Investors holding 50.12%, or about $200m of Bancolombia’s 2017 bonds accepted an offer to exchange them for 2022s, the bank says. In an offer closed last week, Bancolombia offered new 5.125% 2022 subordinated bonds for the 6.875% 2017 subordinated bonds, at a rate of a rate of $1,135 per $1,000 principal amount. The bonds are the same as those sold for cash in a $1.2bn September offering. The Baa3/BBB minus lender sold the 2022 Tier 2 bonds in September at a 5.20% yield through the same banks. Bank of America Merrill Lynch, Citi and Morgan Stanley managed both the sale and tender.
Category: Bonds
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Bolivia to Meet Buyside
With investors still clamoring for both yield and new names, Bolivia will meet investors ahead of what could be its first international issuance in decades. The sovereign received a Fitch upgrade to BB minus this month, and picks up plans it announced earlier this year. Bolivia will meet in investors in the US, Europe and LatAm Monday through Friday of next week. Bank of America Merrill Lynch and Goldman Sachs are managing the process, having been initially picked for the job in March. Targeting a $500m 10-year benchmark, the government originally wanted a June-July sale, but put it off due to European volatility and domestic nationalization moves making headlines. For Bolivia, a transaction is not a question of needing financing, but one of re-establishing a presence in the international bond market, with its last international foray in the early part of the 20th century, making a new bond essentially a debut. Bolivia is rated Ba3/BB minus/BB minus.
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Brazilian Infrastructure Player’s Books Swell
Brazil’s OAS is expected to price today a 2019 NC4 bond, according to sources following the process, giving 8.5%-area yield guidance Thursday. The first-time B rated issuer gathered more than $4bn in orders by Thursday afternoon fro what should be a $300m-$500m transaction, and the bond was heard up about 0.75 points in the grey market. The price talk is in from earlier mid to high 8% levels. Fitch notes increased consolidated leverage, combined with operating margins lower than the industry average. Net debt/Ebitda ratio was of 13.6x at the end of June, against 6.5x at year-end 2011 and 8.1x at year-end 2010. “There is a lot of project debt here, but this is high-yield and the market is hungry for that. I think it will do well” says an EM portfolio manager considering the sale. OAS was scheduled to wrap up European and US fixed-income investor meetings Thursday, following today with its international DCM debut. Proceeds raised from the sale, done through the OAS Investments Austrian unit and 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.
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Colombia Wraps up Investor Meetings
Colombia has wrapped up with investor updates in Hong Kong and Singapore, though there are no imminent plans to issue, Maria Fernanda Suarez, Colombia’s public credit director, tells LatinFinance. Any deal would have to be cost effective, especially in the Japanese market, she notes, and prefunding might be attractive. After pricing a global TES transaction last month, Suarez says Colombia may elect to issue the $300m left under its financial plan via an opportunistic trade. The country’s financing needs for 2013 will be around $2bn. The COP1trn ($559m) 2023 bond transaction last month allowed the republic to print its second largest-ever global TES issue and attain its lowest coupon for a local currency denominated issuance.
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Road Operator Prices First Widely-Marketed Infrastructure Debenture
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.
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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.
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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
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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.
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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.
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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.