Brazilian rental car company Localiza has finalized the sale of BRL300m ($148m) in domestic bonds, according to Anbima. The 2019 debenture pays DI+0.95%, and amortizes beginning in year four. Caixa and Banco do Brasil managed the sale, done under the rule 476 restricted format. Localiza is rated AA+/Aa1. Earlier this year, Localiza tapped the debenture market for BRL500m.
Category: Bonds
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Odebrecht Tender Gets Strong Response
Holders of $379m of Odebrecht’s 2020 bonds and $428m of its 2023 bonds have accepted a cash tender offer, the construction company says, exceeding a combined $450m limit. Accepting creditors get $1,712.50 per $1,000.00 principal of the 2020 bonds, in an offer that expired Wednesday. For the 2023s, holders receive $1,190.00 per $1,000.00 principal of the 2023 prior to Wednesday’s early deadline, and $1,160.00 after, until a November 19 final deadline. There were $800m outstanding in the 7.0% 2020s and $500m outstanding in the 6.0% 2023s. The repurchase is funded by the October reopening of $450m in 2042 bonds. The Baa3/BBB minus 7.125% coupon notes reopened at 116.266 to yield 5.950%. Bradesco, BNP Paribas, Banco do Brasil, and Citi and Mitsubishi-UFJ managed the reopening and are handling the tender.
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Peru Housing Fund Eyes Bond
Peru’s Fondo Mivivienda is heard awarding a mandate for a potential international bond transaction, according to a source familiar with the state housing fund’s plans. An official announcement has yet to be made, but Citi is considered one of the top contenders for the business. Fondo Mivivienda engages in development of the Peruvian housing market, finances homeownership through financial institutions and manages allocation of subsidies for families to have access to homeownership. An international bond would be a debut, according to Dealogic data.
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Veracruz Targets November Securitization
The Mexican state of Veracruz is preparing to raise up to MXP6.9bn ($540m) through a securitization of future federal payment flows, according to a person familiar with the sale. The domestic market bonds are tentatively scheduled to price November 9, after the state initially targeted an October sale. Veracruz plans three separate tranches of MXP2.3bn each – a 15-year fixed-rate peso-denominated tranche with an 11-year average life, a 15-year peso floating-rate portion with an 11-year average life and a 25-year UDI-denominated tranche with a 19-year average life. The bonds feature a guarantee from development bank Banobras for up to 45% of the total size per tranche. Proceeds will be used for part of the state’s MXP30bn refinancing plan, as it seeks to refinance liabilities and improve its debt profile. Banamex, Banorte-Ixe and BBVA Bancomer are managing the deal, rated AA/AA+ on a national scale.
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Ample Space for Private Financing: Coutinho
There will be plenty of room for private sources to fund a coming “big wave” of infrastructure investment in Brazil alongside BNDES, Luciano Coutinho, the state development bank’s president, tells LatinFinance. “The main hindrance for the big participation of private forces in long-term finance was the very high short-term interest rates in Brazil. Turning this page was the big novelty. This idea that the BNDES is ‘crowding out’ usually comes from economists that do not know how the market works,” the official says. Coutinho explains the share of financing for infrastructure based on financial instruments will grow fast in the coming years, and reach “at least 20%-30% of the long-term financing market,” now that Brazilian investors are forced to diversify investment away from government paper. “In this way, BNDES’s absolute size will not shrink because the overall pie is growing. But almost all the addition of demand, the financial expansion, must be met by the market,” Coutinho says. The bank will seek ways to share financing of large individual projects. “Initially we will try at the minimum of 10%–15% or even more if the market has the appetite for the projects, either through long-term bonds or long-term credit. We’re also engaged in structuring infrastructure funds… we can be a minority partner, taking 10%-15% position in funds, so as to help the investment banks to structure private equity or other funds,” he says. Legislation such as that creating infrastructure debentures, as well as a PPP concession model successful in the electricity sector that can be applied to other areas, are other developments that should lure more private investment. Brazil must add another $40bn-$50bn per year in infrastructure investment, brining the total from 19% of GDP to 21% or more, Coutinho says.
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Brazilian Sets Price Target
Usina Sao Joao Acucar e Alcool (USJ) is aiming for a yield in the mid-10% range for a debut 2022 bond, according to investors. The Brazilian sugar and ethanol producer met with potential buyers in Europe, Latin America and the US, and was heard opting for an investor call with west coast accounts on the last day of its 4-day roadshow. Timing is unclear due to weather-related complications in the Eastern US, as is the case with other cross-border bond deals that were on the road this week. The issuance should be $200m-$300m size, according to a banker familiar with the sale. Credit Suisse, HSBC and Itau are managing.
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Bus Operator Postpones Securitization
Mexico’s IAMSA has put off a MXP3.5bn ($268m) securitization that had been scheduled to price today in the domestic market. “The bus operator decided to postpone as pricing expectations were not met,” says a person familiar with the transaction. IAMSA was looking to price in the Mbonos+390bp-area spread range for the 15-year bond. The new timing is unclear. Santander is managing the sale, rated AAA/AA minus on a national scale.
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CCR Unit Plans Local Bond
Concessionaria Rodovia Presidente Dutra (NovaDutra) is planning to raise BRL350m ($172m) in domestic bonds, it says. The road operator and unit of Companhia de Concessoes Rodoviarias (CCR) plans a 2015 debenture paying up to 105.8% of the DI. It is raising funds to repay short-term debt. Banco do Brasil and BTG Pactual are managing. NovaDutra is rated Baa3 on a national scale.
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Posadas Launches Cash Tender
Grupo Posadas has launched a cash tender offer targeting its $200m outstanding in 9.250% 2015 bonds, it says. In the tender expiring November 29, the Mexican hotel operator is offering holders $1,045 per $1,000 principal before a November 14 early deadline, and $1,015 after. Bank of America Merrill Lynch and JPMorgan are managing the tender. 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 to Access Bond Market
Sao Paulo water utility Sabesp is planning to raise BRL500m ($246m) in Brazil’s domestic bond market, it says. 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. The proceeds would be used to repay existing debt. Banco do Brasil and Bradesco are managing the sale, done under the rule 476 restricted format.