Caterpillar Credito, the financing arm of Mexico’s Caterpillar subsidiary, plans to issue up to MXP1bn ($77m) in floating rate bonds on December 5. The bonds, guaranteed by Caterpillar Financial Services, have a 2016 legal maturity and 2.5-year average life. The deal rated AAA on a national scale comes with initial price thoughts of TIIE+35-40bp. Proceeds will be used for general corporate purposes. HSBC is the sole lead.
Category: Bonds
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Cofide Retaps for $100m
Peru’s Cofide has returned to the DCM to raise $100m in a reopening of its 2022 bonds. The 4.750% coupon notes reopened at 111.25 to yield 3.138%, in line with 111.25-area guidance. Deutsche Bank and JPMorgan led the sale, which gives the Peruvian development bank a $500m outstanding size. Cofide originally priced the $400m 10-year in February at a 4.95% yield.
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Pemex Unleashes Record Local Sale
Pemex has raised MXP25bn ($1.92bn) in Mexico’s domestic bond market, in a three-tranche offering that is the issuer’s, and possibly the country’s, largest-ever domestic sale. The transaction, moved forward from the end of this week, likely caps off a large and diverse 2012 fundraising effort. A new MXP11.5bn 2017 floating-rate bond priced at TIIE+18bp, inside of analyst expectations of TIIE+25bp and drawing 1.5x demand, according to sources familiar with the sale. A MXP10bn reopening of the 7.65%-coupon 2021 fixed-rate bonds came at a 6.52% yield, or Mbonos+111bp, inside of analyst expectations of around MBonos+120bp, and getting 1.5x demand. The retap doubles the outstanding size of the bonds sold last year in the first-ever corporate global depository note (GDN) offering. The issuer elected not to offer the bonds to international buyers this time around. A MXP3.5bn 2028 UDI-denominated tranche pays 3.02%, or Udibondos+98bp, and received 2.7x demand. Several types of domestic investors were heard participating, led by Afores and insurance companies. Despite its size, the deal was not expected to crowd out other issuers, sources familiar with the trade explain, and in fact was moved up to Monday due to the issuance expected to follow, most notably a MXP10bn-plus sale from America Movil expected as soon as today. “There are other deals in the pipeline, but this trade shouldn’t affect them,” says one, pointing to the oversubscription seen Monday and noting that sufficient demand for the deal was never in question. Proceeds from the issue, rated AAA on a national scale, are to be used for investment purposes and to finance projects. Banamex, BBVA Bancomer, HSBC, Morgan Stanley and Santander managed the transaction, with Actinver and CI Casa de Bolsa as co-managers. Pemex last issued in the domestic market in 2011, raising MXP10bn in the original 2021 GDN offering, the first such Mexican corporate sale. Monday’s sale tops two previous MXP15bn offerings in 2010, and i
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Pine Opens US Subsidiary
Banco Pine has officially opened Pine Securities, its US subsidiary, the Brazilian bank says. Ex-Jefferies banker David Gould joined in July to head the expanded DCM operation from New York and reports to Norberto Zaiet, Pine’s COO. The Brazilian mid-size shop will see its New York broker dealer focus on Brazilian large company research and fixed income securities.
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Posadas Raises $225m for LM
Grupo Posadas has priced a $225m 5NC3 bond, upsizing from $210m and raising funds for a cash tender targeting its $200m outstanding 9.250% 2015 bonds. The B2/B/B+ Mexican hotel operator priced the senior unsecured 2017 at 99.493 with a 7.875% coupon to yield 8.000%. This came at the tight end of 8.000%-8.125% revised guidance, in from 8.250%-area price talk. The bonds were trading up 0.375-1.000 points in the grey, according to investors. Though a difficult bond to comp, some investors looked at the issuer’s illiquid 2015 bonds, while others looked at single B Mexican names with similar debt levels. “The book grew throughout the day and the issuer was able to tighten significantly. It was an exercise in price discovery and pricing at 8.0% testifies to that,” says a person familiar with the sale. In the end, Posadas was able to generate nearly $1bn in orders from a mix of fund managers and retail investors, according to a banker familiar with the transaction. Proceeds will be used to fund the cash tender. Holders of $116.6m, or 58.3%, had accepted the offer as of the November 23 early deadline. Posadas offered holders $1,060 per $1,000 principal before the early deadline, and is offering $1,045 per $1,000 through the November 30 final deadline. Bank of America Merrill Lynch, Citi, Deutsche Bank, JPMorgan and Santander are managing the process.
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Daimler Issues Domestic Debt
Daimler Mexico has issued MXP1bn ($77m) in 2015 floating-rate domestic bonds. The bonds pay the TIIE+35bp, pricing in line with TIIE+35bp expectations. Demand was nearly 2.9x, and driven by mutual funds, insurance, private banking and Afores, according to sources familiar with the sale. Funds raised will be used for general corporate purposes. BBVA Bancomer and HSBC managed the transaction, rated AAA on a national scale and guaranteed by the German parent. Daimler previously came to market in June, when it priced a MXP1bn 2014 bond at TIIE+30bp.
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Interacciones Preps Sub Debt
Mexico’s Banco Interacciones is looking to issue up to MXP700m ($54m) in subordinated bonds in the domestic market, in a deal scheduled for Wednesday. The 10-year notes will represent the third issuance under a subordinated notes program, are eligible for Tier 2 capital treatment for up to MXP2bn, and pay a spread over the TIIE benchmark. Proceeds will be used to maintain liquidity and general corporate purposes. Interacciones specializes in sub-national government and public infrastructure financing. Interacciones is leading the deal, rated Baa1/A on a national scale.
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Odebrecht Closes Tender
Odebrect plans to repurchase $379m of its 7.0% 2020 bonds and $71m of its 6.0% 2023 bonds, it says, following the close of a tender. Holders representing $428m of the 2023s accepted the offer, but the total buyback between the two series had been capped at $450m. The Brazilian builder is paying $1,172.50 per $1,000.00 principal of the 2020 bonds, and $1,190.00 per $1,000.00 principal of the 2023 prior to an early deadline, and $1,160.00 after. There was $800m outstanding in the 2020s and $500m outstanding in the 2023s prior to the offer. 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, Citi and Mitsubishi-UFJ managed the reopening and the tender.
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Argentina Vows to Defy Court Order
Argentina plans to challenge a US judge’s ruling in an appeals court, its economy ministry says, after the sovereign was ordered last week to pay $1.3bn to its holdout creditors and not to pay other bondholders until it satisfies this judgment. The government has reiterated its vows not to pay “vulture” funds, but last week’s order could complicate the process by which Argentina pays creditors who accepted its 2005 and 2010 bond swaps. Argentina has coupon payments due in December to these holders. Once Argentine funds reach the US, the court could force Argentina’s agent bank, Bank of New York Mellon, to also pay the holdouts, Nomura says in a report. This would effectively trigger a default since the coupons on the restructured bonds will not be paid in full, the shop says. Options to avoid such a default would include a settlement with the bond swap creditors, making payments in pesos in Argentina or having the case accepted by the US Supreme Court, Nomura says. Bulltick notes the judgment offers a lack of options for the Bank of New York Mellon and other third parties, and says bondholders would likely sue the bank if their payments don’t go through. “This decision goes way beyond Argentina, and creates a very negative precedent for future debt restructurings,” the shop notes. The court had ruled last month that Argentina can no longer discriminate among creditors by only making coupon payments to those who accepted the bond swaps.
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Bancomext Prices Local Bond
Mexico’s Banco Nacional de Comercio Exterior (Bancomext) has priced a MXP2bn ($154m) 10-year domestic bond, according to people following the deal. The sale came at a fixed rate of 5.94%, or Mbonos+50bp, in line with Mbonos+50bp guidance. It was 2x oversubscribed with Afores, insurance and mutual funds driving the majority of the demand. Proceeds will be used to fund the development bank’s portfolio. Banamex and HSBC managed the deal, rated AAA on a national scale. It previously raised MXP1.5bn in 2022 bonds at 5.75% in July.