Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) plans to raise BRL1bn ($483m) in Brazil’s domestic bond market, it says. 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 would pay 100% of the DI, and amortize in three equal parts during the final three years. An inflation-linked 2020 tranche would pay 5.70%, and amortize in two equal parts during the final two years. An inflation-linked 2023 tranche would pay 6.15% and amortize in three equal parts during the final three years. A 15% greenshoe is also available. Proceeds would repay existing debt. Banco do Brasil and Bradesco are managing the sale. Sabesp is seperately in the process of raising BRL500m through a Rule 476 restricted format bond sale. The 2015 debentures would pay the DI+0.30% during the first six months and step up incrementally every six months to a final DI+0.70% rate. Banco do Brasil and Bradesco are also managing that sale, being done to repay debt.
Category: Bonds
Maxcom CFO Resigns
Miguel Cabredo has resigned as CFO of Maxcom Telecomunicaciones, the company says. CEO Salvador Alvarez will step in and fill his role at the Mexican telecom. Cabredo leaves for personal reasons, after 12 years at the company.
Microfinance Investor Buys into LatAm
Microfinance-focused investor Bamboo Finance has acquired a $105m controlling stake in equity fund Accion Investments, and with that, stakes in Peru’s Mibanco, Banco Popular in Honduras, and Paraguay’s Banco Vision totaling nearly $60m. In the transaction, the investment firm took nearly 10% in Mibanco, and almost 30% in Banco Popular, as well as preferred convertible shares for an undisclosed amount in Banco Vision, says Xavier Pierluca, CIO at Bamboo Finance. The majority of Accion’s investments are in Latin America, which has more mature microfinance companies, he says, with others in Africa. Microfinance institutions are maturing and requiring increasing amounts of capital, Pierluca says, adding that his firm sees consolidation across the sector and also among investment vehicles that target the sector. Kirkland & Ellis advised Bamboo, Goodman Proctor represented Accion International, the non-profit from which Accion Investments emerged, and Goodman Proctor represented the other shareholders of Accion Investments. Luxembourg-based Bamboo manages $250m and has an office in Bogota.
Uruguay Sets Tender Deadline
Following Tuesday’s issue of $500m in 2045 bonds, Uruguay will close its exchange offer to bondholders Friday, it says, with results expected Monday. The sovereign did not elect to exercise the greenshoe option to sell up to $50m in additional 2045s during Asian market hours, according to a source familiar with the matter. The new bonds traded down in the secondary Wednesday to around 99.125-99.375, according to investors, after pricing Tuesday at par. In the tender, Uruguay is offering more of the new 2045s to holders of $5.02bn outstanding in 12 series of dollar bonds due 2013-2036, and is also offering cash to holders of $2.72bn outstanding in 10 of the same series of USD and two additional Euro-denominated bonds. The total issuance of 2045 bonds through Tuesday’s sale and the exchange is not to top $2bn total, and the total cash payment in the cash portion of the exchange is not to exceed $500m. BNP Paribas and Citi are managing the process. Uruguay priced the new 2045 bonds at par Tuesday with a 4.125% coupon, to yield in line with 4.125%-area price talk.
Alpek Targets Low 300s
Mexican petrochemical company Alpek is expecting a yield in the low UST+300bp range for a new $600m, 10-year bond expected as soon as today, according to sources following the process. Following an $800m IPO in April, the Grupo Alfa-controlled polyester and plastics specialist plans to issue the senior unsecured debt, which comes with guarantees from Grupo Petrotemex and its main subsidiaries, as it seeks to address existing liabilities. The deal is expected to be comped mainly against peer Mexichem’s $750m 2022 bonds (Ba1+/BBB minus) issued in September, according to bankers following the process. Citi, Goldman Sachs, HSBC and JPMorgan are managing the BBB minus/Baa3 transaction.
Concha y Toro Uncorks UF Debt
Vina Concha y Toro has issued UF1.5m ($71m) in Chile’s domestic bond market. The winery priced the 6-year bond with a 3-year grace period at 99.45, with a 3.50% coupon to yield 3.63%, or government paper plus 119bp. The issuer, rated AA/AA minus on a national scale, saw some 2.7x demand, with interest in part driven by the fact it was a well-known household name investors could use to diversify their portfolios, and also by the scarcity of double-A borrowers tapping the short end of the market, say people familiar with the deal. Some say the issuance suggests the short-end market is becoming available again to issuers with tight pricing. Proceeds will refinance short-term debt. Banchile-Citi managed the sale.
LarrainVial Gets Colombian Authorization
LarrainVial has received authorization to operate as a broker in Colombia. The Chilean specialist investment bank has had an office in Colombia for several years, from which it distributes third-party funds, says a person familiar with the company’s plans. This move comes as part of its plan to become more of a regional player, and keep up with the other Andean banks that are doing so as the MILA platform integrates the equity markets in Peru, Colombia and Chile. Fellow Chilean Celfin is now controlled by Brazil’s BTG, which also controls Colombia’s Bolsa y Renta, and IMTrust has expanded regional ties through the sale of a controlling stake to Peru’s Credicorp.
Costa Rica Takes to the Road
Costa Rica plans to meet fixed-income accounts this week, ahead of what would be its first international bond transaction since 2004. The sovereign visits Los Angeles and London today and New York and Boston Thursday. Citi and Deutsche Bank are managing. Government officials have previously told LatinFinance that Baa3/BB+/BB+ rated Costa Rica would aim for a 10-year bond of up to $1bn, ideally pricing in the low 4% area, though it could also choose a longer tenor. Guatemala’s (Ba1/BB/BB+) $700m 2022, priced to yield at 5.875% in May, is one reference point. The country’s congress has allowed the government to issue $4bn in bonds over a 10-year period. It plans to use proceeds to address existing debt, including a $250m bond coming due in 2013. The sovereign hopes to have done two bond transactions totaling at least $2bn before the country’s 2014 elections.
El Salvador Mandates
El Salvador is heard awarding a mandate for a potential international bond transaction to Citi and Deutsche Bank, according to sources familiar with the borrower’s plans. The government is considering a sale before year-end or early next year, under an $800m authorization. Earlier this month, Moody’s lowered El Salvador’s rating to Ba3 from Ba2, while in July, Fitch lowered the outlook on its BB rating to negative from stable.
Interbolsa Threatens Local Corporate Issuance
Fallout from the government liquidation of Interbolsa could be a factor in the postponing of planned corporate issuances in Colombia’s domestic bond market, according to local fixed-income sources following several upcoming domestic sales. Gas companies Surtigas (COP580bn, or $318m), Gases de Occidente (COP200bn), and Promigas (COP200bn) were among those expecting to issue by the end of November, timing that is now less certain. Grupo Argos had also been preparing a COP750m convertible bond sale. With TES rates widening 20bp or more following the Interbolsa news, the sources say the plan is to wait for now and see where the market settles in the next few weeks. A recent issue from Colombian state-owned, nationally AAA-rated development finance agency Findeter was seen by sell-siders as satisfactory, but not necessarily strong enough to lead corporates to believe it is the right moment to issue. Interbolsa’s problems are not expected to be indicative of a systematic problem, and liquidity is largely expected to return to normal by the end of the month. Colombia’s financial markets regulator last week ordered the liquidation of Interbolsa’s brokerage firm, and has taken custody of its assets due to liquidity problems. Interbolsa fell short on funds, missing a payment for a COP20bn one-day loan, which was seen as indicative of risky repo-related cash decisions.