It is considering 10-year and 15-year IPC-linked tranches. Bancolombia, Corredores Asociados, Correval and Serfinco are managing the sale, rated AA+ on a national scale. Last month, CorpBanca raised $1.3bn in cross-border bond transactions at both the holdco an opco level to help refinance after Colombian acquisitions of Helm Bank last year and Santander Colombia in 2011. This would be the bank’s first issuance in the Colombian market. Santander Colombia and Helm, however, had each previously borrowed in Colombia.
Gol Bond Looking at Double Digits
Gol Linhas Aereas Inteligentes is heard aiming for a yield in the neighborhood of 11% for a 2023 NC5 senior unsecured bond pricing as soon as today, according to investors. While size remains to be determined, the Brazilian airline is likely looking at $300m, according to Fitch, which assigns a B rating to the potential sale. Bank of America Merrill Lynch, Banco do Brasil, Bradesco and Citi are managing. The issuer’s outstanding 2020 bonds were heard trading recently in the 9.7% range, thus offering at least a 70bp pickup at current initial price thoughts plus curve extension. Proceeds for the B/B minus deal will be used to refinance debt and reduce leverage. The airline was last in the bond market in 2010, selling $300m of the 2020s at a 9.5% yield. Gol met investors in Europe and Asia in February last year, whispering 11.5%-area for a perpetual bond before deciding against a sale.
Chilean Bank Plans Bond
Chile’s Banco de Credito e Inversiones (BCI) is preparing a $500m 10-year bond, according to S&P. The agency assigns an A rating to the proposed senior unsecured sale. Additional information was not immediately available, and finance officials at the bank were unavailable for comment. An issuance would be the bank’s second trip to the cross-border market. It sold a $600m 2017 bond in November, getting $3bn in orders and landing a 3.125% yield, through Citi and JPMorgan.
Chilean Retailer Prices Debut Bond
Chile’s Grupo SMU has raised $300m in its first trip to the international bond market. The acquisitive operator of supermarkets and wholesale operations received more than $1.2bn in orders for the 2020 NC4, as investors continue to put funds to work for smaller debut sales. The B2/B bond priced at par with a 7.750% coupon to yield at the tight end of 7.750%-7.875% guidance revised from earlier high-7% to 8% talk. The deal was up about 0.75 points Tuesday afternoon, according to investors. Buyers were making a bet on continued strong performance in the Chilean retail sector and the issuer’s ability to integrate acquisitions and deleverage. Negative free cash flow and high debt levels are the main concerns. Total debt/Ebitda was 11.3x as of 3Q 2012, with Moody’s expecting a reduction to 6.0x this year. Single B retailers in LatAm are uncommon, leaving buysiders to use the 2019s of Peru’s Maestro (Ba2/BB minus) and IFH (Ba3/BB minus) to gauge pricing. Both traded in the neighborhood of 5.75% Tuesday. Another option is Corp Group Banking, like SMU controlled by the Saieh Group, trading around 6.5% Tuesday. US-based buyers accounted for 57% the participation, Europeans 25%, Latin Americans 15% and Asians 3%, according to people familiar with the sale. Proceeds will be used to refinance existing debt and to extend SMU’s maturity profile. BTG Pactual and Deutsche Bank managed the sale. The notes are guaranteed by the four main operating entities of SMU, which collectively represent 95% of consolidated Ebitda and 93% of SMU’s consolidated total assets. Elsewhere in DCM, Brazilians J&F, Schahin Oil and Gas, and Gol are each due to finish investor meetings today.
FEFA Closes in on Domestic Bond
Fondo Especial para Financiamentos Agropecuarios (FEFA) is looking at the third week of February to sell floating-rate bonds in Mexico’s domestic market, according to people familiar with the company’s plans. The agriculture lender is targeting a 2016 bond which will represent its third domestic issuance. FEFA has filed to issue up to MXP6bn ($472m), with expectations that the deal will be around MXP5bn. Proceeds will be used to fund FEFA’s 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 its previous transaction, it sold MXP3bn in 2015 bonds at TIIE+20bp in October last year.
Gol Targets $300m
Gol Linhas Aereas Inteligentes is looking at a $300m bond of up to 10 years, according to Fitch, which assigns a B rating to the potential sale. The Brazilian airline is scheduled to meet the buyside through today, escorted by Banco do Brasil, Bank of America Merrill Lynch, Bradesco and Citi. The issuer’s outstanding 2020 bonds were heard trading recently in the 9.6%-9.7% range. As it seeks to refinance debt and reduce leverage, Gol will be aiming to take advantage of investor openness to a series of deals at the lower end of the ratings spectrum. It had approximately BRL9.7bn total adjusted debt as of 3Q 2012, BRL375m of which comes due this year. Total adjusted debt/Ebitda stood at 17.9x. The airline was last in the bond market in 2010, selling $300m of the 2020s at a 9.50% yield. Gol met investors in Europe and Asia in February last year, whispering 11.5%-area for a perpetual bond before deciding against a sale.