Moody’s has upgraded Minerva to B1 from B2 ahead of the Brazilian meatpacker’s proposed $500m 2023 bond sale, it says. The upgrade reflects the improvement in the company’s capital structure following the equity issuance of BRL457m [$225m] in early December. “As a result of the equity offering, adjusted leverage is expected to decline meaningfully to about 4.5x at the end of 2012 as most proceeds were used to repay debt,” it says. The upgrade also considers Minerva’s comfortable liquidity profile and an expectation that the company’s credit metrics will continue to improve over the medium-term thanks to favorable fundamentals for the beef segment in Brazil. The outlook is stable. Minerva is visiting accounts in London, New York, Boston and Los Angeles through Wednesday. It launched last week a cash tender offer targeting its 9.500% 2017, 10.875% 2019 and 12.250% 2022 bonds, to be funded with proceeds from the new 2023 sale. Minerva is offering $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 2022. The prices include a $30 per $1,000 bonus for holders accepting before a January 25 early deadline. The full offer expires February 8. There is $34m outstanding in the 2017 bond, $372m in the 2019 and $450m in the 2022, and Minerva has set a $500m cap on the buyback. BTG Pactual, HSBC and Credit Suisse are managing the tender and new issue.
Category: Bonds
Axtel Sweetens Buyback Offer
Mexico’s Axtel has increased its offer to bondholders and extended the early deadline on a tender for its outstanding 7.625% 2017 and 9.000% 2019 bonds. After hearing investor feedback, the telecom is now offering $594.61 per 1,000 principal, up from $550 – comprised of $500m in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash, it says. Holders accepting before a January 18 early deadline – pushed back from January 11 – get an extra $116 per $1,000, up from the $100 originally offered. The full offer expires January 28. 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. “Many bond holders who held out on the first offer are likely to accept this one, increasing participation well above the majority required,” Barclays says. The shop values the offer at $69.67, up from $53.25 assuming an exit yield for the new notes at 10%. Axtel has also included clauses allowing it to redeem the 2020 notes. There is currently $275m outstanding in the 2017s and $490m in the 2019s. Axtel has set a limit of issuing up to $357m in the dollar 2020s, up to MXP336m ($26m) in the peso 2020s, and up to $115m in cash. Axtel is rated Caa2/CCC+/B minus.
Bradesco Adds RMB Debt
Adding to what is becoming a steady trickle of Brazilian banks to Hong Kong’s Dim Sum bond market, Bradesco has raised CNH350m ($56m). The lender’s 2016 bond priced at par with a 3.7% coupon in a private sale, according to sources familiar with the matter. Proceeds are for general funding purposes. BNP Paribas managed the sale. Bradesco is rated Baa1/BBB/BBB+. The Brazilian lender raised CNH300m in December, pricing a 2014 bond at a 3.90% yield. Banco do Brasil and BTG Pactual also made use of the offshore renminbi-denominated market, and Santander Brasil has indicated intentions to join them.
Cabei Visits CHF Market
Cabei has raised CHF150m ($164m) in new 2020 bonds, according to people familiar with the matter, its first deal in Switzerland since 2010. The bond priced at 100.198 with a 1.50% coupon to yield 1.47%, or mid-swaps plus 80bp. Proceeds are for general funding purposes. UBS managed the deal, rated A/A2. Cabei did a CHF150m 3-year bond in its first visit in 2010, landing at MS+150bp.
Cyrela Commercial Plots Debentures
Brazil’s Cyrela Commercial Property plans to raise BRL150m ($74m) through the sale of domestic bonds, it says. The developer’s 2018 debenture would pay DI plus up to 1.0%, and amortize in two parts during the final two years. Proceeds are for working capital. Banco do Brasil is managing the sale, done under the rule 476 restricted format.
Findeter Looks to International Market
Colombia’s Findeter will look to issue $500m in bonds in the international markets this year, it says. After regularly tapping the domestic market, such a sale would be the Colombian state-owned development finance agency’s cross-border debut, according to Dealogic data. Education and health top the priorities for the proceeds. In its most recent transaction in November, Findeter issued COP289.7bn ($160m) in the domestic bond market, through a 3-tranche deal that saw nearly COP446bn in total demand. It sold COP99.7bn in 2014 bonds at DTF+1.27%, COP91.5bn in 2016s at DTF+1.55%, and COP98.5bn in 2018s at DTF+1.71%.
Minerva to Extend Curve
Minerva has launched a cash tender offer targeting three series of pricey bonds, it says, and will meet investors starting today ahead of a likely 10-year new issue, according to sources familiar with the process. The Brazilian meatpacker is to visit London, New York, Boston and Los Angeles through Wednesday. The proceeds will be used to repurchase the 9.500% 2017, 10.875% 2019 and 12.250% 2022 bonds involved the tender. Minerva is offering $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 2022. The prices include a $30 per $1,000 bonus for holders accepting before a January 25 early deadline. The full offer expires February 8. There is $34m outstanding in the 2017 bond, $372m of the 2019 and $450m of the 2022, and Minerva has set a $500m cap on the buyback. BTG Pactual, HSBC and Credit Suisse are managing the tender and new issue. Peer Marfrig is also on the road ahead of a likely $300m 2017, and is scheduled to finish a roadshow Tuesday.
AG Pops in Aftermarket
Chile’s Automotores Gildemeister (AG) priced a new $300m bond Thursday, which was up about 3.0 points in the gray, according to investors. The Chilean vehicle distributor got $2.5bn in orders and priced the 2023 NC5 at par with a 6.75% coupon to yield tight to 7.25%-area guidance. As with AG’s 2011 debut sale and subsequent retap, investors were drawn in by the scarcity value of Chilean paper. The price of the new bond indicates a concession of at least 50bp to AG’s existing 2021 NC5, according to investors. JPMorgan led the Ba2/BB transaction. The vehicle importer and distributor operating in Chile and Peru is expected to repay debt and strengthen its cash position with the proceeds, according to Moody’s, allowing it to continue network expansion and develop operations in Brazil.
Cedae Adds Debentures to Funding Plans
Companhia Estadual de Aguas e Esgotos (Cedae) plans to raise BRL150m ($74m) in Brazil’s domestic bond market, in addition to the IPO it is already in the process of preparing. The Rio de Janeiro state water utility’s 2017 debenture would pay DI+1.69%, according to regulatory documents. Proceeds are for working capital. Itau is leading the deal, to be done under the rule 476 restricted format. Separately, Cedae registered late last year for an IPO, through has yet to pull the trigger on a launch. Bank of America Merrill Lynch, Bradesco, BTG Pactual and Itau are managing that process, which would raise funds for expansion.
Chilean Secures Private Debt
Chile’s Factoring Security has issued UF1m ($48m) in a private bond transaction, with a term of 5 years and an interest rate of 4.5%, according to people familiar with the financial services company. Much of the funding is heard to be earmarked for refinancing liabilities. IMTrust managed.