Tanner Servicios Financieros has issued UF1.5m ($72m) in the Chilean local bond market. The financial services company priced the 2017 bond at 99.18 with a 4.7% coupon to yield 4.9%, or government bonds plus 256bp. The deal, by BBVA and rated A on a national scale, saw approximately 1.8x demand.
Category: Bonds
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Triunfo Upsizes Debentures
Brazilian infrastructure company Triunfo has sold BRL472m ($233m) in the domestic bond market, it says. The sale was upsized from an initially planned BRL350m due to demand. A BRL81m 2017 tranche pays DI+2.2%, and a BRL391m inflation-linked tranche pays 7.0%. Triunfo is raising funds to replace existing debt. BTG Pactual and Caixa managed the sale.
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Odebrecht Taps Long Bonds for LM
Brazil’s Odebrecht is set to replace shorter debt with cheaper 30-year money, having reopened its 2042 bonds for $450m. The Baa3/BBB minus sale takes the outstanding size to $850m and will fund a tender offer for 2020 and 2023 bonds. The builder reopened the 7.125% coupon bonds at 116.266 to yield 5.95%, at the tight end of 6.00% (+/- 5bp) guidance, that followed low-6.00% whispers. Investors put in for $2.2bn in demand and the bonds were trading up 0.05-0.25 points in the grey, according to an investor. Participation was similar to other Odebrecht deals, with private banking, US high grade, and global accounts comprising the 137 in orders. Bradesco, BNP Paribas, Banco do Brasil, and Citigroup managed with Mitsubishi-UFJ as co-manager. Proceeds will be used to purchase a portion of the 2020 and 2023 notes. “Nice trade that will not increase net debt because of the tender for 2020 and 2023 bonds,” says a banker away from the sale. He adds the 2042 tap came close to flat to the bid side. Bankers on the deal spotted the 2042s at 5.92% pre-announcement. Odebrecht has launched a cash tender targeting the $800m outstanding in 7.00% 2020 bonds and $500m outstanding in 6.00% 2023 bonds. Accepting holders will receive $1,712.50 per $1,000 principal of the 2020 and $1,190.00 per $1,000 principal of the 2023. It has set a $450m limit between the two. The tender offer is expected to expire after 20 days. The bonds were originally sold in June at a 7.25% yield, when Odebrecht raised $1bn in new 10 and 30-year bonds. Credit Suisse, Itau, JPMorgan and Santander led the initial transaction.
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Produquimica Closes Domestic Bond
Brazil’s Produquimica Industria e Comercio has raised BRL150m ($74m) in the domestic bond market, according to Anbima. The chemical and fertilizer maker’s 2017 debenture pays 125% of the DI and amortizes annually during the final three years. Banco do Brasil managed the sale, done under the rule 476 restricted format.
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QGOG Hits the Road
Queiroz Galvao Oleo e Gas (QGOG) is preparing fixed-income investor meetings ahead of a possible transaction. The Brazilian oil services provider plans to visit accounts in London Wednesday, followed by Switzerland and Boston on Thursday and New York on Friday before wrapping up on the West Coast the following Monday. HSBC, BAML and Citi are managing. A benchmark-sized inaugural corporate bond with a possible 7-year or 10-year tenor, may follow subject to market conditions. The debt is to be raised at the QGOG Constelation unit. The issuer is targeting a $500m size, according to S&P which assigns a BB+rating. Fitch assigns BB minus, largely driven by leverage seen at 6.2x total debt/Ebitda for 2012, but also supported by Petrobras contracts. QGOG has tapped the project bond market, raising a $700m 7-year drillship securitization priced to yield 5.45% last year, through Citi, HSBC and Santander.
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Samarco to Meet Buyside
Samarco Mineracao plans to meet bond investors in US and Europe this week. The BBB/BBB rated privately-held Brazilian miner plans to visit accounts beginning in Los Angeles and London on Wednesday and in Boston and New York Thursday. A 144A/RegS benchmark 10-year transaction may follow, subject to market conditions. Proceeds will be used to address a new capex program with the rest for general corporate purposes. Citi, HSBC and JPMorgan are managing. Samarco is 50% owned by BHP Billiton and 50% by Vale and is one of the world’s largest seaborne exporters of iron ore pellets. It is a familiar name to the loan markets, most recently having raised a $450m 11-year term loan in a club deal closed earlier this month.
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Bolivia Return Lands inside Expectations
Investor demand for yield and Bolivia’s strong macroeconomic credentials appear to have overcome political risk concerns, as the Andean sovereign got a yield inside 5% in its return to the debt capital markets after nearly a century. Buyers put in for more than $4.25bn in orders in one of this year’s most anticipated DCM transactions. “It looks tight, but the ratios are pretty solid for Bolivia. We’re OK in the short-term and want to be paid for near-term risk, but in the medium to long-term there are a lot more question marks,” says a participating London-based EM portfolio manager. In what was essentially a debut, the Ba3/BB minus/BB minus issuer priced at par with a 4.875% coupon to yield at the tight end of 4.875%-area guidance that followed 5.00%-area whispers. The bond was heard up 0.15 points in the gray. Investor sentiment was mixed with some citing improvement in Bolivia’s improved fiscal and external positions as positives while others felt they were not justly compensated to take on Bolivian risk. Earlier on, Dominican Republic and El Salvador had been discussed as starting possible starting points, suggesting a 5%-6% yield. Some found that Venezuela, with an interventionist government but little question regarding willingness to pay, was a better value offering more than 10% yield. “We don’t see value at these levels. Bolivia seems to be riding the wave of demand for EM sovereign bonds, and while underlying credit metrics look good and with strong performance in the hydrocarbon sector, it does have a track record of nationalization,” says a West Coast-based EM investor who passed. “Everyone was shocked at the low yield, but it is an EMBI-eligible sovereign bond at 4.875% among the EMBI-eligible names like Brazil, Mexico, Peru, Colombia all trading around 2.5% and lower rated EMBI sovereigns like El Salvador trading around 4.50%. So there is some relative value here as an EMBI index play in a market that continues to see nothing but inflows,” says a DCM b
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Caixa Hunting up to $1bn
Brazil’s Caixa Economica Federal, roadshowing this week, is targeting a $1bn 2022 bond, according to Moody’s. The agency assigns a Baa1 rating to the deal, which comes under a $5bn program. The government-owned lender will visit the US, Europe and Asia today through Thursday, ahead of what is to be a debut issuance. Bank of America Merrill Lynch, Deutsche Bank and HSBC are managing the potential Baa1/BBB sale.
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CFR Starts Domestic Roadshow
Chile’s CFR has started a roadshow for a new domestic bond, according to people familiar with the pharmaceutical company’s plans. It has registered to sell up to UF4m ($191m) and is expected to issue in 5 and 20-year tranches. The total size may be less than UF4m, especially if the company chooses to pursue a cross-border sale it has been heard contemplating. IMTrust and Santander are managing the transaction, rated A/A+ on a national scale. A sale would represent CFR’s first bond issuance. Proceeds could be used for M&A activity.
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Chilean Lender Set for Bond
Tanner Servicios Financieros will look to issue up to UF1.5m ($72m) in the Chilean local markets today, say people familiar with the transaction. The financial services company can choose between a 5-year, UF1.5m series with a coupon of 4.7% and a 5-year CLP33.8bn series with a coupon of 7.7%. Tanner is expected to issue in UF, with proceeds earmarked for debt refinancing and its leasing operations. BBVA leads the transaction, rated A on a national scale. Tanner had been heard looking to issue up to CLP70bn at the end of March via Scotia, but decided to hold off for a more attractive spread.