Chile’s CorpBanca has raised $800m in 2018 bonds, getting $3bn demand in its international DCM debut. The Baa1/BBB+ lender priced at 99.482 with a 3.125% coupon to yield 3.240%, or UST+245bp, tight to 250.0bp-262.5bp guidance which followed mid-200bp initial price thoughts. The bonds were trading up 0.25 points in the grey, according to a trader. “For a few months we thought about diversifying our funding base and found the right market to execute that idea,” Claudia Alejandra Labbe, CorpBanca’s head of investor relations, tells LatinFinance. Labbe explains CorpBanca opted for a 5-year instead of a 10-year, as interest rates at 10 years were less attractive. CorpBanca would have liked to place $1bn in its bond debut, but was pleased with the $800m final size, upsized from $500m-$750m expectations. “My valuations showed a 50bp-70bp pickup for CorpBanca versus peers after taking into account the maturity and rating differentials,” says a West Coast investor looking at the deal. Peers included Santander Chile, Banco del Estado de Chile, and Banco de Credito e Inversiones (BCI). Citi and JPMorgan managed the transaction. CorpBanca is also preparing to price the international portion of an equity follow-on Tuesday, raising around $150m to begin a process expected to raise $600m-equivalent. BTG Pactual is managing the equity sale, with Celfin and CorpBanca as co-managers. CorpBanca will focus on organic growth and digesting its recent Colombian acquisitions and does not foresee additional purchases in the near to medium-term, Montevecchi says.
Category: Bonds
ETB Sees Strong COP Demand
Scarcity value and a pickup to other peso-denominated paper meant a strong bid for Empresa de Telecomunicaciones de Bogota’s (ETB) $300m-equivalent global COP-denominated bond. The city-owned telecom received $2.4bn in orders in its international debut, according to people following the sale, and brought pricing down to the bottom of the expected range. The Ba1/BBB minus bond priced at par with a 7.00% coupon, to yield at the tight end of 7.00-7.25% guidance following low-to-mid 7% talk. “There are not many decent sub-sovereign global COP deals, and people liked this one,” says a New York EM investor who calculates a 50bp-100bp pickup versus similar global COP paper, including Emgesa’s (BBB minus) 2021, which had been trading to yield around 6.00%. While noting that a comparison is difficult, a banker on the deal estimates a peer like Emgesa or Empresas Publicas de Medellin might issue a similar deal at 6.50%-6.75% yield. “It looks attractive to the sovereign TES curve and looks like a good pickup if you are looking to get local exposure,” says another investor following the deal. The sovereign’s 2021s yield in the area of 4.0%. Some 140 accounts participated, with 58% from the US, 19% from LatAm, 15% from the UK, 6% from Europe and 2% from Asia. Some 72% of the buyers were fund managers, 18% hedge funds and 7% private banks, with the remainder other types. Deutsche Bank and Goldman Sachs managed the sale, the first global COP since Brazil’s BTG Pactual raised $200m-equivalent in September.
Paraguay Moves Ahead
Paraguay is scheduled to start investor meetings today ahead of what should be its international bond debut, according to people familiar with the matter. The sovereign has previously indicated it would seek up to $550m at a maturity of up to 10 years. The issuer will begin the roadshow in London and Lima today and visit Los Angeles, Santiago and New York before finishing in Boston Wednesday. Bank of America Merrill Lynch and Citi are managing. In addition to integrating with the global financial community, Paraguay is looking to raise funds for road and energy projects. It was given a new BB minus rating from Fitch Thursday. Moody’s had upgraded Paraguay to Ba3 from B1 earlier in the week, and did the same Thursday for Telefonica Celular del Paraguay, which priced a $300m 2022 NC5 bond last month at 6.75% yield.
Peru Fish Exporter Retaps
Peru’s Corporacion Pesquera Inca (Copeinca) emerged Thursday with a $75m retap of its senior unsecured 2017 bonds, seeing total demand of $350m. Peru’s second-largest fishmeal producer reopened the 9.00% coupon bonds at 107.00 to yield 6.989% to maturity, or 6.246% to a 2014 call. The deal priced at the tight end of 106.5-area guidance, and flat to 107.00 secondary levels, bankers on the deal say. At least $35m of the proceeds will be used to repay leases that are part of the company’s financial debt, while remaining funds will be used for general corporate purposes, according to Fitch. BTG Pactual and Santander managed the deal, which brings the bond’s total outstanding size to $250m. B+/B2 Copeinca is a wholly owned subsidiary of Copeinca ASA, which guarantees the notes.
Sodimac Captures Domestic Debt
Sodimac has issued UF2.5m ($121m) in Chile’s domestic bond market, according to sources familiar with the transaction. A UF1m 2017 bullet tranche with a 3.40% coupon priced at a discount to yield 3.74%, or government bonds plus 103bp. It drew 3.6x demand. A UF1.5m 2033 tranche with a 10-year grace period and 3.70% coupon priced at a discount to yield 3.94%, or government bonds plus 115bp. The longer portion saw 2.5x demand. Banchile-Citi managed the deal, rated AA on a national scale. Sodimac is the home improvement unit of Chilean retailer Falabella. Banchile-Citi points out that spread on the 5-year bullet was the Chilean corporate market’s lowest for that maturity in the last 18 months.
Triangulo Restarts Local Bond
Brazilian road operator Triangulo do Sol Auto-Estradas has initiated investor meetings as it restarts a domestic bond sale process paused in November. Bookbuilding for the 2-tranche BRL620m ($305m) transaction due 2020 should start February 6 and conclude by the end of February, according to a prospectus. A first tranche would pay DI plus up to 3.0% as originally planned, while an inflation-linked second tranche should offer up to 8.0%, an increase from the 7.5% ceiling the Atlantia Bertin unit had set when it originally registered its intentions in August. The first tranche amortizes twice annually beginning 2014, and the second annually beginning 2014. The exact amount of each portion and its interest rate will be determined during the bookbuilding process. The transaction may be upsized by as much as BRL217m. Proceeds are for repaying BRL620m in 1.5-year debt due in October that is costing it DI+2.5%. BTG Pactual, Bradesco, Itau and Santander are managing the sale, rated AA/AA on a national scale.
Sodimac Set for Bond
Sodimac is expected to issue up to UF2.5m ($121m) in Chile’s domestic bond market today, according to people familiar with the issuer’s plans. The home improvement retailer 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. It is expected to select the 21-year bullet and could then pick between the 5-year peso and UF tranche. Banchile is managing the deal, rated AA on a national scale. In August, Sodimac sold $164m-equivalent in Colombia’s domestic market, in an issue that saw 2.8x demand. Sodimac is a unit of Chilean retailer Falabella.
BTG Pactual Gives Little in $1bn Sale
Banco BTG Pactual was seen giving up less than 10bp concession in a $1bn 2020 bond sale that drew more than $6.5bn in orders. The Brazilian bank becomes the first non-sovereign to tap the DCM in 2013, and should be followed by at least three other borrowers today. BTG was able to tighten significantly as it built a $3bn book by 10:00am Wednesday. The Baa3/BBB minus senior bond priced at 99.247 with a 4.00% coupon to yield 4.125%, or UST+286.1bp, the tight end of 4.25%-area guidance brought in from wider 4.50% initial price thoughts. “Nice trade. Whispered cheap, then ratcheted down,” says a DCM banker away from the deal who calculated flat to 10bp concession to BTG Pactual’s 2016 senior bonds, on a curve adjusted basis. The bond was heard trading up about 0.25 points in the grey Wednesday afternoon. “Four percent was the line in the sand. There hasn’t been a ton of issuance in the space right now and with a lot of sub paper, this is shorter-senior [debt], though pricing wasn’t incredibly attractive for investors,” says a New York-based EM investor, noting fair pricing at 4.125%. Demand came from 367 accounts and featured US, EMEA, and LatAm accounts, with asset managers accounting for bulk of demand, according to bankers on the deal. The notes are part of a global medium-term notes program of up to $3bn with proceeds to be used to enable new business generation. Bank of America Merrill Lynch, Banco do Brasil, Bradesco, BTG Pactual and Santander managed the deal done through BTG’s Cayman branch. A greenshoe option of 5% is available during Asian market hours. Chile’s CorpBanca and Automotores Gildemeister, as well as Colombia’s Empresa de Telecomunicaciones de Bogota are expected to issue bonds as soon as today.
Cemig Picks Trio for Local Bond
Cemig has hired Banco do Brasil, HSBC and Banco Votorantim to manage a domestic bond sale it is preparing, according to a spokesman. The Brazilian utility’s Cemig Distribuicao unit is planning to raise BRL1.6bn ($788m) in three possible tranches, due 2018, 2021 and 2025. Cemig Distribuicao is rated Aa1/AA on a national scale. Cemig raised BRL1.35bn through its Cemig Geraco e Transmissao unit in a 3-tranche deal in March 2012 managed by BTG, HSBC and Banco do Nordeste.
CorpBanca Opts for 5-year Bond
Chile’s CorpBanca is aiming for a spread to UST in the mid-200bp range for a new 5-year international bond expected to price today, according to investors. The size remains to be determined, but is expected at $750m, according to ratings agencies. Making its cross-border debut, the Chilean bank had been considering issuing at up to 10 years maturity as it looks to help fund the $1.2bn purchase of Colombia’s Helm Bank agreed in October. The price talk comes after comparisons with peers Santander Chile, Banco del Estado de Chile, and Banco de Credito e Inversiones (BCI). The Baa1/BBB+ bank finished a roadshow Wednesday, via Citi and JPMorgan. CorpBanca is also preparing to price the international portion of an equity follow-on Tuesday, raising around $150m to begin a process expected to top $600m-equivalent, also to help replenish funds spent on expansion in Colombia. BTG Pactual is managing the equity sale, with Celfin and CorpBanca as co-managers.