H2Olmos has issued PES330m ($128m) in Peru’s local bond market. The water concession unit of Brazil’s Odebrecht sold a PEN78m 2018 bond paying 5.40% and PEN253m inflation-linked 2032 bond with an interest rate of 4.25%. The 6-year tranche saw 2.75x demand and the 20-year 2.26x. Scotia managed the sale, rated AA+/AAA on a national scale. H2Olmos has a 25-year concession to construct, operate and maintain the Olmos irrigation project in Peru.
Category: Bonds
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Mexican Bus Operator Preps MXP Securitization
IAMSA will look to price a MXP3.5bn ($270m) securitization in the Mexican domestic bond market on Monday, say people familiar with the inter-city bus company’s plans. The 15-year deal is backed the bus operator’s 1,438 buses and future ticket sale revenue, and will raise funds to repay bank debt. Santander is managing the transaction, rated AAA/AA minus on a national scale.
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Southern Copper Back on the Road
Southern Copper will be on the road Monday and Tuesday as it seeks to raise funds in the international bond market. The Peru-based unit of Mexican miner and railroad operator Grupo Mexico plans to visit London and Los Angeles Monday and New York and Boston Tuesday. Bank of America Merrill Lynch, Credit Suisse, HSBC and Morgan Stanley are managing. It cancelled a roadshow in September following the announcement of a US court judgment against Grupo Mexico. At the time, the Baa2/BBB/BBB issuer was planning 10-year and 30-year bonds, according to ratings agencies. Southern Copper last issued in April 2010, pricing a $400m 10-year and $1.1bn 30-year tranche through Credit Suisse, Goldman Sachs and Morgan Stanley.
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Banobras Plots Local Issue
Banobras plans to issue up to MXP5bn ($385m) in bonds in the Mexican domestic market. The government development bank plans to issue 3-year bonds paying a spread to the TIIE benchmark. It is estimating a November 7 sale, according to a selling memo. Banamex and BBVA Bancomer are managing the sale, rated AAA on a national scale. Banobras last issued in the local market in July via Banamex, when it sold MXP2bn in 2022 bonds at 6.12%, or Mbonos+50bp, after generating 1.31x in demand.
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Brazilian Schedules Investor Meetings
Usina Sao Joao (USJ) Acucar e Alcool plans to meet bond investors in Europe, Latin America and the US, ahead of what would be a debut bond issuance. The Brazilian sugar and ethanol producer is likely targeting a 2022 bond of up to $300m, according to Fitch, which assigns a BB minus rating to the potential transaction. USJ is scheduled to see accounts beginning in London and Santiago on Friday, followed by visits to New York Monday, Boston Tuesday, and Los Angeles on Wednesday. Credit Suisse, HSBC and Itau are managing.
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Brazilian Telecom Closes Debenture
Companhia de Telecomunicacoes do Brasil Central, known as Algar Telecom, has completed a domestic BRL294m ($135m) bond sale, according to the CVM, upsizing from BRL220m. A BRL61m 2017 tranche pays the DI+1.4%, in from a DI+1.5% ceiling, and a BRL233m 2019 inflation-linked tranche pays 6.0%, inside of a 6.6% limit. Algar is raising funds to repay debt and for working capital. Banco Votorantim, Itau and Santander are managing the sale. Part of the Algar Group, Algar Telecom offers telephone, cellular, cable television and data service in six Brazilian states.
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Caixa Aims Bond
Brazil’s Caixa Economica Federal has emerged with yield guidance of low UST+200bp-area, according to sources following the process, for what is expected to be a new 2017 bond of as much as $1bn. The state-owned lender is scheduled to wrap up US, European and Asian investor meetings today, with pricing by the end of the week. What would be a debut for BBB/Baa1 Caixa is being compared to Banco do Brasil’s 2017 bonds, trading at G-spread of 204bp. Bank of America Merrill Lynch, Deutsche Bank and HSBC are managing the process.
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CFR Defines Domestic Bond Plans
Chile’s CFR is targeting November 8 for a domestic bond issue, according to people familiar with the plans. The pharmaceutical company started investor meetings this week, and is expected to issue UF2m ($96m), divided among three possible tranches. A 3.5% coupon 5-year UF bullet tranche, a 4.0% coupon 21-year tranche with a 10-year grace period, and a 6.5% coupon 5-year peso-denominated bullet tranche are the options. Proceeds could be used for M&A activity. IMTrust and Santander are managing the transaction, rated A+/A on a national scale. A sale would represent CFR’s first bond issuance.
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Gas Natural Issues Colombian Bonds
Gas Natural has issued COP300bn ($165m) in Colombia’s domestic bond market, it says. A COP100bn, 5-year tranche pays IPC+3.22% and a COP200bn, 7-year tranche pays IPC+3.34%. The subsidiary of the Spanish energy company saw more than 3x demand for the issue, which is rated AAA on a national scale. Proceeds will be used to refinance debt and for working capital. Bancolombia and BBVA managed.
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Mexico Keeps Road Securitizations Rolling
Mexico’s domestic debt market continues to see road securitization activity, with Concorcio de Mayab raising MXP4.5bn ($346m) in the country’s second-largest such transaction this year. The ICA-owned operator priced a MXP1.2bn ($92m) 2034 peso-denominated tranche with an 11.3-year average life at 9.67%, or Mbonos+420bp. A MXP3.3bn ($254m) 2034 UDI-denominated portion with an 11.7-year average life priced at 5.80%, or Udibonos+418bp. Investors and analysts had been expecting a spread to each tranche’s respective benchmark of at least 400bp prior to the transaction. “Mayab is an interesting and mature deal with stable assets and attractive pricing versus RCO, which is better rated but with compressed spreads,” says a Mexico City-based debt investor, referring to Red de Carreteras de Occidente’s (RCO) MXP8.12bn sale last month that was seen as reopening the market. Mayab’s bonds are backed by the Kantunil, Merida-Cancun highway revenues. The borrower is looking to finance a 54km road project in the Playa del Carmen region, and to repay existing debt acquired by Mayab before it was purchased by ICA in 2008. BBVA Bancomer, HSBC and Morgan Stanley managed the transaction, rated AA/A2 on a national scale, with Morgan Stanley and Cofinza as structuring agents. With RCOs deal the pair have equaled the number of transactions from last year, and increased the volume from MXP5.2bn. Other types of ABS are on the way in what is a busier market this year, with IAMSA targeting MXP3.5bn in a bus revenue securitization, and the state of Veracruz preparing a MXP6.9bn deal backed by future federal payment flows. The total volume for ABS year to date in Mexico is MXP51.3bn — including RMBS sales and a MXP13.5bn CFE transaction — according to LatinFinance data. This is already an increase from 2011’s full-year total of MXP35.2bn.