Mexico’s Banco Nacional de Comercio Exterior (Bancomext) and Daimler Mexico are scheduled to issue in the domestic bond market today. State-owned Bancomext is planning to issue up to MXP2bn ($154m) in 10-year fixed-rate notes. Banamex and HSBC are managing the deal, rated AAA on a national scale. The development bank last priced MXP1.5bn in 2022 bonds at 5.75%, or Mbonos+49bp in July. Daimler is planning to price today up to MXP1.0bn ($77m) in 3-year floating-rate domestic bonds. The auto manufacturer’s notes come with a guarantee from the German parent. BBVA Bancomer and HSBC are managing the sale, rated AAA on a national scale. Daimler last came to market in June, when it priced a MXP1bn 2014 bond at TIIE+30bp.
Category: Bonds
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US Shops Lead DCM into Home Stretch
Heading into what could still be a very active final few weeks of 2012, JPMorgan leads the DCM league tables for LatAm cross-border issuance, while Citi is on top when both local market and cross-border transactions are included, according to Dealogic data. The region as a whole had issued $142.24bn total through Tuesday from 344 deals, including $110.50bn from 173 cross-border transactions. Both marks have already passed 2011’s respective $134.21bn and $94.89bn full-year totals to set new records. “There remains a lot of liquidity in the market, and it is there for investment-grade issuers and also moving down the credit spectrum,” says a senior banker at one of the top shops. Of the cross-border total, $20.3bn has come from double and single-B issuers, down from $32.7bn in the corresponding period in 2011 and reflecting the large portions of 2012 that were closed to lower-rated credits. In the overall rankings, JPMorgan has booked $13.51bn from 46 deals in the cross-border space, to lead HSBC ($12.94 from 51) and Citi ($12.71bn from 47). When domestic market transactions are added, Citi’s $18.73bn from 89 deals put it ahead of HSBC ($15.78bn from 82) and JPMorgan ($13.58 from 49). Bankers, already anticipating the traditional January rush, still see a few weeks of activity starting Monday. In the high-yield space, Mexicans Posadas (planning a $225m 2017) and Grupo Kuo ($200m 2022) are preparing issuance for next week, as is Colombia and Brazil-focused driller Tuscany International ($200m 2019). Grupo Mexico’s Mexico Generadora de Energia is testing the project bond market with a $564.2m 2032, and Cencosud is set to bring a $1bn 2022. In the sovereign space, El Salvador is expected this month with what should be a $500m-$800m 10-year.
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BCR Eyes Bond in 2013
Banco de Costa Rica is targeting the third quarter of 2013 for a $500m international bond debut, CFO Leonardo Acuna Alvarado tells LatinFinance. The official explains the bank expects to price 25bp wide of the sovereign, and that an additional investment grade mark for Baa3/BB+/BB+ Costa Rica is possible by next year, making pricing even more attractive. Costa Rica raised $1bn in 2022 bonds Friday at a 4.25% yield in its first cross-border deal since 2004. Acuna says that the bank is looking to raise funds for acquisitions in Central America, as it eyes becoming Costa Rica’s largest bank, up from second place at the moment, and becoming the third-largest in Central America. The official does not elaborate on acquisition plans or give additional details about the bond issuance.
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HY Credits Hit the Road
LatAm’s high-yield borrowers are hoping to keep the new issuance pipeline open through the end of the year, with Mexico’s Grupo Kuo and Colombia-focused Tuscany International Drilling set to meet investors. Canada-based Tuscany is preparing to issue $200m in 7-year senior notes, according to Fitch, which assigns a B+ rating. The land drilling services provider to oil and gas companies in Latin America plans to visit Canada, Latin America and the US this week, ahead of the possible B/B+ deal. The notes will be guaranteed by five of Tuscany’s subsidiaries and proceeds will be used to refinance existing revolving debt balances and for general corporate purposes. Tuscany operates predominately in Latin America and approximately 60% of its fleet is concentrated in Colombia and Brazil. Credit Suisse and Scotia are managing. Grupo Kuo plans to meet fixed-income accounts next week, after launching a tender targeting any and all of its $250m outstanding 9.75% 2017 bonds. The BB/BB rated holdco with activities in the consumer goods, chemical and automotive industries is starting a roadshow on Monday in London and Santiago, and visits Boston before wrapping up in New York and Los Angeles November 28. Credit Suisse, Citi and Bank of America Merrill Lynch are managing. Grupo Kuo in its tender is offering holders $1,053.75 cash per $1,000 principal before a November 30 early deadline, and $1,023.75 per $1,000 after, through the December 14 final deadline. Fellow Mexican Posadas is also preparing a deal for next week, likely a $225m 2017 NC3 at 8.25%, also to fund liability management.
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Uruguay LM Tops $850m
Uruguay is set to complete a liability management exercise putting holders of various old bonds into new 2045 bonds, after Friday’s close of the cash and exchange offer portions, it says. Following last week’s $500m sale of the new 2045s for cash, the sovereign will use the proceeds to repurchase bonds from 8 series of dollar bonds due 2013-2022 and 2 series of Euro-denominated bonds due 2016 and 2019 accepted during the cash portion of the tender. It will also issue $354m in additional 2045 bonds to holders who agreed to swap bonds from 14 series of dollar bonds due 2013-2019. BNP Paribas and Citi managed the process. Uruguay originally priced the 2045 at par with a 4.125% coupon last week. The bonds were trading at 99.00 in price Monday, according to a trader.
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America Movil Files Europeso Shelf
America Movil has filed a program for the regular issuance of peso-denominated bonds available to both domestic and international investors, according to regulatory documents. The 5-year shelf is good for the issuance of MXP100bn ($7.61bn) in the securities, to be called Titulos de Credito Extranjeros. Details on specific issuance from the program was not included. 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 will be the first of its kind worldwide. Banks associated with the program remain to be defined, according to the documents. Last year, Pemex Raised MXP10bn in a global depository note sale open to both locals and foreigners.
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Chilean Lender Receives International Rating
Fitch has given Chilean non-bank financial services institution Tanner Servicios Financieros a BBB minus international rating, it says, in what people familiar with Tanner say could be a first step toward a potential international issuance. Investment grade status means it could tap the market, and this could be a first step towards testing appetite, says a person familiar with Tanner. Chilean financial institutions have been active in international capital markets as of late, following longer tenors and liquidity. Now non-bank financial institutions may be contemplating getting in on the action. A potentially small issuance would be in store, he says. Fitch highlights Tanner’s credit risk ratios and stable financial performance, along with diversification in income, as among the factors that contribute to its read on the company. The outlook is stable.
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DCM Welcomes Costa Rica Return
Costa Rica achieved its pricing goal in a return to the international bond markets, getting $4.7bn in demand for a new $1bn 2022 bond. “It was important to return the international markets as method of financing and give investors Costa Rican paper in their portfolios,” Luis Liberman, Costa Rica’s Vice President, tells LatinFinance. In its first cross-border transaction since 2004, the Baa3/BB+/BB+ sovereign priced at 99.989 with a 4.25% coupon to yield 4.25%, the tight end of 4.25%-4.375%-area guidance which had followed low-to-mid 4% price thoughts. The bonds were trading up 0.25-0.65 points in the grey, according to investors. “This is a diversification trade for many investors who don’t own Costa Rican paper. We now have a benchmark and a choice outside of Costa Rica’s electricity company that will sit neatly in our portfolios,” says a participating London-based EM investor, noting fair pricing. Leads were heard looking to compress the deal below 4% Thursday, but the buyside was heard pushing for, and eventually getting a 4.25% yield. Liberman says the 4.25% yield level was the correct one for Costa Rica in the current market. Though difficult to comp against Costa Rica’s illiquid 2020 bonds, bankers and investors looked at Guatemala’s 2022 bonds – heard trading at 4.24%-4.12% yield – or at the 2021s of Costa Rica’s state-owned utility Instituto Costarricense de Electricidad, trading at 5.16%-5.03% yield. “The key positive credit metrics for Costa Rica are external debt at 5% of GDP with solid track record of economic growth (averaging 5%) almost irrespective of situation in the global economy,” says a participating US-based EM investor. The borrower plans to use proceeds to address existing debt, including a $250m bond coming due in 2013. The country’s congress has authorized the government to issue $4bn in bonds over a 10-year period. Citi and Deutsche Bank managed the sale, and the pair are also mandated on a new deal for fellow CentAm credit El Salvador that
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Grupo Mexico Generator Preps Project Bond
Grupo Mexico’s Mexico Generadora de Energia (MGE), an electric power generation project supporting mining operations, is preparing a $564.2m 2032 bond, according to Moody’s, which assigns a Baa2 rating to the deal. MGE is heard to be starting a roadshow today with expected visits to US and Latin American accounts through November 28. A 144A/RegS senior secured transaction with a 13-year average life is expected to follow. 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 built 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 on the deal, with Morgan Stanley as sole structuring agent.
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Itau Chile Plans Domestic Bond
Itau Chile will look to issue up to UF1m ($47m), it says, and can choose among 2023 and 2024 maturities. The bank could also upsize the deal, expected Thursday, to UF2m, as it has a total UF5m program and has already issued UF3m, says a person familiar with its plans. It will self-lead the deal, rated AA minus/AA on a national scale. In September, Itau issued UF1m, pricing a 14-year bond at 99.15 with a 3.75% coupon to yield 3.83%, or the BCU20 benchmark plus 120bp.