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%.
Category: Bonds
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.
Cemig Unit Targets Bond Market
Cemig Distribuicao is preparing to raise BRL1.6bn ($788m) in Brazil’s domestic bond market, it says. The distribution unit of utility Cemig plans three possible tranches, due 2018, 2021 and 2025. It does not give additional information on the sale, and a spokesman did not respond to a request for comment. 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.
ENAP Closes in on Domestic Bond
ENAP will look to issue about $300m-equivalent in Chile’s local market January 17, say people familiar with the Chilean state-owned oil company’s plans. 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. So far, the longer series is heard to be of the most interest, though final decisions have yet to be made. Sodimac is set to raise up to UF2.5m Thursday, as Chilean issuers look to get out ahead of the traditional February market slowdown.
Fleury Plans Debenture
Brazil’s Fleury is planning a BRL500m ($246m) domestic bond, it says. The medical services company is targeting a 2020 debenture paying the DI plus up to 1.0%. Proceeds will fund investment needs. Bradesco and Itau are managing the sale, according to a company official, to be done under the rule 476 restricted format. Fleury last tapped Brazil’s local market in 2011, raising a BRL150m 2016 at DI plus 0.94%.
Infonavit Preps Domestic Roadshow
Mexican mortgage and social services entity Infonavit is preparing investor meetings ahead of a MXP3.0bn ($234m) in UDI-denominated domestic RMBS sale expected in late January. The two days of investor meetings for the 28-year bond backed by Infonavit mortgages are expected during the week of January 14, according to sources following the process. Banamex and HSBC are managing the transaction, rated AAA on a national scale. Infonavit – through its Infonavit Total unit – last sold MXP1.97bn in UDI-denominated 2040 RMBS bonds in early June, pricing at 4.20%, via Banamex and Bancomer.
Mall Operator Meets Investors
Brazilian shopping mall operator Iguatemi is starting a roadshow this week as it prepares a BRL400m ($192m) sale in the domestic bond market, according to regulatory documents. Bookbuiding should begin February 7, and wrap up by February 22. A 2020 tranche pays the DI plus up to 1.0%, and a 2021 inflation-linked tranche pays a fixed rate, set to the NTN-B bond at the time of pricing plus up to 100bp. The size of each portion is to be determined during the sale process. The transaction is able to be upsized to as much as BRL540m. The sale would raise funds for investments, including acquisitions. Bradesco, BTG Pactual and Santander are managing.
Mexico Retap Leads off January Supply
Mexico has kicked off this year’s DCM issuance, reopening its 2044 benchmark bond to raise $1.5bn. Drawing $3bn demand, the sovereign took out a large piece of its funding needs ahead of what is expected to be heavy supply and possible continued movement of US treasury rates. “One of the risks for the year is that US treasuries will move higher. High caliber issuers like Mexico are doing the right thing, tapping the 2044 bonds now and not waiting for other big issues,” says a London-based portfolio manager. Recent fluctuations and expectations of possible higher yields ahead made some buyers reluctant to take on duration. “There is chat the fed could perhaps shut down QE earlier than expected and the market has reacted a bit so we have to be prudent,” says a buysider who opted out of the trade. Nonetheless, demand was enough for the Baa1/BBB/BBB sovereign to price with less than 10bp concession. UMS reopened the 4.750% coupon bond at 109.615 to yield 4.194%, or UST+110bp, at the tight end of 110bp-115bp guidance and earlier 115bp-area talk. The bond was trading at 109.35-109.65 Monday. The deal came with a 7bp-8bp concession against a G-spread of 102bp, Alejandro Diaz de Leon, Mexico’s public credit director, tells LatinFinance. “It was important for us to take advantage of attractive market conditions and still get a historically low yield and spread [on the long end]. After approval of the new [US] fiscal measures that took place last week abated the uncertainty in the market, and, though still in progress, those elements created a market tone that was good for us to move sooner rather than later,” Diaz de Leon says, noting participation from 123 accounts. High-quality buyers from the US pension and asset management space accounted for the bulk of demand, with significant participation coming from Asia and some from Latin America, according to a person familiar with the sale. Barclays and JPMorgan managed the transaction, which brings the bond’s total size to $4.4
Sabsep Starts Roadshow
Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) has started the roadshow period ahead of a BRL1bn ($483m) sale in Brazil’s domestic bond market, according to a prospectus, with bookbuilding scheduled to begin February 6 and finish by February 20. The Sao Paulo water utility has the option of up to three tranches, with the final terms to be set during bookbuilding. A 2018 tranche pays the DI plus 0.85%, and amortizes in three equal parts during the final three years. An inflation-linked 2020 tranche pays up to 5.70%, and amortizes in two equal parts during the final two years. An inflation-linked 2023 tranche pays up to 6.15% and amortizes in three equal parts during the final three years. A 15% greenshoe is also available. Proceeds repay existing debt. Banco do Brasil and Bradesco are managing the sale, rated AA+ on a national scale.