Mexico’s Axtel has once again extended the early deadline of its bond exchange offer, it says, to Thursday. Axtel last week received acceptance from a majority of bondholders, satisfying a minimum acceptance condition, following an improvement to the offer’s original terms. In the offer expiring January 28, the telecom is targeting its outstanding 7.625% 2017 and 9.000% 2019 bonds. It is offering $594.61 per 1,000 principal – comprised of $500 in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash, it says. Holders accepting before the early deadline receive an additional $116 per $1,000 principal. Axtel plans to issue new 2020 step-up notes, starting at 7.0%, stepping up to 8% through the first year and 9.00% after year two. Axtel is rated Caa2/CCC+/B minus.
Category: Bonds
BNDESPar Makes Biotech Investment
BNDESPar has agreed to buy a BRL600m ($294m) stake in of GraalBio, a Brazilian biotechnology firm, it says. The investment arm of the BNDES development bank gets shares worth 15% of the company, which specializes in second-generation ethanol and biochemicals. It is BNDES’ first investment in this area, in which biofuels which are made using residue from wood, corn, sugarcane bagasse and wheat straw. GraalBio plans BRL4bn in investments during the next six years.
CorpBanca Eyes COP Bonds
CorpBanca is considering the issue of some COP250bn ($141m) in Colombia’s local bond market in the first half of February, according to people familiar with the transaction. The bank is heard able to choose among 5, 7, 10, and 15-year maturities for the IPC-linked debt, with the sale able to be upsized to as much as COP350bn. CorpBanca is expected to manage the sale, rated AA+ on a national scale. This would be its first issuance in the Colombian market, following its entrance into Colombia’s retail banking sector through the acquisitions of Santander Colombia and Helm Bank in the past 14 months. Santander Colombia and Helm had each previously borrowed in the domestic bond market. CorpBanca has been raising money at various levels to help fund its acqusitions. CorpBanca sold $800m in 2018 bonds earlier this month in its first-ever international bond sale, clinching a 3.240% yield. It is also undergoing an equity follow-on concluding next month that is expected to raise more than $600m. Corp Group Banking, the holdco for CorpBanca, is currently preparing what is expected to be a $500m sale of 10-year bonds in the international market. Deutsche Bank and Goldman Sachs are managing the transaction, which could come as soon as this week.
FEFA Preps Domestic Bond
Fondo Especial para Financiamentos Agropecuarios (FEFA) is preparing to sell floating-rate bonds in Mexico’s domestic market, according to regulatory filing. FEFA is heard targeting a 2016 bond which will represent its third domestic issuance, according to a person familiar with the company’s plans. FEFA has filed to issue up to MXP6bn ($472m), an amount that will allow the issuer flexibility in terms of the final issue size, which will depend on demand. Pricing is expected to happen before the end of March. 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, tight to TIIE+25bp expectations after seeing 3.5x in demand in October last year.
Masisa Weighs International Debt Options
With the international debt markets proving receptive to high-yield issuers, Chilean board products manufacturer Masisa is debating between a debut cross-border bond and a syndicated loan, officials at the company say. “If the rates are attractive enough for a high-yield company like Masisa, we would go for the international bond. We think the appetite for high-yield is there,” CFO Juan Carlos Toro tells LatinFinance. Masisa could look to issue a 5-year or 10-year bond, raising $200m-$250m, he says, perhaps in the first half of this year. If rates are not appropriate, it could also consider the combination of a syndicated loan and local market bond during the next two years, he says. The proceeds would be used for refinancing the BB+ company’s outstanding debt. As of September 30, Masisa had $914m in bank loan and bond debt, according to regulatory filings. Fernando Menchaca, assistant director of finance, says the company has yet to pick any bookrunners. He also sees an attractive market for high-yield Chileans, pointing to recent oversubscribed transactions such as Automotores Gildemeister’s. In 2011, Masisa considered raising $200m-$250m in the international market, but had access to well-priced bank loans and opted instead for a loan plus a domestic bond. “You have to remember that at the end of 2011, the volatility of the market increased a lot. So we decided to go to a market we knew better,” says Menchaca. In the local market, it raised UF2m ($94m) via BCI and Scotia in a 5 and 21-year bond transaction that was 2x oversubscribed. It also signed $121m in 3 and 4-year international bank loans in December 2011, debt which represents the first large maturities it now faces. Higher-rated issuers in Masisa’s sector have found buyers in the past year. In April of last year, Chile’s Inversiones CMPC (Baa2/BBB+) sold $500m in 2022 bonds on the back of about $2.5bn in demand, pricing the 4.500% coupon notes at a 4.638% yield.
Occidente Looks to Colombian Bond Market
Banco de Occidente is considering the issue of COP200bn ($113m) in subordinated bonds in Colombia’s domestic bond market, according to people familiar with the bank’s plans. The pricing and timing for the 2027 inflation-linked bond sale remain to be determined. The transaction is expected to be rated AA+. In August, the bank raised COP300bn, including COP50bn in 2015 bonds paying DTF+1.67%, COP101bn in 2022 inflation-linked bonds paying 4.10% and COP149m in 2027 inflation-linked bonds paying 4.27%. Led by InterBolsa, it was rated AAA on a national scale, and brought the unit of Grupo Aval to completion of about half of a COP3trn program.
Sempra Meets Buyside
Sempra Mexico has commenced a five-day roadshow ahead of what is expected to be its first issuance in Mexico’s domestic market, as well as the first by a non-government entity in the energy sector. The Mexican unit of US-based Sempra Energy began Monday meeting investors ahead of the planned MXP5.2bn ($412m) transaction. The issuer is able to choose among a 2018 tranche paying a spread to the TIIE and a 2023 fixed-rate tranche. CFE and Pemex are likely pricing reference points, with the transaction expected to offer a pickup to the two government-owned entities. Pricing is expected February 6. Deutsche Bank, Credit Suisse and Santander are managing the transaction, rated AAA/Aaa on a national scale. In October, the Mexican unit of US-based Sempra Energy 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.
Axtel Tender Secures Majority
Mexico’s Axtel has received acceptance to an exchange offer from a majority of bondholders, it says, as of Friday’s close of the early deadline. The results satisfy a minimum acceptance condition and follow an improvement of the terms made earlier last week due to poor initial feedback. In an offer expiring January 28, the telecom is targeting its outstanding 7.625% 2017 and 9.000% 2019 bonds. It is offering $594.61 per 1,000 principal, up from $550 – comprised of $500 in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash, it says. Holders who accepted before the early deadline get an extra $116 per $1,000. The new 2020 notes to be issued start at a 7.0% coupon, and step up to 8.0% after year one and 9.0% after year two. Axtel is rated Caa2/CCC+/B minus.
BdB Targets Bigger Banvor Position
Banco do Brasil (BdB) and Banco Votorantim are studying the possibility of the government-backed lender buying additional shares in Banco Votorantim, Banco do Brasil says. Banco do Brasil holds 49.99% of the voting shares and 50% of the preferred shares Banco Votorantim, and is considering acquiring additional preferred shares. No specific target was discussed. BdB has used its position in Votorantim to expand in auto loans, paycheck loans and credit for mid-size companies. A larger piece might also be away to build up BdB’s investment banking activity.
CorpBanca Holdco Moves Toward DCM
CorpBanca’s holding company Corp Group Banking plans to hold investor calls Tuesday and Wednesday ahead of a likely bond sale, according to people familiar with the process. The holding company is seeking $500m in senior unsecured 10-year bonds, according to Moody’s, which has assigned a Ba3 rating with negative outlook. Deutsche Bank and Goldman Sachs are managing. The issuer chose to have calls rather than a full road show. Corp Group’s subsidiary CorpBanca visited accounts before printing earlier this month a $800m DCM debut, pricing a 3.125% 2018 bond at a 3.240% yield. It then raised $160m-equivalent in the international portion of an equity follow-on, and should raise more than $600m once the entire process is complete. Moody’s notes the refinancing risks inherent in the group’s strategy of increasingly financing its acquisitions with debt alongside ongoing capital support from its controlling and other shareholders. The group’s high growth profile and cross border acquisition strategy, as demonstrated by the purchase of two banks in Colombia, add a level of uncertainty to the company’s future cash flows, it adds. As of September, Corp Group Banking and its subsidiaries reported total assets of $28bn and total net equity of $2.6bn.