Brazil’s AutoBan has priced a BRL1.1bn ($539m) domestic bond that includes a tranche qualifying as aninfrastructure debenture, becoming the first widely-marketed deal to take advantage of the legislation allowing tax exemptions to investors, according to sources following the sale. The toll road operator owned by Companhia de Concessoes Rodoviarias (CCR) has tightened pricing from initial expectations and upsized the 2017 debenture from BRL950m. A BRL965m tranche pays 109% of the DI, inside of a 109.2% ceiling, and does not qualify as an infrastructure debenture. A BRL135m inflation-linked tranche qualifying under the infrastructure law pays 2.7%, set to the yield of the government NTN-B bond plus 0.0%, in from an NTN-B plus 0.25% limit. “The demand for infrastructure debentures is very high. There is high demand for domestic credit of any kind right now,” says a Sao Paulo investor looking at the trade. Proceeds will go towards debt repayment and projects. Infrastructure bonds are local bonds offering tax advantages to international and Brazilian individual investors due to the use of proceeds. As with most of the early sales using the format, AutoBan’s sale was directed entirely to Brazilian buyers, with DCM bankers expecting international participation only after the asset has developed somewhat. Banco do Brasil, Caixa and HSBC are managing the sale, rated AAA on a national scale. Last week, ACS’s Montes Claros transmission project raised BRL25m in infrastructure bonds through a rule 476 restricted-format sale, becoming the first issuer in the asset class.
Category: Bonds
Rodopa Clinches RegS
Brazil’s Rodopa Industria e Comercio de Alimentos has sold $100m in 2017 bonds, according to a source familiar with the sale. The B minus RegS deal priced at par with a 12.5% coupon, and was sold to private banking investors. Proceeds are destined to improve Rodopa’s capital structure, refinance more expensive short-term maturities, and fund part of its expansion capital expenditures, according to S&P. The debt strengthens the beef and consumer products company’s debt profile following the acquisition of 100% of the shares by Selo Consultoria, an entity owned by Rodopa CEO Sergio Longo. Standard Bank managed the sale. Rodopa met investors in April through Standard and HSBC seeking a $125m 5-year bond, but decided against a transaction. S&P sees no substantial change from the buyout, noting that Longo has been CEO for three years. Rodopa plans to double its slaughtering capacity within five years.
SBM Marks FPSO Bond Market Debut
SBM Offshore’s SBM Baleia Azul unit has raised $500m in the RegD private placement market, giving LatAm its first bond financing for a floating production, storage and offloading vessel (FPSO). The Baa2/BBB 2027 project bond for the Cidade de Anchieta vessel priced at par to yield 5.5%, SBM says. The transaction has an 8.5-year average life and was placed with 16 institutional investors following marketing that began last month. Finding comps for the bond is not straightforward, but DCM bankers away from the deal suggest the Brazilian drillship bonds backed by similar Petrobras contracts. Schahin’s 2023 (Baa3/BBB minus, 6.75-year average life) was seen trading at around 5.0% Thursday, Odebrecht’s 2021 (Baa3/BBB, 6.25-year average life) at 3.6%. “There is interesting relative value in that SBM has a similar rating, but it could be seen pricing at a premium to the drillships when typically FPSOs are perceived to have less operational risk than drillships,” says a DCM banker away from the deal, noting that, after adjusting for curve and maturity, the bond could have come more than 100bp wide to Odebrecht and nearly flat to Schahin. The pricing level suggests sufficient depth in a market considered to often result in wider pricing than the more broad 144a market. However, SBM is heard selecting the RegD method in order to be able to focus its education process on a select group of investors, with the key task explaining the difference between the FPSO structure and the Brazilian drillship bonds. The issuer may now return to this pool of familiar investors in the future or approach the 144a market with a track record. Bankers away from the deal note that conditions at the moment are supportive of such a trade, making the choice of markets less of a risk. The bonds are backed by future revenues from an 18-year Petrobras contract. Noteholders are assigned a collateral package that includes a pledge of the shares of the issuer and owner of the vessel, as well as a mortgage
Sicrea Reopens MXP Bonds
Mexico’s Sistema de Credito Automotriz (Sicrea) has sold MXP300m ($23m) in the local bond markets. The reopening of its 2017 receivable-backed domestic bonds priced at TIIE+157bp, inside of the TIIE+160bp level of the original sale. The transaction saw about MXP700m in demand, with some 70% of the participants repeat investors, according to a source familiar with the transaction. ING managed the transaction, rated AAA on a national scale. Sicrea, an association of Nissan dealers which provides auto loans, sold MXP1bn of the bonds in the original deal.
Nissan Dealers Set to Reopen ABS
Mexico’s Sistema de Credito Automotriz (Sicrea) is expected to reopen its 2017 trade receivable-backed domestic bonds for MXP300m ($23m) today. In the original deal in May, Sicrea priced MXP1bn of the bonds at TIIE+160bp. ING is managing the transaction, rated AAA on a national scale. Sicrea is an association of Nissan dealers which provides auto loans.
OAS Sets Yield Target
Brazil’s OAS is aiming for a yield in the mid to high 8%s for a new 2019 NC4 bond expected to price Friday, according to sources familiar with the process. The infrastructure group is looking to raise $300m-$500m, according to Fitch, which assigns a B rating. OAS is scheduled to wrap up European and US fixed-income investor meetings today, and follow with what would be its international DCM debut. Proceeds raised from the sale, guaranteed by OAS, Construtora OAS and OAS Investimentos, will be used to refinance indebtedness. Banco do Brasil, Bradesco, BTG Pactual, Deutsche Bank, HSBC and Itau are managing.
Paraguayan Bank Prices Bond Retry
Banco Continental Paraguay has priced a $200m bond, mirroring the terms it got in an initial attempt to complete an international sale in June. The bank’s debut, and the second-ever issuance from a Paraguayan borrower, drew more than $550m in orders. The Ba3/BB minus 2017 priced at par with an 8.875% coupon to give a yield in line with 8.875%-area guidance that followed low 9.000% whispers. Investors comfortable with the zip code drawn in by the attractive yield and scarcity value. The bank priced a similar sale in June, which the leads elected not to settle due to the impeachment of President Fernando Lugo rattling the markets. With the change in leadership bringing less political instability than initially feared, a return was always in the lender’s plans. This time, the issuer was able to cut short its roadshow, which had been scheduled to run through today. Bank of America Merrill Lynch managed the sale, the second ever from a Paraguayan, according to Dealogic data. BBVA Paraguay raised a $100m 2016 in February 2011. The sovereign is also considering its first foray into the international markets, having met investors on a 2-day roadshow last month.
Restaurant Operator Issues MXP Bonds
Mexico’s Premium Restaurant Brands has priced MXP500m ($39m) in domestic 2015 bonds, according to a source familiar with the sale, in a transaction that was 1.16x oversubscribed. The fast food operator’s floating-rate bonds, which come with a 60% partial guarantee from Scotia, pay the TIIE+350bp, wide to TIIE+250bp-300bp expectations. Retail clients made up most of the demand, with some participation from institutional investors. Proceeds will be used to cover a $35m loan the issuer has with Bancolombia. Scotia managed the transaction, rated A+ on a national scale. Premium Restaurant Brands operates KFC and Pizza Hut franchises in Mexico.
Corpbanca Considers Subordinated Bond
Chile’s Corpbanca is planning a subordinated bond sale in the international markets, it says, as part of the funding for its $1.28bn acquisition of Helm Bank. The Corp Group Interhold entity raised $130m in the cross-border markets in 2010, through a 2015 bond led by Corpbanca and Larrain Vial. Corpbanca’s New York branch has raised $62m in 2014 bonds through two transactions this year, led by BNP Paraibas. Corpbanca is rated Baa1/BBB+.
Norwegian Sets up Shop in Rio
Norwegian bank DNB has opened an office in Rio de Janeiro, it says, to be led by Arne Christian Haukeland. The bank has had a presence there since 1968, but decided to establish an office to better meet customer needs, which include offshore and energy advising. DNB has already participated in several deals in the region, notably as joint lead on a $500m 3-year bond for OSX sold in the Norwegian market in March. It also was a lender to a 3-year $180m credit facility for Transelec in August.