In its international DCM debut, Scotiabank Peru has raised $400m in new 2027 NC10 Tier 2 bonds, while getting $2.3bn in demand from at least 170 accounts. The Bank of Nova Scotia subsidiary priced at par with a 4.50% coupon, to yield tight to 4.625%-area guidance, which followed 5%-area price thoughts. Investors reported pricing inside of Banco de Credito del Peru’s (Baa3/BBB) $350m 2027 Tier 2 bonds trading to yield 4.70%-4.80% and seen as a direct comp despite differences in rating. “Bottom line great transaction and it shows the high quality credit of Scotiabank and fundamentally strong market. If you’re a good credit you will have sufficient oversubscription to tighten pricing and in this case below your peers,” says a DCM banker away from the trade. The 15-year subordinated step-up bonds have the fixed coupon for 10 years and then revert to a floating rate. Proceeds will be used to strengthen the bank’s capital. Bank of America Merrill Lynch, Goldman Sachs and Scotia managed the sale. The deal represents Scotia Peru’s first dollar offering since a $175m diversified payment rights securitization done privately in 2010, according to Dealogic data.
Category: Bonds
CMPC to Visit ECM, DCM
Empresas CMPC plans to sell bonds and raise equity capital in 2013, it says. The need comes after the Chilean pulp and paper company received final board approval to start the $2.1bn expansion of its Guaiba plant in Brazil. It expects to raise $500m in equity capital in the first half of 2013, followed by another $250m at a later point, and will seek shareholders’ approval January 24. It will also look to sell $500m in bonds in the international or local markets. Also, it expects a $1.2bn 10-year loan from BNDES and will look to shed some non-core assets, such as a 7.7% it holds in financial services firm Bicecorp.
EFE Brings Size Back to Chilean Market
EFE has issued UF7.8m ($373m) in domestic bonds, giving the Chilean local market its largest sale in at least three years. The state railway company priced the 2037 bullet at 100.13 with a 3.70% coupon to yield 3.79%, or the BTU30 bond plus 91bp. The issuance saw 2.2x demand. Banchile-Citi managed the transaction, rated AAA on a national scale and guaranteed by the state. EFE last issued in the domestic bond market in 2006. Thursday’s sale was the largest domestic transaction in USD-equivalent terms since a $472m-equivalent deal from Transelec in 2006, though in purely UF terms it is only the largest since a UF10m sale from CMPC in 2009, according to Dealogic data.
Emgesa Powers toward Local Issue
Emgesa is planning to issue up to COP300bn ($166m) in Colombia’s domestic market on December 12, with the ability to upsize to COP500bn, it says. The generation company’s bonds are expected with a maturity between 10 and 15 years, and either inflation-linked or fixed-rate. The funds will be used for refinancing intercompany debt and financing for the El Quimbo hydroelectric power project. The issuance is rated AAA on a national scale.
Hites Taps Private Placement
Chilen retailer Hites has issued a UF1m ($48m), 2017 6.2% bond in a private placement, according to sources following the sale. The proceeds will be used for investment and to prepay debt. Celfin managed the sale, rated BBB+/BBB on a national scale.
Nafin Retaps for MXP2bn
Mexico’s Nacional Financiera (Nafin) has reopened its 2022 bonds for MXP2bn ($155m), after receiving 1.5x demand, says a banker on the deal. The 5.69% coupon bond reopened to yield 5.95% or Mbonos+50bp. Participation came from Afores, mutual funds and trading desks. The outstanding size is now MXP4bn. Nafin priced the original MXP2bn bond in August, also at Mbonos+50bp. BBVA Bancomer and Banamex were the leads on the transaction, rated AAA on national scale.
Paraguayan Dials in Robust Demand
Telefonica Celular del Paraguay (Telecel) has priced a $300m 2022 NC5 bond in a debut transaction that signifies a continued broadening of DCM access for Paraguayan credits. The first non-bank international issuer from Paraguay drew $4bn in orders and saw a pop in the aftermarket. The BB telecom priced at par with a 6.75% coupon to yield tight to the low 7%-area initial price thoughts. The bond traded up 2-3 points in the grey, traders say. Investors following the deal say Telecel attracted US high-yield accounts and dedicated EM buyers. “We were excited at 7.0%, but clearly a lot of people stayed once it tightened with some accounts heard looking to stick around even at 6.5%,” says a New York-based EM investor citing 7.00% as fair value and opting out of the trade at 6.75%. The buyside saw the deal as a loose proxy for Paraguayan sovereign risk. “Paraguay is highly exposed to agriculture and commodities, but the country is run conservatively so we’re not too concerned about political issues,” says a participating East Coast EM investor. The buyer adds that 6.75% was a justifiable level to help compensate investors for questions arising over Telecel’s capex plans and pending regulations from Paraguay’s congress. Telecel holds a strong market position as the main operator in the Paraguayan telecom sector. Despite increased competition in recent years, it holds a comfortable 57% market share in the mobile segment. While it has 100% penetration in the telephony segment, it is looking to branch out in broadband and pay TV. It recently acquired Cablevision, which holds 89% market share in pay TV and sizeable fixed broadband operations. Proceeds from the bond issue will be used to repay a $150m bridge loan raised for the Cablevision buy, with the balance to finance capex and potential spectrum license costs. Citi and Morgan Stanley managed the deal. Telecel operates the Tigo brand and is a subsidiary of Millicom International Cellular. The deal follows Banco Continental P
Brazil, Mexico Most Traded in EM: EMTA
Brazilian debt instruments saw $248bn in turnover during 3Q to lead all EM, according to EMTA, and are up from $196bn during the same time period in 2011. Mexico came in second, at $158bn. Brazilian volumes represented 19% EM trading. Brazil was also the leader in local market instruments, with $197bn. In terms of individual EM Eurobonds, Brazil’s 2021 bond was the second most traded in 3Q 2012, at $5bn, behind Russia’s 2030. Mexico’s 2022 and Petrobras’ 2021 followed with $3bn each.
CAF Joins Dim Sum Club
Corporacion Andina de Fomento (CAF) is the latest borrower to tap the growing offshore Chinese renminbi (RMB), or Dim Sum, market, selling a CNH600m ($97m) 3-year bond. In becoming the region’s third issuer to sell a publicly placed Dim Sum bond, the bank continues to diversify funding sources outside of its well-established USD, EUR and JPY and CHF curves. The Aa3/ A+/A+ supranational lender priced at par to yield 3.55%, inside of 3.65% initial guidance. Demand hit approximately CNH1.2bn with 36 accounts participating, according to a source with knowledge of the transaction. Institutions accounted for 46%, insurance companies 20%, banks 12%, private banks 11% and other investor types 11%. Hong Kong represented 44% by geography, Taiwan 27%, Singapore 17%, Europe 9% and other Asian buyers 3%. Bank officials told LatinFinance in October that such a transaction would have to be competitive versus its dollar curve with issuance representing an opportunity for high grade investors looking for EM exposure in the A+ rated space. CAF has seen Dim Sum deals from the World Bank and IFC as pricing reference points. The bank has already finished its $2.5bn financing plan, with Wednesday’s opportunistic deal a means to secure pre-funding for 2013. It is also reaching new investor types that typically gravitate towards supranational paper, according to sources familiar with the deal, such as central banks and government-owned institutions. CAF has issued in six markets this year, including three Swiss Franc deals and private placement transactions in Germany. It is currently evaluating the Australian markets, where only Pemex has planted the LatAm flag, as a new source of funding. HSBC and Standard Chartered managed the transaction, the latest in a series of LatAm Dim Sum deals. Santander Chile, BTG Pactual and Bradesco have brought smaller, privately placed deals in recent weeks, with Bradesco returning Wednesday to raise CNH215m in 2014 bonds, pricing at par with a 3.90% yield,
Caterpillar Digs for MXP Debt
Mexico’s Caterpillar Credito has issued its second domestic bond under a MXP5bn program, raising MXP1bn ($77m). The financing arm for Mexico’s Caterpillar subsidiary priced the 2016 at TIIE+40bp, in line with TIIE+35bp-40bp price thoughts, and inside of TIIE+43bp secondary trading levels of its 2016 bond sold last year. Demand reached 1.8x, with participation from a diversified mix of investors including mutual funds, insurance companies, and private banking, according to people following the sale. The bonds, guaranteed by Caterpillar Financial Services, have a 2.5-year average life. Proceeds will be used for general corporate purposes. HSBC managed the deal, rated AAA on a national scale.