Digicel has received acceptance from holders representing more than $1.2bn of $1.5bn outstanding in two series of 2015 bonds targeted in a buyback offer, it says, as of an early acceptance date. Its Digicel Group Limited unit has received acceptance from holders of $340m, or 82%, of its 9.125%-9.875% 2015 toggle notes and $910m, or 91%, of its 8.875% 2015 senior notes. Digicel is offering $996.25 per $1,000 principal of the 2015 toggle notes and $995.00 per $1,000 principal of the 2015 senior notes. In each case, holders who accepted before September 18 receive an additional $30 per $1,000. Citi is managing the tender offer, which expires October 2. The buyback is funded by Digicel’s recent $1.5bn sale of new 2022 NC4 bonds.
Category: Bonds
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Maestro Seeks to Move up Pricing
Peru’s Maestro is targeting a $180m 7-year NC4 bond, according to people familiar with the process, and may price as soon as Friday. Though on a roadshow scheduled to end next week, the home improvement retailer is heard having opened the order books – already oversubscribed as of Wednesday – and to be considering bringing the deal this 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.
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Mills Tightens Domestic Bond
Mills Estruturas e Servicos de Engenharia is set to raise BRL270m ($134m) in Brazil’s domestic bond market, it says, reaching the top of a BRL200m-BRL270m range and tightening pricing from initial expectations. The engineering firm’s sale features a BRL161m 2017 tranche paying the DI+0.88%, coming in under a DI+1.0% ceiling, and a BRL109m 2020 inflation-linked tranche paying 5.50%, coming in under a 5.90% ceiling. Mills plans to use proceeds to finance investments, repay debt and for working capital. An official at the company declines to offer additional details on the transaction, done under the rule 476 restricted format, as it is not fully settled.
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BTG Targets Tier 2
BTG Pactual is targeting a Tier 2 bond, according to Fitch, which assigns a BB rating to the transaction. A maturity of 10 years is expected for the bank roadshowing through Thursday. BTG Pactual, Citi and Deutsche Bank. The potential deal comes at the same time the bank considers a global Colombian peso-denominated transaction. Bradesco, BTG, Celfin Capital and Deutsche are handling that process, which could result in the first COP-denominated deal for a Brazilian issuer.
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CAF Returns for Tight Retap
Corporacion Andina de Fomento (CAF) has emerged with a $407m retap of its 2022 bond, seeing total demand of $1.23bn and clinching a tight price. The Aa3/A+/A+ regional development bank reopened the 4.375% coupon bonds at 107.907 to yield 3.412%, or UST+160bp, at the tight end of 165bp-area (+/-5bp) guidance that followed earlier 170bp price thoughts. Investors looking at the deal report that frequent issuer gave up very little in the trade. “We like the strong credit, but we did not like the [lack of] premium to the existing 2022s. They have to give us a little something,” says a portfolio manager following the sale who saw the 2022 bond trading at T+170bp. An official at the issuer notes a concession “flat to slightly inside” secondary levels. Repeating a common theme in DCM deals this year, investors say the issuer is able to achieve such a stingy pricing level due to the amount of excess cash they have to be put to work. Proceeds from the issuance are mainly to be used for budgetary purposes. Deutsche Bank, Goldman Sachs and HSBC managed the transaction. The sale brings the total outstanding size to $1.5bn. The notes were originally sold in June at a UST+282.5bp yield, part of a $600m cash sale that came along side an offer to holders to exchange CAF’s 2019 bonds for the 2022s. CAF also took advantage of a rating upgrade last month to raise CHF300m ($313m) in the Swiss market. CAF officials said at the time of the Swiss trade that the lender continues to analyze the USD, EUR, GBP and JPY markets, and does not rule out another CHF transaction before the end of the year. Elsewhere in the DCM, Colombia’s Coltel is scheduled to end a roadshow today, and BTG Pactual is meeting accounts through tomorrow, ahead of what is expected to be a 10-year Tier 2 sale.
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ENA Driving for $600m Size
Panamanian toll-road operator Empresa Nacional de Autopista (ENA) is targeting a $600m size for a planned 2028 bond issued through the ENA Norte Trust, according to Moody’s, who assigns a Baa3 rating. The government entity is scheduled to meet bond investors through tomorrow. The Republic of Panama is supporting the transaction by putting approximately $100m of equity into the unit, operating the Corredor Norte road in Panama City. The bonds are secured by toll revenue from the currently operational portion of Corredor Norte. The notes have no mandatory amortization and a 100% cash sweep, and Moody’s notes it projects full amortization of the notes prior to maturity. Additional bondholder protections include a debt reserve fund that is equal to 6 months of interest payments cash funded at closing, a 12-months forward looking major maintenance reserve, and a capex reserve. ENA was formed to acquire and manage companies that have road concessions from the government. In August last year ENA raised $395m through a 2025 bond yielding 5.75% and a 2019 priced to yield 5.25%. The deal was rated BBB/BBB minus. HSBC and Global Bank, managers of the previous sale, are coordinating meetings.
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FPSO Bond Talking with Buyers
SBM Offshore’s SBM Baleia Azul unit is heard to be in discussions with buyers regarding its planned $500m bond financing for a floating production, storage and offloading vessel (FPSO). Mistubishi UFJ, Mizuho, Rabobank and TD are managing the sale, to be done as a private placement under the RegD format. The timing is unclear. The BBB rated 2027 bonds are backed by future revenues from a contract between Petrobras and SBM’s Cidade de Anchieta vessel, which initiated production Monday. The structure appears similar to transactions used to finance drillships with Petrobras contracts, but this would be the first time in LatAm it is used for an FPSO, an asset so far accustomed to the loan markets.
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LLX Bond Details Emerge
Brazil’s LLX has finalized details on the BRL750m ($371m) 2027 bond done at its LLX Acu unit. The superport complex in Rio de Janeiro is to pay 6.09% interest on the inflation linked notes, according to Anbima. The debenture amortizes in annual installments beginning in 2015. Caixa is managing the sale, done under the rule 476 restricted format, and purchasing it. The proceeds will help fund construction. Controller Eike Batista last week shelved plans to buy up LLX’s outstanding shares and delist them.
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Alupar Unit Seeks Public Status
Usina Ferreira Gomes has applied for public company status with Brazils CVM, the designation for issuers of public equity or publicly-distributed domestic bonds. The hydroelectric project has already been funded with domestic debt raised by Alupar Investimentos. In March, Alupar sold BRL300m ($167m) in 2027 bonds through a private sale to the government FTGS fund. The inflation-linked notes pay 7.8%.
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Aval Looks at Bond Market
Colombia’s Grupo Aval preparing to issue $1bn in the international bond market, according to Moody’s and Fitch, who assign respective Baa3 and BBB minus ratings to the proposed issuance. The bond is expected with a tenor of up to 10 years, and is heard coming as soon as this week. The holdco for financial institutions including Banco de Bogota is raising funds to bolster investments and for general corporate purposes. Aval debuted the international bond market in January, pricing a $600m 5.25% 2017 at a 5.375% yield, through JPMorgan and Goldman Sachs.