Category: Bonds

Renovias, a Brazilian road operator, has finalized the issuance of BRL99m ($49m) in domestic bonds, according to Anbima. The 2017 debentures pay 113.6% of the DI and amortize monthly beginning in December 2014. Itau arranged the transaction, done under the rule 476 restricted format. Renovias is owned by CCR and Encalso, and operates in the states of Sao Paulo and Minas Gerais.

Schahin Oil and Gas is heard targeting a $685m bond, according to Fitch, which assigns a BB minus rating. The Brazilian oil services provider has sold multiple project bonds, but the sale is to be a debut at the senior level. Schahin is scheduled to start a four-day roadshow Thursday in Boston and visit Los Angeles on Friday. It will then visit accounts in London the following Monday before wrapping up in New York Tuesday. A 7-year or 10-year tenor is heard being considered, with proceeds used to refinance subordinated debt at some of its subsidiaries as well as debt at the holding company level. Citi, Deutsche Bank, HSBC and Mizuho are managing the investor meetings. A deal would follow a $750m project finance bond issued in March last year which was backed by flows from a 10-year service contract with Petrobras. BB+/BB minus Brazilian oil services provider Queiroz Galvao Oleo e Gas’ (QGOG) $700m 2018 bond debut will be used as a pricing reference point.

Brazil’s Brookfield Incorporacoes has finished meeting investors and expects to price a BRL300m ($148m) domestic bond sale by mid-March, according to regulatory documents. A 2016 tranche pays DI plus up to 1.65%, and an inflation-linked 2018 piece pays up to 6.10% and amortizes in two equal parts during the final two years. The size of each portion is to be determined during bookbuilding, with the issue able to be upsized by as much as BRL105m. Brookfield is raising funds to repay debt and for working capital. JPMorgan and Itau are managing the deal, rated A+ on a national scale.

Brazil’s JBS has raised $500m from the bond market, issuing at the upper reaches of an anticipated $300m-$500m range and pricing through its curve. The B1/BB minus meatpacker had $2.5bn in orders from about 190 accounts, according to people following the sale. The 2023 NC5 priced at 98.183 with a 6.250% coupon to yield 6.500%, the tight end of 6.500%-6.625% guidance that followed high 6%-area talk. The deal was seen coming some 50bp through JBS’ secondary curve, and the bonds sold off early in the grey before later recovering to 98.25-98.45, slightly above reoffer price, according to investors. “We didn’t think they offered any concession, and while we thought the deal was fair, investors are supposed to get something. If it comes exactly at fair value there is not a lot of upside to Minerva’s 2023 bonds or JBS 2021s,” says a New York-based EM investor that opted out of the trade. Though there is demand for solid high-yield bonds, investors note more selectivity in the bond market of late – issuers are starting to price some deals tight and buyers are starting to show some resistance. “Fair pricing at 6.5%, but the timing is not the best. We have just seen Minerva and Marfrig in the market and there is less demand than a few weeks ago. There is still demand for high-yield, but this credit is in the middle of the high-yield range and not offering much versus Minerva or Marfrig,” says another buysider looking at the deal. US accounts accounted for 50% of the sale, Europeans 35%, Asians 10% and LatAm buyers 5%. Fund managers bought 50%, private banking 25%, hedge funds 15% and banks and pension funds 10%. The new bonds are issued by ESAL, an Austria-based wholly-owned JBS subsidiary, and guaranteed by JBS and JBS Hungary. Proceeds will be used to refinance indebtedness and for general corporate purposes. Bradesco, Banco do Brasil, Deutsche Bank, JPMorgan and Santander managed the sale. The new deal comes just about one year after the meatpacker’s previous international