Inbursa plans to issue up to MXP5bn ($387m) in the Mexican domestic bond market, according to sources familiar with the transaction. The 3-year bond is heard likely to price at TIIE+23bp-25bp. The AAA-rated issuer had been aiming for an issue this week but is likely to push it off until October 4 as it awaits authorizations. Inbursa, Banamex, Banorte-Ixe and Activner are managing. Inbursa last issued in May, selling a floating-rate note paying the TIIE+25bp.
Category: Bonds
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Petrobras Returns to Europe
Petrobras has raised more than $3.3bn-equivalent during its second visit to the European and Sterling bond markets. Diversifying funding sources away from USD as it addresses $235bn in capex needs, the Brazilian state-controlled oil producer was seen pricing at levels for the most part competitive to its EUR, GBP and dollar curves. A EUR1.3bn ($1.68bn) 2019 tranche priced at 99.398 with a 3.250% coupon to yield 3.357%, or mid-swaps plus 212.5bp, the tight end of 215bp (+/- 2.5bp) guidance. A EUR700m 2023 tranche priced at 98.154 with a 4.250% coupon to yield 4.466%, or mid-swaps plus 257.5bp, the tight end of 260bp (+/- 2.5bp) guidance. In the sterling market, Petrobras priced a GBP450m ($730m) 2029 bond at 97.472 with a 5.375% coupon to yield 5.610%, or Gilts+320bp, the tight end of 320bp-330bp guidance. Bankers on the deal calculated flat to five basis points concession for all three tranches to their repective curves. “Petrobras’ Euro 10-year looked roughly flat to their USD curve before swap charges – so a solid outcome in terms of relative pricing versus USD and diversification of funding,” notes a LatAm DCM banker away from the deal. While seen as tight to the EUR and GBP curves, there was less consensus on attractiveness versus the USD. “Petrobras got great pricing versus Euros and Sterling and would like to have priced flatter to the dollar curve given the basis swap relationship. But the outcome was still very successful,” says another banker. “The deal is fair and not cheap enough to encourage dollar-based investors to make a switch for a handful of basis points because of the lack of liquidity of EUR and GBP,” says a London-based portfolio manager following the deal. Demand was heard to be roughly EUR3.8bn for the 2019, EUR2.4bn for the 2013 and more than GBP900m for the Sterling portion. Bankers note the issuer is keen not to saturate the dollar market, and transaction took advantage of European investors hungry for Euro-denominated fixed-income transact
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Telecom Details Local Debt
Companhia de Telecomunicacoes do Brasil Central, known as Algar Telecom, is preparing to raise BRL220m ($108m) in the domestic bond market, it says. A 2017 tranche pays the DI plus up to 1.5%, and a 2029 inflation-linked tranche pays up to 6.6%. The exact portion of each is to be determined during bookbuilding, and the sale may be upsized by as much as BRL77m. 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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ALL Plots Debentures
Brazil’s America Latina Logistica Malha Norte (ALL) is preparing to sell BRL160m ($79m) in domestic bonds, it says. The 2020 bullet would pay 10.10%. Caixa is managing the sale, done under the rule 476 restricted format.
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Bancolombia Extends Early Tender
Bancolombia has extended the early deadline on a tender offer for its 2017 bonds until the October 5 full expiration date, it says. Earlier this month, the bank launched the exchange offer targeting the $400m outstanding in the 6.875% 2017 subordinated bonds, aiming to replace them with new 5.125% 2022 subordinated bonds, fungible with the notes it sold for cash in a recent $1.2bn offering. The lender is offering holders the new bonds at a rate of $1,135 per $1,000 principal amount, and says holders representing 47% have accepted the offer already. Bank of America Merrill Lynch, Citigroup and Morgan Stanley are managing the process. The Baa3/BBB minus lender sold the 2022 Tier 2 bonds earlier this month at a 5.20% yield through the same banks.
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BTG Sees Strong Bid for Tier 2
BTG Pactual is expected to price a 10-year Tier 2 bond today, with books heard reaching $5bn late Thursday. The Brazilian bank has indicated 6.125%-area yield guidance for the benchmark-size deal. The pricing expectations compare to 10-year Tier 2 bonds from Itau, Bradesco and Banco do Brasil, all trading from just inside 5% to low-to-mid 5%, according to a trader. BTG Pactual, Citi and Deutsche Bank are managing the sale, rated BB. The bank is also considering a separate global Colombian peso-denominated transaction, to be done through Bradesco, BTG, Celfin Capital and Deutsche, that could come once the Tier 2 is out of the way.
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CFE Lands Domestic Jumbo
Mexico’s Comision Federal de Electricidad (CFE) has priced a MXP13.5bn ($1.05bn) bond transaction, representing the domestic market’s largest deal since 2010. Raising funds for the La Yesca hydroelectric facility, the state-owned utility received some MXP20.6bn demand from a liquid local buyside. Though the post-election period has yet to bring a hoped-for uptick in overall issuance – bankers say year-to-date volume lagged 2011 before the trade – both bankers and buyers note available liquidity for government issuers. “The market was ready for this deal. There is tons of liquidity,” says a Mexico DCM banker away from the transaction. Though the appetite is there for the government-linked credits and America Movil, he says there has not yet been a significant increase in domestic issuance from corporates in general. This is expected to slowly improve now that the election cycle has passed and there is more general market attention on Mexico. The CFE’s 2042 bond with a 15-year average life pays a fixed rate of 7.70%, pricing at Mbonos+ 159bp, in line with 160bp expectations. The main participants were Afores, insurance companies and retail investors, according to a banker on the deal, who notes the sale is the largest-ever single tranche for a 30-year Mexican domestic bond. The sale completes the issuer’s funding needs for the year. Banamex, BBVA Bancomer and Santander managed the transaction, rated AAA on a national scale. The deal comes under a MXP50bn shelf and was authorized to raise as much as MXP17bn, with the issuer heard stopping at MXP13.5bn due to budgetary constraints. The deal is the largest in Mexico’s domestic market, excluding the federal government, since December of 2010, when CFE raised MXP14bn in 2014 and 2020 bonds, according to Dealogic data. America Movil has said it is working on a platform for more regular domestic bond issuance. Red de Carreteras de Occidente’s (RCO) MXP8.12bn toll road securitization also recently gave the market a sizeable t
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Coltel Continues Colombian DCM Supply
Colombia Telecomunicaciones (Coltel) has priced a $750m bond in the international markets. The first-time issuer was able to bring in the price more than 60bp from initial talk, a tightening heard surprising even those close to the trade, as it gathered $8bn in orders. The deal follows Grupo Aval’s $1bn bond and others from the region recently that have capitalized on strong appetite. The BB rated issuer priced the 2022 bond at par with a 5.375% coupon to yield at the tight end of 5.375%-5.500% guidance that had been revised from 5.500%-5.750%. Initial whispers coming towards the end of a three-continent roadshow were 6%-area. Coltel traded at 100.75-101.00 late Thursday, according to investors. Partial government ownership made pricing the new bond tricky, though reference points included the Colombian sovereign as well as the Telefonica parent’s 2021 bonds, trading early Thursday to yield around 5.70%. Payment obligations through 2028 to a pension consortium should increase adjusted leverage and pressure cash flow generation, Fitch says, noting that higher capital expenditures over the next few years should also limit free cash flow. Buyers weighed these concerns against support from 30% government ownership and an expectation for improvement following the June merger of Coltel’s fixed line business with Telefonica Moviles Colombia. “This is one of the cheaper Colombian options, there are few credits yielding above 5%,” says a DCM banker away from the trade. The deal likely saw participation of just over 50% from US investors, and some 30-35% from European investors, with the remainder from Asia and LatAm, according to bankers on the deal. Credit Suisse, HSBC and JPMorgan managed the BB sale. A Colombian peso-denominated tranche alongside the dollar bond had been considered during marketing. With more supply on the way, the buyside’s attention was caught by Aval’s new bond dipping just below reoffer Thursday morning before rising again. While a sudden lack of dema
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Interbank Retaps 2020
Peru’s Interbank reopened its 2020 bond for $250m, to bring the total size to $650m. In another sale taking advantage of strong recent demand for Andean credit, the Peruvian lender reopened the 5.750% coupon bond at 106.25, in line with 106.25-area guidance, to yield 4.800%. Bank of America Merrill Lynch and JPMorgan managed the sale, rated Baa3/BB+/BBB minus. The bond was originally sold in September of 2010, raising $400m.
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Peru Retailer Ready for Bond
Peru’s Maestro has given 7.125%-area yield guidance for a $180m 7-year NC4 bond, expected to price today. The home improvement retailer was heard with an order book at almost 10x late Thursday, leading to a decision to price today despite a roadshow scheduled to last through early next week. The Ba2/BB minus issuer is raising funds to address some $100m in debt and fund approximately $80m in capital expenditures, in addition to general corporate purposes. Bank of America Merrill Lynch and JPMorgan are managing the transaction, with Scotia as co-manager.