Mexican petrochemical producer Alpek has raised $650m in the debt capital markets, getting $4.6bn in demand from its first-ever international issuance and upsizing by $50m from initial expectations. Whether the UST+295bp level came inside of peer Mexichem (Ba1+/BBB minus) depends on who is asked, with investors and bankers spotting Mexichem’s 2022 at 290bp-300bp levels. The BBB minus/Baa3 Grupo Alfa-controlled polyester and plastics specialist priced at 99.713 with a 4.5% coupon to yield 4.536%, or UST+295bp, the tight end of UST+305bp (+/-10bp) guidance following earlier low-300bp whispers. The bonds were up 0.83 points in the grey Thursday afternoon, according to a trader. “The issuer is a big part of Alfa group, the deal comes with guarantees and though Alpek has lower margins than Mexichem, Alpek is less levered,” says a New York-based EM investor looking at the deal. Though the pricing was too tight for many, the buyside welcomed the opportunity for diversification away from Brazil in the LatAm petrochemical space. Approximately 275 accounts participated, with North American buyers comprising 60%, Europeans 30%, Latin Americans 5% and Asians 5%. Fund managers made up 60% of the book, private banking 20%, insurance and pension funds 15% and other investor types totaled 5%. The senior unsecured bond comes with guarantees from Grupo Petrotemex and its main subsidiaries. Proceeds will be used to address a syndicated loan. Citi, Goldman Sachs, HSBC and JPMorgan managed the transaction. Next up in the region’s DCM is Costa Rica, expected with a $1.bn benchmark today. Mexico’s Posadas is also expected soon with a new bond, as it conducts a liability management exercise.
Category: Bonds
Bancomext Readies Domestic Bonds
Mexico’s Banco Nacional de Comercio Exterior (Bancomext) is preparing to raise up to MXP2bn ($160m) in the domestic market, according to a selling memo. The Mexican state-owned bank is planning to price the 10-year fixed rate bonds on November 21. Banamex and HSBC are managing the deal, rated AAA on a national scale. The development bank last priced MXP1.5bn in 2022 bonds at 5.75%, or Mbonos+49bp in July.
Chilean Taps Local Debt
Chile’s Eurocapital has issued UF1m ($47m) in domestic bonds, pricing a 3.5-year bullet at 97.99, with a 4.80% coupon to yield 5.50%, or 285bp over government bonds. The financial services firm is raising funds for refinancing liabilities and general business purposes. The issuance is rated A minus/A minus on a national scale and led by Banco Bice. Eurocapital is the largest non-banking factoring company in Chile.
Costa Rica Aims DCM Return
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.
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.
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.
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.
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.
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.
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.