Category: Bonds

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.

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.

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.

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.

Brazil’s America Latina Logistica Malha Norte (ALL) has sold BRL160m ($79m) in domestic bonds, it says. The 2020 bullet pays 10.10%. Caixa managed the sale, done under the rule 476 restricted format.

Brazil’s AutoBan has completed a BRL1.1bn ($539m) domestic bond sale that includes a tranche qualifying as an infrastructure debenture, according to the CVM, becoming the first widely-marketed deal to take advantage of the legislation allowing tax exemptions to investors. The toll road operator owned by Companhia de Concessoes Rodoviarias (CCR) had tightened pricing from initial expectations and upsized the 2017 debenture from BRL950m during bookbuliding last week. A BRL965m tranche pays 109% of the DI, inside of a 109.2% ceiling, and amortizes 4x annually beginning 2015. A BRL135m bullet inflation-linked tranche qualifying under the infrastructure law pays 2.71%, set to the yield of the government NTN-B bond plus 0.0%, in from an NTN-B plus 0.25% limit. Proceeds will go towards debt repayment and projects. As with most of the early sales using the infrastructure debenture format, AutoBan’s sale was directed entirely to Brazilian buyers, with DCM bankers expecting international participation only after the asset class has developed somewhat. Banco do Brasil, Caixa and HSBC managed the sale, rated AAA on a national scale.

Brazil’s Caixa Economica Federal is scheduled to meet bond investors this week, ahead of what would be an international bond debut. The state-owned lender will visit the US, Europe and Asia Tuesday through Thursday. Bank of America Merrill Lynch, Deutsche Bank and HSBC are managing the process. Caixa is rated BBB.