Order books for Cencosud’s 2022 bond, expected to price today, were heard hitting more than $2bn Wednesday afternoon, as the issuer indicated a UST+375bp-area yield. The Baa3/BBB minus Chilean supermarket operator is expected to raise $1bn, and finished a roadshow Wednesday. JPMorgan, BBVA, BNP Paribas, Itau, Mitsubishi-UFJ, Mizuho, and Santander are managing the sale, done to raise funds for the recent $2.6bn purchase of Carrefour’s Colombian operations. Cencosud is also readying a $1.5bn equity capital increase to cover the rest of the takeout, expected in December or January. Its last dollar bond was its cross-border debut in January 2011, raising $750m in 2021 notes.
Category: Bonds
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CFR Talks Price
Chile’s CFR Pharmaceuticals is heard aiming for a yield in the neighborhood of 5.50%-5.75% for a $300m 2022 NC5 bond, with pricing expected as soon as today. Investor interest was heard reaching $1bn as of Wednesday. JPMorgan and Deutsche Bank are managing the BBB minus/BB+ deal. Fresh off of its domestic DCM debut, the pharmaceutical company now turns abroad, raising funds for the $562m acquisition of Colombia’s Laboratorio Franco Colombiano (Lafrancol) agreed in August. CFR raised UF3m ($142m) through a domestic 2033 bond earlier this month.
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Corpbanca Issues Domestic Subordinated Bonds
Corpbanca has issued UF6.63m ($315m) in subordinated bonds in Chile’s local market. It priced a UF1.13m 4.00% coupon 24-year tranche at a 4.28% yield, and a UF5.5m 4.00% coupon 27-year tranche at a yield of 4.48%, according to industry sources. In October, it was heard planning a subordinated bond sale in the international markets, as part of the funding for its $1.28bn acquisition of Helm Bank. Chile’s longer tenors and the ability to avoid international funding costs were among the reasons for choosing the Chilean market for its issuance, says a person familiar with the company’s plans. Corpbanca managed the deal itself.
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DF Clinches Local Debt
The government of Mexico’s Distrito Federal has issued MXP2.5bn ($193m) in the domestic bond market. The 2027 bonds priced at 6.85%, or Mbonos+85bp, in line with expectations. The deal was done slightly differently to most, according to a source familiar with the sale, with books closing once the MXP2.5bn amount was reached, though the short time to do so implied heavy demand. Guaranteed by the federal government, the bond is rated AAA on a national scale. Banorte-Ixe and Santander managed the transaction. In December of last year, DF sold MXP1.77bn in 5-year bonds at TIIE+30bp.
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El Salvador Lands Below 6%
El Salvador has priced a long-awaited $800m bond, getting robust demand despite tightening below 6%. Demand for the new 2025 topped $5bn, according to investors following the sale. Starting at low-to-mid 6%-area indications, the sovereign tightened to 5.875%, pricing at 99.984 with a 5.875% coupon to yield 5.875%. The bonds were trading up 0.50-0.75 points in the grey, according to a trader. The issue was seen conceding 5bp-10bp versus the issuer’s curve. “El Salvador looks fair and not relatively cheap to initial price talk. But demand is clearly there for yield. Assuming some of this will go to local pension funds means that demand outstrips supply,” says a New York-based portfolio manager following the trade. At least $400m of the proceeds will be used to retire short-term Letes, with the remainder to be used to change the use of resources or to cover the fiscal deficit. Citi and Deutsche Bank managed the Ba2/BB minus deal. The continued issuance of Letes – at rates above 5% for 6-month paper – made little sense, Nomura says, with the international markets offering the government cheaper rates. The issuance will reduce El Salvador’s short-term debt, Nomura adds, lowering liquidity risk until the February 2014 presidential election and allowing the new administration to strengthen the country’s fiscal outlook.
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Emgesa Plots COP Issue
Emgesa will look to issue COP350bn ($192m), expected on December 12, and could upsize that amount to COP500bn, says a source familiar with the Colombian generation company’s plans. It can choose from 10 and 12-year maturities, at a fixed rate or linked to inflation. The proceeds will be used to repay debt and also to help finance the El Quimbo hydroelectric project in southwestern-central Colombia. Corredores Asociados, Correval, Serfinco and BBVA are managing the sale. Its bond program is rated AAA on a national scale.
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Mexican Banks Raise Domestic Bonds
Inbursa, Scotia and Interacciones have each raised domestic bonds in what continues to be a busy week for Mexico’s local market, led by Inbursa’s MXP8.05bn ($621m) offer. The Carlos Slim bank issued MXP6.43bn in 2014 bonds at TIIE+20bp, and MXP1.62bn in 2016 bonds at TIIE+30bp. Total demand topped 1.2x, with both tranches pricing in line with expectations. Inbursa, Banamex, Bancomer, HSBC and Banorte-Ixe managed the transaction, rated AAA on a national scale. Inbursa last issued in October, selling MXP5bn in 2015 floating-rate bonds paying TIIE+25bp. It has issued MXP16bn this year and has sold MXP50bn in outstanding debt in the domestic market to date. Meanwhile, Scotia’s Mexican operation raised MXP2bn through the sale of 2015 bonds, pricing at TIIE+25bp. Scotia led the deal rated AAA on a national scale itself. Finally, Interacciones sold MXP700m ($54m) in 2022 subordinated bonds, pricing at TIIE+250bp, in a self-led deal managed rated Baa1/A on a national scale.
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Mexican Toll Road Sets Bond Target
The Monterrey-Saltillo toll road is scheduled to sell up to MXP4.5bn ($345m) in Mexico’s domestic bond market as soon as next week. The concession owned by Spain’s Isolux-Cosan is looking to price the 25-year UDI-denominated notes at UDIbonos+390bp, according to a source familiar with the sale. Proceeds will be used to repay bank loans and subordinated debt with the government Fonadin fund. The toll road has been operational for almost a year. Santander, ING and Bank of America Merrill Lynch are bookrunners on the transaction, rated AA/AA+ on a national scale.
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MG Entity Completes Local Bond
Brazil’s Companhia de Desenvolvimento Economico de Minas Gerais (Codemig) has raised BRL700m ($335m) in domestic bonds, according to Anbima. The agency’s 2020 debenture pays DI+2.25% and amortizes monthly beginning in 2014. Itau managed the sale, done under the rule 476 restricted format.
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MGE Seeks 5-Handle
Mexico Generadora de Energia (MGE) is out with initial price thoughts of mid-to-high 5%-area for a $564.2m 2032 bond, expected as soon as today. The Grupo Mexico-controlled electric power generation project wrapped up fixed-income meetings with US and LatAm accounts Wednesday. The Baa2/BBB bond features a 13-year average life. The 500 megawatt gas-fired electrical power facility has a 20-year power purchase agreement to supply Grupo Mexico’s Mexicana de Cobre and Buenavista del Cobre mines. The project is being developed in two phases, which are 88% and 51% complete, respectively. The bonds come with collateral of first priority security on all assets, collection rights under contracts, and equity interests of the issuer. Bank of America Merrill Lynch, HSBC and Morgan Stanley are joint bookrunners, with Morgan Stanley as sole structuring agent.