Tuscany International Drilling is out with initial price thoughts of low 10%-area as it prepares to price a $200m 2019NC4 bond this week. The Canada-based land drilling services provider predominantly operating in LatAM has wrapped up fixed-income meetings in Canada, Latin America and the US and is expected to price Thursday or Friday. The notes will be guaranteed by five of Tuscany’s subsidiaries and proceeds will be used to repay all senior secured term loans outstanding under its existing credit facility and for general corporate purposes. With lack of LatAm drilling comps and with US drillers trading at 6%-8%, the deal is expected to be an exercise in price discovery, though investors may look to comp the B/B+ borrower against non-drilling high-yield LatAm corps like BB minus/BB minus sugar, ethanol and bioenergy producer Usina Sao Joao Acucar e Alcool (USJ) which priced a $275m 2019 NC4 bond at 10.125% earlier this month that is now trading around 9.56%-9.70%. Approximately 60% of Tuscany’s fleet is concentrated in Colombia and Brazil. Credit Suisse and Scotia are managing.
Category: Bonds
YPF to Add to Domestic Bonds
Argentina’s state-controlled energy company YPF plans to reopen its 2017 domestic bonds for up to ARP1.36bn ($282m) Friday, it says. The bonds, originally sold for ARP750m earlier this month, pay Badlar+425bp. The issuance, via Nacion Bursatil Soceidad, comes under a $3bn program.
Posadas Raises $225m for LM
Grupo Posadas has priced a $225m 5NC3 bond, upsizing from $210m and raising funds for a cash tender targeting its $200m outstanding 9.250% 2015 bonds. The B2/B/B+ Mexican hotel operator priced the senior unsecured 2017 at 99.493 with a 7.875% coupon to yield 8.000%. This came at the tight end of 8.000%-8.125% revised guidance, in from 8.250%-area price talk. The bonds were trading up 0.375-1.000 points in the grey, according to investors. Though a difficult bond to comp, some investors looked at the issuer’s illiquid 2015 bonds, while others looked at single B Mexican names with similar debt levels. “The book grew throughout the day and the issuer was able to tighten significantly. It was an exercise in price discovery and pricing at 8.0% testifies to that,” says a person familiar with the sale. In the end, Posadas was able to generate nearly $1bn in orders from a mix of fund managers and retail investors, according to a banker familiar with the transaction. Proceeds will be used to fund the cash tender. Holders of $116.6m, or 58.3%, had accepted the offer as of the November 23 early deadline. Posadas offered holders $1,060 per $1,000 principal before the early deadline, and is offering $1,045 per $1,000 through the November 30 final deadline. Bank of America Merrill Lynch, Citi, Deutsche Bank, JPMorgan and Santander are managing the process.
AMX Readies Europeso
America Movil is heard readying the first transaction from its recently created Europeso program, and is monitoring the markets for a deal that could come as soon as today. The telecom is heard planning a MXP10bn-MXP15bn ($769m-$1.15bn) 10-year transaction. The securities, to be called Titulos de Credito Extranjeros, are peso-denominated bonds available to both domestic and international investors, according to regulatory documents. Banamex, BBVA Bancomer, Deutsche Bank, HSBC, Morgan Stanley and Credit Suisse are managing the sale, rated AAA on a national scale. CFO Carlos Garcia Moreno told LatinFinance in July that the company intended to create such a program to facilitate regular liquid peso-denominated issuance, likely coming to market once per quarter. The official estimated that this Europeso structure would be the first of its kind worldwide.
Argos Lays Foundation for Convert Sale
Colombia’s Grupo Argos is expected to issue COP500bn ($274m) in convertible bonds in a process starting today and expected to price Wednesday, say sources familiar with the Colombian conglomerate’s plans. The sale may be upsized to COP750bn. The 3-year bond comes with a 5.0% coupon and is convertible into preferred shares at the holder’s discretion during the life of the bond, and mandatorily at maturity. Bancolombia is leading the deal, rated AA+ on a national scale, with Bolsa y Renta, Corredores Asociados, Correval and Serfinco as bookrunners. In a research report, Bolsa y Renta highlights the papers as a medium-term play for investors that is ideally held to maturity.
Banrisul Reopens Tier 2 for $275m
Banco do Estado do Rio Grande do Sul (Banrisul) emerged Monday with a $275m reopening of its existing Tier 2 2022 bond. The BB+/Ba1 bank reopened the 7.375% coupon bonds at 109.943 to yield 5.95%, tight to the 6.00% (+/- 5bp) guidance, revised from earlier 6.10%-area. Bradesco and JPMorgan managed the transaction. The sale brings the total outstanding size to $775m.
BB Looks to Spin off Insurance Arm
Banco do Brasil is planning to put its insurance operations into a new company that may IPO next year, it says. The state-controlled bank is seeking to consolidate its insurance businesses into a single company, BB Seguridade, to lower costs, increase scale and be better prepared for possible expansion. BB Seguridade would control Banco do Brasil’s two insurance joint ventures with Madrid-based Mapfre, and the bank plans to also expand into dental and health insurance brokerages. The listed company would directly control two holdcos, one responsible for insurance brokerage activities and the other for all other insurance operations. It does not give any additional details about the possible IPO, other than that the sale would include both primary and secondary shares. Banco do Brasil is Brazil’s largest bank, and its insurance operation number two behind Bradesco’s.
BCP Preps Local Issue
Banco de Credito del Peru plans to issue up to PES100m ($38m) today in the domestic bond market, it says, with the ability to upsize the issuance to as much as PES200m. The 2022 bonds would represent the tenth issuance under a PES1.8bn program. Orders opened Monday for the deal, managed by BCP unit Credibolsa and rated AAA/AAA on a national scale. In October, BCP sold PES200m ($77m) in domestic bonds, with the 2022 pricing at par with a 5.5% coupon.
Caterpillar Credito Looks to Mexican DCM
Caterpillar Credito, the financing arm of Mexico’s Caterpillar subsidiary, plans to issue up to MXP1bn ($77m) in floating rate bonds on December 5. The bonds, guaranteed by Caterpillar Financial Services, have a 2016 legal maturity and 2.5-year average life. The deal rated AAA on a national scale comes with initial price thoughts of TIIE+35-40bp. Proceeds will be used for general corporate purposes. HSBC is the sole lead.
Cofide Retaps for $100m
Peru’s Cofide has returned to the DCM to raise $100m in a reopening of its 2022 bonds. The 4.750% coupon notes reopened at 111.25 to yield 3.138%, in line with 111.25-area guidance. Deutsche Bank and JPMorgan led the sale, which gives the Peruvian development bank a $500m outstanding size. Cofide originally priced the $400m 10-year in February at a 4.95% yield.