Paraguay is scheduled to start investor meetings today ahead of what should be its international bond debut, according to people familiar with the matter. The sovereign has previously indicated it would seek up to $550m at a maturity of up to 10 years. The issuer will begin the roadshow in London and Lima today and visit Los Angeles, Santiago and New York before finishing in Boston Wednesday. Bank of America Merrill Lynch and Citi are managing. In addition to integrating with the global financial community, Paraguay is looking to raise funds for road and energy projects. It was given a new BB minus rating from Fitch Thursday. Moody’s had upgraded Paraguay to Ba3 from B1 earlier in the week, and did the same Thursday for Telefonica Celular del Paraguay, which priced a $300m 2022 NC5 bond last month at 6.75% yield.
Category: Bonds
Peru Fish Exporter Retaps
Peru’s Corporacion Pesquera Inca (Copeinca) emerged Thursday with a $75m retap of its senior unsecured 2017 bonds, seeing total demand of $350m. Peru’s second-largest fishmeal producer reopened the 9.00% coupon bonds at 107.00 to yield 6.989% to maturity, or 6.246% to a 2014 call. The deal priced at the tight end of 106.5-area guidance, and flat to 107.00 secondary levels, bankers on the deal say. At least $35m of the proceeds will be used to repay leases that are part of the company’s financial debt, while remaining funds will be used for general corporate purposes, according to Fitch. BTG Pactual and Santander managed the deal, which brings the bond’s total outstanding size to $250m. B+/B2 Copeinca is a wholly owned subsidiary of Copeinca ASA, which guarantees the notes.
BTG Pactual Gives Little in $1bn Sale
Banco BTG Pactual was seen giving up less than 10bp concession in a $1bn 2020 bond sale that drew more than $6.5bn in orders. The Brazilian bank becomes the first non-sovereign to tap the DCM in 2013, and should be followed by at least three other borrowers today. BTG was able to tighten significantly as it built a $3bn book by 10:00am Wednesday. The Baa3/BBB minus senior bond priced at 99.247 with a 4.00% coupon to yield 4.125%, or UST+286.1bp, the tight end of 4.25%-area guidance brought in from wider 4.50% initial price thoughts. “Nice trade. Whispered cheap, then ratcheted down,” says a DCM banker away from the deal who calculated flat to 10bp concession to BTG Pactual’s 2016 senior bonds, on a curve adjusted basis. The bond was heard trading up about 0.25 points in the grey Wednesday afternoon. “Four percent was the line in the sand. There hasn’t been a ton of issuance in the space right now and with a lot of sub paper, this is shorter-senior [debt], though pricing wasn’t incredibly attractive for investors,” says a New York-based EM investor, noting fair pricing at 4.125%. Demand came from 367 accounts and featured US, EMEA, and LatAm accounts, with asset managers accounting for bulk of demand, according to bankers on the deal. The notes are part of a global medium-term notes program of up to $3bn with proceeds to be used to enable new business generation. Bank of America Merrill Lynch, Banco do Brasil, Bradesco, BTG Pactual and Santander managed the deal done through BTG’s Cayman branch. A greenshoe option of 5% is available during Asian market hours. Chile’s CorpBanca and Automotores Gildemeister, as well as Colombia’s Empresa de Telecomunicaciones de Bogota are expected to issue bonds as soon as today.
Cemig Picks Trio for Local Bond
Cemig has hired Banco do Brasil, HSBC and Banco Votorantim to manage a domestic bond sale it is preparing, according to a spokesman. The Brazilian utility’s Cemig Distribuicao unit is planning to raise BRL1.6bn ($788m) in three possible tranches, due 2018, 2021 and 2025. Cemig Distribuicao is rated Aa1/AA on a national scale. Cemig raised BRL1.35bn through its Cemig Geraco e Transmissao unit in a 3-tranche deal in March 2012 managed by BTG, HSBC and Banco do Nordeste.
CorpBanca Opts for 5-year Bond
Chile’s CorpBanca is aiming for a spread to UST in the mid-200bp range for a new 5-year international bond expected to price today, according to investors. The size remains to be determined, but is expected at $750m, according to ratings agencies. Making its cross-border debut, the Chilean bank had been considering issuing at up to 10 years maturity as it looks to help fund the $1.2bn purchase of Colombia’s Helm Bank agreed in October. The price talk comes after comparisons with peers Santander Chile, Banco del Estado de Chile, and Banco de Credito e Inversiones (BCI). The Baa1/BBB+ bank finished a roadshow Wednesday, via Citi and JPMorgan. CorpBanca is also preparing to price the international portion of an equity follow-on Tuesday, raising around $150m to begin a process expected to top $600m-equivalent, also to help replenish funds spent on expansion in Colombia. BTG Pactual is managing the equity sale, with Celfin and CorpBanca as co-managers.
ETB to Dial up COP
Empresa de Telecomunicaciones de Bogota (ETB) is taking advantage of a risk-on appetite and a recent Colombian peso rally to issue a $300m-equivalent 10-year peso-denominated bond as soon as today, according to people following the process. Initial price thoughts are heard at low to mid 7%-area. The Ba1/BBB minus telecom had been weighing the local currency sale versus a dollar deal as it met investors through Wednesday. “Basically there is a risk-on sentiment and so it makes sense for the issuer to tap this demand as foreign investors want exposure to EM LatAm currencies,” Benito Berber, strategist at Nomura, tells LatinFinance. This demand is weighed against investors’ concerns about liquidity and price. “It seems too tight for us. We think this should be closer to 8%,” says a US EM portfolio manager following the deal. Comps include BBB minus Emgesa’s 2021 COP bonds trading to yield 6.05% Wednesday, and the Colombian sovereign’s 2021 TES, in the 4.0%-area. “We’re not overwhelmed by the COP outlook from current levels, so the key factor will be spread over the Colombian sovereign,” adds another EM investor. Deutsche Bank and Goldman Sachs are managing the sale, to be ETB’s international debut.
Gildemeister Sets Target
Chile’s Automotores Gildemeister (AG) is out with initial price thoughts of 7.25%-area for what is expected to be a $300m 2023 NC5 bond, according to sources following the sale. The Ba2/BB vehicle importer and distributor operating in Chile and Peru wrapped up investor meetings in New York Wednesday and is pricing as soon as today. The deal is expected to be comped against AG’s own 2021 NC5 bonds, trading to yield inside of 7.0% Wednesday. JPMorgan is sole bookrunner. Following the issuance, Moody’s expects AG to pre-pay $70m of short-term debt plus $45m of long-term debt and maintain a cash position of at least $50m, what it considers to be a credit positive move from a liquidity standpoint. The deal should also improve AG’s debt maturity profile and allow the company to continue to execute network expansion in Chile and Peru and develop operations in Brazil, the agency adds. AG last visited the bond market in January 2012, retapping the 8.25% 2021s for $100m, to take the total outstanding issue size to $400m.
Marfrig Looks for Debt Funds
Brazil’s Marfrig is planning to visit with bond investors beginning this week, in meetings that will test the buyside’s appetite for lower-rated names in the Brazilian protein sector. The meatpacker is looking for $300m in new 2017 bonds, according to Moody’s, which assigns a B2 rating. A deal would follow a BRL1.05bn equity capital sale that raised less than the meatpacker had hoped. Proceeds are to be used to improve the company’s capital structure by lengthening its debt profile. The roadshow starts Friday in Switzerland, and hits Boston Monday before finishing in New York Tuesday. Bank of America Merrill Lynch, Bradesco, Banco do Brasil and Itau are managing. BAML took B2/B+/B+ Marfrig on a non-deal tour in November. Marfrig’s rating reflects still elevated leverage of adjusted gross debt/Ebitda of 6.4x as of September 2012, Moody’s says, noting a high amount of short term debt due over the next few quarters. Marfrig’s last bond sale was in May 2011 when it raised a $750m 2018 bond to yield 8.6%.
Olympic Concessionaire Taps Domestic Funds
Concessionaria Rio Mais, the consortium formed by builders Odebrecht, Andrade Gutierrez and Carvalho Hosken for work on Rio de Janeiro’s Olympic Park, has raised BRL315m ($154m) in Brazil’s local bond market, according to Anbima. The 1.5-year debenture pays the DI+0.73%. Itau coordinated the transaction, done under the rule 476 restricted format.
Santa Fe Still Looking for Funds
Argentina’s Santa Fe province is still considering borrowing $500m for infrastructure improvements, according to a government statement issued following conversations around the topic earlier this week. The funds would have a minimum 1-year maturity, and could come from the international or domestic market. Proceeds would target electrical, gas and health needs, including hospitals, water and roads. It was heard toward the end of last year to be preparing a $500m-equivalent borrowing program, to be submitted for legislative approval. The government says discussion is expected to continue in February.