In its international DCM debut, Santander Mexico has raised $1bn in 2022 senior unsecured bonds while getting $4.3bn in demand. The addition of debt follows a well-received $4.1bn IPO in September. The BBB/BBB+ rated transaction priced at 98.183 with a 4.125% coupon to yield 4.351%, or UST+260bp, the tight end of UST+265bp-area guidance which followed high 200bp talk. The bonds were trading up 0.125-0.375 points in the grey Tuesday afternoon. Some investors reported looking at BBVA Bancomer’s (A1/A minus) $1bn 2022 Tier 2 bonds, seen as a somewhat useful comp despite differences in subordination. “Santander is coming at about 60bp behind BBVA. This is senior debt and one has to give Santander the benefit of the doubt, given its balance sheet and status as a first time issuer. This is a Mexico story and as the economy grows at a moderate pace we may see more from Santander Mexico as it seeks to tap large sources of funding,” says a US East Coast-based EM investor. A Swiss-based investor found Santander’s spread attractive compared to AA3/A/A+ rated Santander Chile quoted at a spread of UST+190bp. More than 250 accounts were heard participating. Santander intends to use proceeds to extend duration of liabilities and to refinance debt maturing in the first half of 2013. Deutsche Bank, Goldman Sachs and Santander managed the transaction.
Category: Bonds
Sifco Aims Bond
Brazil’s Sifco is aiming for a yield of 12.75%-area for a $200m 2018 bond, according to investors following the deal, expected to price as soon as today. The manufacturer of forged components for the auto industry is looking to replace its $75m in 11.50% 2016 bonds, and recently launched a cash tender offer. Sifco is offering $960m per $1,000 principal in an offer expiring November 20 and subject to the new bond sale. Goldman Sachs, Citi, and Banco Pine are managing the tender offer and also took Sifco to meet investors through last week. The 2016 was originally sold last year through a RegS transaction.
Ajecorp Returns with Surprise Retap
Peru’s Ajecorp has returned to the DCM market to raise $150m, reopening its 2022 bonds on the back of some $50m-$75m reverse inquiry. The 6.50% coupon notes reopened at 109.257 to yield 5.25%, in line with 5.25%-area guidance revised from 5.50%-area. Demand for the retap hit approximately $955m. BAML and Interbank led the sale, which brings the bottler’s outstanding size to $450m. The BB/BB+ bonds were quoted trading to yield 4.65%-4.75% before announcement, according to an investor. Ajecorp originally priced the 2022 in May at par. Ajecorp is a Netherlands-incorporated subsidiary of Grupo Embotelladora Atic, a holdco for the Ananos family, which controls the bottler known as Aje.
Chilean Lender Brings 5-year
Banco del Estado de Chile has printed a $500m 2017 bond, after generating more than $1bn in demand. The government-owned lender priced at 99.650 with a 2.00% coupon to yield 2.074% or UST+137.5bp, in line with UST+137.5bp-150bp guidance. The bonds were trading up 0.125 points in the grey, according to a trader. Leads were heard calculating 0bp-2bp concession, based on a G-spread level of 135bp for the bank’s outstanding 2022 bonds. In all, about 100 accounts participated. Citi, Deutsche Bank, HSBC and JPMorgan led the 144A/RegS transaction, rated Aa3/A+/A+. The sale follows the $500m 2022, sold in February via Deutsche Bank and JPMorgan.
Itau Adds Tier 2 Debt
Itau has raised $1.7bn in 2023 Tier 2 bonds, seeing orders north of $6.5bn. The Brazilian bank priced the unsecured subordinated notes at par with a 5.125% coupon, to yield in line with 5.125%-5.250% guidance. The bonds traded up 0.45-0.75 points in the grey Monday afternoon, according to an investor. Itau was seen as opting for size over pricing, offering investors a decent concession versus levels on its outstanding 2021 and 2022 Tier 2 bonds. “The deal priced 30bp cheap to the existing curve,” says one participating investor. Around 300 accounts participated. The issuer has an option to exercise up to 10% greenshoe during Asian hours. Proceeds will be used to strengthen the bank’s capital structure and for general corporate purposes. Banco do Brasil, Itau, JPMorgan and Santander managed the Baa2/BBB sale. The sale follows a similar $1.25bn 2022 Tier 2 sale in July. Beginning January 2013, banks will no longer be allowed to issue under the current Tier 2 format.
QGOG Floats Debut Corporate Bond
Queiroz Galvao Oleo e Gas (QGOG) has issued its first non-project bond in the cross-border markets, raising $700m, up from an originally planned $600m. The BB+/BB minus Brazilian oil services provider drew more than $3bn in orders. The 2019 NC4 priced at 98.612 with a 6.250% coupon to yield 6.500%, at the tight end 6.750%-area guidance revised from 7.000%-area. Investors put in for more than $3bn in orders, with some noting a pickup. “It’s a great credit, and this deal came 200bp-300bp back to existing bonds,” says a participating EM portfolio manager, referring to the issuer’s investment-grade project bond. Closer comps were difficult to find. Among other considerations, investors saw QGOG’s predictable cash flows from its Petrobras contracts offsetting the issuer’s 6x-plus net leverage. Nearly 200 accounts participated, according to people familiar with the sale. Proceeds from the issuance will be used to refinance short-term debt. BAML, HSBC and Citi managed the transaction, done the QGOG Constelation unit. QGOG had previously tapped the project bond market last year, raising a $700m 7-year drillship securitization priced to yield 5.45%.
Santander Mexico Talks Price
Santander Mexico is heard aiming for a yield of UST plus high 200bp for a new 10-year benchmark bond, according to a person familiar with the sale. The bank has wrapped up fixed-income investor meetings, and is expected to price as soon as today. The Mexican lender is planning up to $1bn for its planned 10-year senior unsecured bond sale, S&P says while assigning a BBB rating. Deutsche Bank, Goldman Sachs and Santander are managing.
Southern Copper Headlines DCM Rush
Peru’s Southern Copper (SCC) raised $1.50bn on a day that saw $4.55bn in LatAm DCM issuance, as the backlog caused by last week’s severe weather in the US was cleared. Facing 2Q numbers going stale and today’s US elections, several issuers who met investors last week were eager to get their deals out the door. “It sounds cliche, but the market has a lot of cash to put to work and anything down the middle in terms of risk is doing pretty well. We’re seeing a lot of supply and will continue to do so in the coming weeks with little windows of stability,” says an EM-focused fund manager perusing Monday’s various offerings. SCC picked up with plans it put off for a dual-tranche issue in September, funneling most of the funds into a $1.3bn 2042 bond and continuing the trend of LatAm issuers locking in low rates for the long-term. A $300m 2022 priced at 99.657 with a 3.500% coupon to yield 3.541%, or UST+185bp, tight to 200bp-area guidance that followed low 200bp price talk. The$1.2bn 2042 priced at 98.207 with a 5.250% coupon to yield 5.371%, or UST+250bp, at the tight end of 260bp-area guidance that followed mid-to-high 200s price talk. The 10-year level was seen coming versus a G-spread of about 215bp for the issuer’s outstanding 2020 bond, with the issuer’s outstanding 2040 trading at about 260bp prior to launch. The Baa2/BBB/BBB Peru-based unit of Mexican miner and railroad operator Grupo Mexico saw $7bn in demand, slightly more of which fell into the long tranche, according to bankers on the deal. More than 250 accounts bought the 10-year, and more than 200 played in the 30-year. The bulk of buyers came from the US and Europe, with some participation from LatAm-based investors. Bank of America Merrill Lynch, Credit Suisse, HSBC and Morgan Stanley managed the sale. SCC cancelled a roadshow in September following the announcement of a US court judgment against Grupo Mexico. It raised $1.5bn in 2020 and 2040 bonds in April 2010.
Winery Preps Domestic Bond Issue
Vina Concha y Toro will look to tap Chile’s local bond market on November 14, raising up to UF1.5m ($71m) to refinance short-term debt. The Chilean winemaker can choose from a 6-year UF-denominated tranche with a 3-year grace period and 3.50% coupon, a 12-year UF tranche with a 2-year grace period and 3.60%coupon, and a 12-year UF tranche with a 7-year grace period and 3.60%coupon. Banchile-Citi leads the deal, which held its roadshow last week. Concha y Toro is rated AA/AA minus on a national scale.
Daimler Looks to MXP Sale
Daimler Mexico is planning to issue up to MXP2.0bn ($153m) in 2016 floating-rate domestic bonds November 21, according to a regulatory filing. BBVA Bancomer and HSBC are managing the car manufacturer’s sale, rated AAA on a national scale. Daimler last came to market in June, when it priced a MXP1bn 2014 bond at TIIE+30bp.