Category: Bonds

Brazil’s Marfrig was heard with order books reaching $2.5bn late Tuesday for a new 2017 bond, and was out with 10%-area guidance ahead of today’s expected pricing. The B2/B+/B+ rated meatpacker revised guidance from 10.25%-area and earlier mid-10% talk. It is targeting $300m, according to ratings agencies. “Marfrig’s bonds have rallied, which has allowed them to tighten in yield,” says a DCM banker away from the sale. Marfrig’s 2016, 2018 and 2020 bonds were trading to yield around 9.14%, 9.91% and 10.54%, respectively, on the bid side Tuesday afternoon. “When they first called us they were talking 11%-12%, but now higher-beta names have been outperforming,” says an investor following the deal. Proceeds are to be used to improve the company’s capital structure by lengthening its debt profile. Bank of America Merrill Lynch, Bradesco, Banco do Brasil and Itau are managing the transaction, to be done through the Marfrig Holdings Europe unit. Marfrig Alimentos and certain subsidiaries are guarantors. BAML took Marfrig on a non-deal tour in November. Marfrig’s last bond sale was in May 2011, when it raised a $750m 2018 bond at a 8.6% yield.

Brazil’s Minerva is out with mid-to-high 8% initial price talk for what is expected to be a $500m 2023 bond sale, according to people familiar with the process. The transaction could grow in size depending on interest in a cash tender offer the meatpacker plans to fund with the proceeds. Minerva is wrapping up fixed-income investor meetings today, and could price as soon as Thursday. Leads are using Minerva’s 2022 bonds, quoted at 8.15%-8.20% yield, as the most immediate comp. In the tender, 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.

Brazil’s Marfrig is targeting a yield of mid 10% for a new 2017 bond, according to investors following the sale. The B2/B+/B+ rated meatpacker is due to complete investor meetings today in New York, with pricing to follow. The meatpacker is looking to raise $300m, according to Moody’s. Proceeds are to be used to improve the company’s capital structure by lengthening its debt profile. Bank of America Merrill Lynch, Bradesco, Banco do Brasil and Itau are managing the transaction, to be done through the Marfrig Holdings Europe unit. Marfrig Alimentos and certain subsidiaries are guarantors. BAML took Marfrig on a non-deal tour in November. Marfrig’s last bond sale was in May 2011, when it raised a $750m 2018 bond to yield 8.6%. The 2016, 2018 and 2020 bonds were yielding around 9%, 10.5% and 11%, respectively, Monday.

After a successful and innovative 2012, Banco do Brasil (BdB) will look to diversify its debt funding even more in 2013, and is eyeing another Japanese issuance and new sources including a Chilean huaso bond. “Our strategy has been to build Banco do Brasil’s curve, and now we would like to diversify. Not only with investors, but also geography. We are thinking about doing more in Japan, and are thinking about some alternatives in Latin America. Chile is a good example,” Ivan Monteiro, the bank’s CFO, tells LatinFinance. Hitting these markets would come in addition to planned borrowings in dollars and Euros. Banco Pine opened the Chilean domestic bond market for Brazilian banks last year and others have been tipped to follow. A Japanese sale from BdB this year would follow a successful JPY24.7bn ($315m) 2015 Euroyen deal in 2012. Brazil’s lenders have also been making use of the Dim Sum market. BdB raised about $60m in two Hong Kong offshore RMB-denominated sales last year, and Monteiro says others are a possibility this year. A key for Japan, Hong Kong and other markets is maintaining a long-term presence, he notes. There is no specific timing yet for dollar borrowings, though the official notes conditions are favorable. “The beginning of this year is better if you compare it with 2012. There is a lot of liquidity, but a lot less volatility. That is encouraging a lot of new issuance, at very good prices,” Monteiro says. The pools of liquidity in the US are stronger than ever, thanks to BB’s US operations allowing it to use the 3A2 format. This exception to the SEC process allows for an even broader class of investors than 144a. Monteiro declines to discuss the planned IPO of the BdB Seguridade unit, citing a quiet period. According to regulatory documents, the bank aims to carve out the insurance business entity at some point this year, with the market expecting a BRL5bn ($2.46bn) transaction.

Brookfield Incorporacoes has determined terms on a BRL300m ($148m) domestic bond sale. The developer plans two tranches, according to regulatory documents. A 2016 portion pays DI plus up to 1.65%. An inflation-linked 2018 piece pays up to 6.10%. It is raising funds to repay debt and for working capital. The size of each is to be determined during bookbuilding, with the issue able to be upsized by as much as BRL105m. JPMorgan and Itau are managing.