Brazilians are hopeful 2013 can top this year’s domestic bond market volume, with interest rates and the country’s infrastructure needs among the catalysts. In a positive sign, toll road operator Concessionaria Auto Raposo Tavares (CART) raised BRL750m ($357m) while getting foreigners to buy infrastructure debentures for the first time, in what is likely the domestic market’s final widely-distributed debenture sale of 2012. Volume for such deals, known as rule 400 transactions, stands at BRL14.30bn through Monday, according to the CVM, if large bank leasing deals are excluded. This easily tops last year’s BRL3.18bn total and nearly matches the BRL15.63bn raised in 2010. “The market this year was good in terms of volume and the number of transactions that took place, though there were still a lot of 476 deals,” says a DCM banker away from the CART transaction, referring to the limited distribution rule 476 bond transactions. This type of deal – often bought by a single bank – is also set to beat last year’s volume, with BRL62.74bn issued as of Monday, according to Anbima, up from the BRL48.10bn full year 2011 total. Both formats are important options for issuers, bankers say, but the more widely distributed sales are necessary for developing a secondary market that could encourage more corporate issuance. “The 476 trend is clearly reaching some limits of some important fund managers. I think we are going to see more and more 400s going forward,” says a Sao Paulo-based DCM banker. Infrastructure debentures, where foreign and domestic retail investors get tax incentives, should help as the new asset class develops. CART’s 2024 inflation-linked bond was divided into two parts to accommodate the foreign and local investor bases. A BRL380m 2024 tranche pays 5.8% and went to international investors, who benefit from not paying IOF tax due to the use of proceeds. A BRL370m portion pays 6.05% and was placed with domestic buyers. Both tranches saw much lower yields than the 8
Category: Bonds
BR Malls Clinches Debenture
BR Malls has completed the placement of BRL420m ($200m) in Brazil’s domestic bond market, according to Anbima. The shopping center operator’s 2024 debenture pays 13.49% annually. It plans to use proceeds to repay debt associated with expansion of various malls. Deutsche Bank managed the sale, done under the rule 476 restricted format. BR Malls is rated AA on a national scale.
Brazil OKs Bradesco Mexican Plan
Brazil’s central bank has given approval to Bradesco to operate as a commercial bank in Mexico, Bradesco says. The bank now awaits approval by Mexican regulators to set up an operation in the country.
BB Orders More Dim Sum
Banco do Brasil has returned to the Dim Sum bond market, for a CNH300m ($48m) private placement. The Brazilian lender priced the 2015 bond at par with a 3.98% coupon. Banco do Brasil and Societe Generale led the transaction. The sale is the lender’s second in the format, following a smaller CNH166m transaction in July. The Hong Kong offshore renminbi market is becoming popular with LatAm banks. CAF, Santander Chile, Bradesco and BTG Pactual have borrowed there in the last few months.
Desenvix Sells Local Bond
Desenvix has raised BRL100m ($48m) in Brazil’s domestic bond market, according to regulatory documents. The 2016 debenture pays the DI+2.8%, in line with expectations. The renewable energy developer is raising funds for working capital, repaying debt and capex. Banco Fator managed. Desenvix is rated A2 on a national scale.
ENAP Goes on the Road
ENAP has started a roadshow for a local market issue of $300m-equivalent, according to sources familiar with the Chilean state-owned oil company’s plans. It is expected to issue next month, perhaps the week of January 7 or 14. The issuer can choose among a 3-year bullet in pesos at 6.4%, a 5-year bullet in UF at 3.4%, and a 21-year bullet in UF at 3.7%. Banchile-Citi, JPMorgan and Scotia are managing the sale, rated AAA/AA+ on a national scale.
Sodimac Plans Issue
Sodimac will soon look to issue UF2.5m ($121m) in the domestic bond market, say people familiar with the plans of the home improvement unit of Chilean retailer Falabella. It can choose from a 3.4% coupon 5-year UF bullet tranche, a 6.5% coupon 5-year peso bullet tranche, a 3.6% 10-year UF bullet tranche and a 3.7% 21-year UF tranche with a 10-year grace period. The timing is not clear. Banchile leads the deal, rated AA on a national scale. In August, Sodimac sold COP300bn in Colombia’s domestic market, in an issue that saw some 2.8x demand.
YPF Pushes Back Bond Sale
YPF plans to price Tuesday up to ARP4bn ($821m) in domestic bonds, it says, a transaction that can be upsized to ARP4.5bn. The sale had been originally expected to price today. The Argentine state-controlled oil producer is offering 2018 bonds paying a floating rate to be determined at the time of pricing, and 6.25% coupon 2016 bonds. Banco Galicia, Banco Hipotecario, BACS, Santander Rio, BBVA Banco Frances, Macro and Nacion Bursatil are managing the sale, rated AA on a national scale. Additionally, YPF has sold ARP150m in 19% 1-year bonds to retail investors in a sale closed Friday, upsizing from ARP50m.
ALL Raises Local Debt
Brazil’s America Latina Logistica (ALL) has raised BRL750m ($359m) in domestic bonds, according to Anbima. The rail operator’s 2017 debenture pays DI+1.3%. ALL plans to used the proceeds to improve its debt profile. Caixa Economica Federal managed the transaction, done under the rule 476 restricted format.
Chilean Utility Plans Issue
Saesa is planning to issue UF2.5m ($121m) in Chile’s local bond market on December 20. The electricity transmission company can choose from a 7-year tranche with a 3.40% coupon and a 21-year tranche with a 3.75% coupon. The proceeds will be used to refinance debt. IMTrust and BCI lead the deal, rated AA/AA on a national scale. Saesa sold UF2m in domestic bonds in its last deal in October 2011.