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.
Category: Bonds
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.
Gildemeister Sets Target
Chile’s Automotores Gildemeister (AG) is out with initial price thoughts of 7.25%-area for what is expected to be a $300m 2023 NC5 bond, according to sources following the sale. The Ba2/BB vehicle importer and distributor operating in Chile and Peru wrapped up investor meetings in New York Wednesday and is pricing as soon as today. The deal is expected to be comped against AG’s own 2021 NC5 bonds, trading to yield inside of 7.0% Wednesday. JPMorgan is sole bookrunner. Following the issuance, Moody’s expects AG to pre-pay $70m of short-term debt plus $45m of long-term debt and maintain a cash position of at least $50m, what it considers to be a credit positive move from a liquidity standpoint. The deal should also improve AG’s debt maturity profile and allow the company to continue to execute network expansion in Chile and Peru and develop operations in Brazil, the agency adds. AG last visited the bond market in January 2012, retapping the 8.25% 2021s for $100m, to take the total outstanding issue size to $400m.
Marfrig Looks for Debt Funds
Brazil’s Marfrig is planning to visit with bond investors beginning this week, in meetings that will test the buyside’s appetite for lower-rated names in the Brazilian protein sector. The meatpacker is looking for $300m in new 2017 bonds, according to Moody’s, which assigns a B2 rating. A deal would follow a BRL1.05bn equity capital sale that raised less than the meatpacker had hoped. Proceeds are to be used to improve the company’s capital structure by lengthening its debt profile. The roadshow starts Friday in Switzerland, and hits Boston Monday before finishing in New York Tuesday. Bank of America Merrill Lynch, Bradesco, Banco do Brasil and Itau are managing. BAML took B2/B+/B+ Marfrig on a non-deal tour in November. Marfrig’s rating reflects still elevated leverage of adjusted gross debt/Ebitda of 6.4x as of September 2012, Moody’s says, noting a high amount of short term debt due over the next few quarters. Marfrig’s last bond sale was in May 2011 when it raised a $750m 2018 bond to yield 8.6%.
Olympic Concessionaire Taps Domestic Funds
Concessionaria Rio Mais, the consortium formed by builders Odebrecht, Andrade Gutierrez and Carvalho Hosken for work on Rio de Janeiro’s Olympic Park, has raised BRL315m ($154m) in Brazil’s local bond market, according to Anbima. The 1.5-year debenture pays the DI+0.73%. Itau coordinated the transaction, done under the rule 476 restricted format.
Santa Fe Still Looking for Funds
Argentina’s Santa Fe province is still considering borrowing $500m for infrastructure improvements, according to a government statement issued following conversations around the topic earlier this week. The funds would have a minimum 1-year maturity, and could come from the international or domestic market. Proceeds would target electrical, gas and health needs, including hospitals, water and roads. It was heard toward the end of last year to be preparing a $500m-equivalent borrowing program, to be submitted for legislative approval. The government says discussion is expected to continue in February.
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.