Costa Rica is heard aiming for a yield of low to mid 4%-area for a new benchmark 10-year bond, according to a people familiar with the sale. With pricing expected as soon as today, the sovereign is considering a $750m-$1bn size for its first international bond transaction since 2004. Citi and Deutsche Bank are managing the transaction. The Baa3/BB+/BB+ issuer 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.
Category: Bonds
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DCM Banker Leaves CS
Michael Schoen has left Credit Suisse, where he was head of LatAm debt capital markets, according to sources familiar with the matter. The bank has not indicated a replacement. Schoen had been with the bank since 2000, and was previously at DLJ, Lehman Brothers and JPMorgan. A bank spokesman declines to comment on the move.
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EFE Issue Gets Ready to Roll
EFE is heard planning to tap the Chilean domestic debt market in the first week of December, according to people familiar with the state railway company’s plans. It is heard looking to issue $350m-equivalent in UF-denominated bonds, at a maturity of more than 20 years and a with coupon in the range of 3.7%. The proceeds are expected to be used for refinancing liabilities and financing the company’s plans. Banchile-Citi is managing the transaction, rated AAA on a national scale and guaranteed by the state. EFE last issued in the domestic bond market in 2005, according to Dealogic data.
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Grupo Posadas Extends Early Tender
Grupo Posadas has extended the deadlines for a tender offer targeting its $200m outstanding in 9.250% 2015 notes, it says. The Mexican hotel operator will now give holders until November 23 to receive the $1,060 per $1,000 principal early tender price, and will pay $1,045 per $1,000 through the new November 30 final deadline. As of Tuesday, holders of approximately $60.5m of the notes, or 32.6%, had accepted. Posadas has also completed a roadshow this week marketing a new $225m 2017 bond. Bank of America Merrill Lynch and JPMorgan are managing the process. Fitch recently upgraded the credit rating of Grupo Posadas to B from B minus, in a move it says is driven by the successful divestiture of Posadas’ South American hotel operations for $275m, as well as expectations that leverage will remain stable after using the proceeds to reduce the company’s indebtedness.
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Sabesp Heads to Debenture Market
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.
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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.
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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.
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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.
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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.
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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.