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.
Category: Bonds
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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.
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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.
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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.
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Mexican Toll Road Nears Bond
The Monterrey-Saltillo toll road plans to raise up to MXP4.5bn ($345m) in Mexico’s domestic bond market on November 27. The concession is looking to offer UDI-denominated notes with a maturity of approximately 25 years, with proceeds repaying bank loans and subordinated debt with the government Fonadin fund. The toll road, owned by Spain’s Isolux-Cosan, has been operational for almost a year. Santander, ING and Bank of America Merrill Lynch are bookrunners on the transaction, rated AA/AA+.
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Rio Rail Operator Gets Local Debt
Supervia Concessionaria Transporte Ferroviario has raised BRL150m ($73m) in domestic bonds, according to Anbima. The operator of a rail network in Rio de Janeiro State is paying the DI+1.5% on the 2014 debenture. Banco do Brasil managed the sale, done under the rule 476 restricted format.
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Sifco Postpones LM Plans
Brazil’s Sifco has postponed a $200m 2018 international bond sale and cash tender offer for its 2016 bonds, according to investors who have seen a statement from the company. “Sifco announced today that it has temporarily suspended its bond plans and cash tender because of market conditions, opting instead for taking more favorable alternatives in the Brazilian market,” the company is said to inform the buyside. The issuer was heard considering widening yield guidance from the 12.75%-area level it had communicated, before choosing to postpone. The manufacturer of forged components had met accounts on four continents to market the operation. In the tender, Sifco had been targeting any and all of its $75m outstanding 11.50% 2016 bonds, offering $960m per $1,000 principal. The transaction was subject to the sale of the new 2018s. Goldman Sachs, Citi, and Banco Pine were managing investor meetings and tender offer.
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Uruguay Brings Long Bond for LM
Uruguay emerged Tuesday to sell $500m in new 2045 bonds, as part of a liability management exercise aiming to replace shorter-term debt. On the back of a brief US roadshow ending November 2, the Baa3/BBB minus/BB+ sovereign took advantage of cheap rates, and recent rating upgrades, in its first new issuance this year. The 2045 priced at par with a 4.125% coupon, to yield in line with 4.125%-area price talk. The bonds were trading at reoffer in the grey Tuesday afternoon, according to a trader. Demand was heard topping $1bn, and a 10% greenshoe was possible during Asian hours. The level compares to the 3.85% yield seen Tuesday on Uruguay’s 2036 bonds. “Tender prices look fair and give investors incentive to tender. We are given an opportunity to own a new benchmark at market price, though the outstanding 2036 bonds are trading a long way from par,” says a participating London-based EM investor. Though the pricing comes at a level offering less value than other regional long bonds, the investor adds, notably Chile’s 2042. “We like the credit and Uruguay is mostly doing the right thing, but we didn’t see value for that kind of long duration at that level,” adds an EM investor who passed on the deal. Proceeds from Tuesday’s sale will fund part of a tender offer to existing bondholders expiring Friday. Uruguay is targeting $5.02bn outstanding in 12 series of dollar bonds due 2013-2036 with coupons between 7.000%-9.250%. It is also offering cash to holders of $2.72bn outstanding in 12 series of USD and EUR-denominated bonds due 2013-2027 and with coupons of 6.875%-9.250%.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 hadn’t issued in the international market since December 2011, when it sold UYP19.91bn ($1bn) in inflation-linked 2028 bonds, also part of an exchange. The sovereign h
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Winery Set for CLP Issue
Vina Concha y Toro is scheduled to tap Chile’s local bond market today, raising up to UF1.5m ($71m) to refinance short-term debt. The Chilean winemaker is expected to pick among a 12-year UF series with a 7-year grace period and 3.60% coupon, and a 6-year UF-tranche with a three-year grace period and 3.50% coupon. Banchile-Citi is managing the deal, rated AA/AA minus on a national scale.
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CART Hits the Road
Toll road operator Concessionaria Auto Raposo Tavares (CART) has started investor meetings for a planned BRL750m ($371m) domestic bond, according to regulatory documents. A portion of the issuance is targeting the newly created infrastructure debenture market. The borrower plans an inflation-linked 12-year bond that can be divided in up to two tranches and pay up to 8.0%. The exact definition will be determined during bookbuilding, scheduled to conclude by December 12. The debentures amortize beginning 2015. Proceeds would fund investment projects and replace BRL400m in debt due at the end of the year. Banco do Brasil, Banco Votorantim, Bradesco and HSBC are managing the sale, rated A+ on a national scale.