Pesquera Exalmar is preparing fixed-income investor meetings for next week, ahead of what would be a cross-border bond debut. The Peruvian fishery plans a $200m 2022, according to Moody’s, who assigns a B2 rating. It will visit Switzerland Monday, followed by Los Angeles on Tuesday before wrapping up in Boston and New York on Wednesday, according to people following the process. Citi and Santander are managing the possible sale, what would be the latest in a stream of Andean first-timers that have been mostly well-received by the buyside. Exalmar plans to use proceeds to refinance an existing $140m syndicated loan due 2017 and costing it Libor+390bp, as well as to purchase 0.5% of additional fishing quota. The closest comp is thought to be fellow Peruvian fishery Copeinca, who retapped a 2017 bond last week for $75m, getting a 6.989% yield. Moody’s says Exalmar’s credit metrics are strong for its B2 rating category and compare favorably with other rated industry peers. Adjusted debt to Ebitda was 3.7x for the 12 months ended September 2012. And while Moody’s expects the proposed transaction to increase debt to Ebitda to 4.4x following the sale, in the long term it expects leverage to decline to 3.5x in 2013 and in 2.5x 2015. In addition to the 2011 loan, led by HSBC, Santander and WestLB, the issuer made its ECM debut in 2010, raising $120m through Santander, Citi and Interbank.
Category: Bonds
ENAP Readies Domestic Bond
ENAP is slated to issue up $300m-equivalent in Chile’s local bond market today, say people familiar with the transaction. The Chilean state-owned oil company can choose among a 6.4% coupon 3-year bullet peso-denominated tranche of up to CLP50bn ($105m), a 3.4% coupon 5-year UF-denominated bullet of up to UF6m ($288m), and a 3.7% coupon 21-year UF bullet of up to UF6m. The total issuance is not to exceed $300m-equivalent, and the issuer is heard favoring the 21-year tranche. The proceeds are to be used to refinance debt. Banchile-Citi, JPMorgan and Scotia are managing the sale, rated AAA/AA+ on a national scale. The issuance is expected to be among the last before the domestic bond market winds down ahead of the Chilean summer holiday period.
Marfrig Upsizes in Bond Return
Brazil’s Marfrig has sold $600m in new 2017 bonds, upsizing from a $300m-$500m expected size on the back of $4bn in demand from over 250 accounts. The B2/B+/B+ meatpacker priced at par with a 9.875% coupon to yield in line with 9.875%-area guidance that had been brought in from initial mid-10% price talk. It was also well inside of the 11%-12% levels it was heard considering at the beginning of marketing. The bonds were up 2.0 points in the grey, according to traders. “A decent value given flatness of the curve,” says a participating EM bond investor. The pricing was seen offering a flat to slight pickup to Marfrig’s 2018 bonds, trading around 9.6% on a yield-to-worst basis, according to bankers following the sale. Proceeds from the issue will be used mostly to repay short-term debt and strengthen the issuer’s cash position. Wednesday’s debt transaction and a December equity follow-on potentially represent a total debt reduction of about BRL1.3bn ($636m) over the next few quarters, according to Moody’s. Bank of America Merrill Lynch, Bradesco, Banco do Brasil and Itau managed the sale, done through the Marfrig Holdings Europe unit. Marfrig Alimentos and certain subsidiaries are guarantors. It was the company’s first bond sale since May 2011, when it raised a $750m 2018 deal at a 8.6% yield.
Minerva Sets Yield Target
Brazil’s Minerva has indicated 8.25%-area guidance for a new 2023 bond expected to price today. The issuer was heard with $2.25bn in orders Wednesday afternoon, for what should be a minimum $500m size. The yield level has been brought in from mid-to-high 8% initial price talk. Minerva plans to use proceeds to fund a cash tender launched January 11. The issuer is looking to replace its 9.500% 2017, 10.875% 2019 and 12.250% 2022 bonds. Minerva is offering holders $1,105 per $1,000 principal of the 2017s, $1,200 per $1,000 of the 2019 and $1,262 per $1,000 of the 2022s. The prices include a $30 per $1,000 bonus for holders accepting before a January 25 early deadline. The full tender offer expires February 8. There is $34m outstanding in the 2017 bond, $372m of the 2019 and $450m of the 2022. BTG Pactual, HSBC and Credit Suisse are managing the tender and new issue.
Paraguay Aims Below 5%
Paraguay has given 5.00%-area yield guidance for a 10-year $500m bond debut expected to price as soon as today, according to investors following the transaction. Books exceeded $1.2bn 30 minutes after announcement Wednesday morning, and the sovereign has indicated the $500m size will not grow. The issuer’s international bond debut is being compared to Bolivia’s (Ba3/BB minus) 2022 bond sold last year. Bolivia, too, started at 5% levels before tightening to price at 4.875%, and now trades in the 4.75%-4.80% area. “Paraguay seems cheap relative to Bolivia, so I would expect a strong book and hence decent performance,” says a New York based EM sovereign investor following the deal. “Fair value would be at 5% and above, but this deal may be priced too aggressively, like Bolivia. In both cases, upside is fairly limited,” adds another buysider looking at the transaction. In a report, Barclays spots fair value at 4.85%-5.00%. Bank of America Merrill Lynch and Citi are managing the sale, rated Ba3/ BB minus/BB minus.
Sempra Mexico to Debut in Domestic Market
Sempra Mexico is planning to raise up to MXP5.2bn ($412m) in Mexico’s domestic bond market, according to regulatory documents. The issuer is able to choose among a 2018 tranche paying a spread to the TIIE and a 2023 fixed-rate tranche. Pricing is estimated for 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.
Sugar Processor Tightens DCM Debut
Brazilian sugarcane processor Tonon Bioenergia has priced a $300m 2020 NC4 bond, increasing its cross-border debut from an initially planned $200m as investors filled a book that reached $1.4bn. Tonon was able to use investor demand for yield and an increase in risk appetite to ratchet down pricing from high 9%-area initial price thoughts to the tight end of 9.50%-9.625% revised price guidance. The B/B bond priced at 98.743 with a 9.25% coupon to yield 9.50%, and traded up around 3.0 points Wednesday afternoon, according to a trader. Tonon was thought to price flat to the 9.47% interpolated yield level of peer Grupo Virgolino de Oliveira’s (GVO) 2018 and 2022 bonds. “Despite Tonon being a smaller company, it is less levered than GVO and pricing flat to GVO made it look cheap,” says one investor looking at the deal. Tonon had net leverage of 2.6x versus GVO’s 4.9x net leverage, according to a report from Citi. More than 127 accounts participated and private banking and real money accounts were dominant in the book, according to people with knowledge of the sale. Buyers came mainly from the US, with some Europeans and limited Asian participation. Proceeds will be used to refinance approximately BRL281m ($133.5m) of existing secured debt and for general corporate purposes. BTG Pactual, Itau, and Santander managed the B/B sale. Tonon was founded in 1962 and sells VHP sugar, anhydrous and hydrous ethanol as well as other sugarcane byproducts. The company has a total crushing capacity of 5.7m tons per year, divided between its two Santa Candida and Visa Alegre mills. Private equity fund DGF Terra Viva owns a 48.4% stake in the company.
Bolivia a Comp for Paraguay: Barclays
Bolivia’s (Ba3/BB minus) benchmark 2022 bond, which priced under 5% in October last year, would serve as a comp for Paraguay’s debut benchmark-size 10-year bond, Barclays says in a report. Fair value should be 4.85-5.00%, with anything above this attractive, the bank adds. “Given the number of similarities between the two economies – both being open commodity-based economies with similar ratings – we think that Bolivia’s issuance would serve well as a comparison for pricing for a new bond from Paraguay,” Barclays says. Paraguay has previously indicated it would seek up to $550m at a maturity of up to 10 years. It is scheduled to finish a roadshow in Boston Wednesday. Bank of America Merrill Lynch and Citi are managing.
Brazilian Debutant Targets Single Digits
Brazilian sugarcane processor Tonon Bioenergia is aiming for high 9%-area initial price thoughts on a debut $250m 2020 NC4 bond, according to people following the sale, with investor interest heard reaching more than $700m by late Tuesday. Pricing for what would be an international market debut is expected as soon as today. Tonon finished a roadshow Tuesday following visits to Boston, London, Los Angeles and New York. Peer Grupo Virgolino de Oliveira’s (GVO) 2018 and 2022 bonds are considered to be direct comps, along with Usina Sao Joao Acucar e Alcool’s (USJ) 2019 bonds. BTG Pactual, Itau, and Santander are managing the B/B sale.
Eletrosul Plans Infrastructure Debentures
Brazil’s Eletrosul plans to raise funds for three wind generation projects through the sale of infrastructure debentures, according to government documents granting authorization for such a sale. The Geribatu I, II and III projects represent 66 megawatts of the 258-megawatt BRL1bn Geribatu project comprised of 10 wind farms in the state of Rio Grande do Sul. Specific details of any issuance are not yet available, a spokeswoman says. Eletrosul, a unit of Eletrobras, has 49% ownership of Geribatu, with private equity fund Rio Bravo holding 51%. The project should be operational in 2014. Eletrosul and Rio Bravo are also partners in the Cerro dos Trinidade wind project, which has also been authorized to sell infrastructure debentures.