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.
Category: Bonds
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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.
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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.
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Banco Estado de Chile Looks to DCM
Banco del Estado de Chile is preparing an international bond issue, following the close of an RFP process, according to sources following the plan. The bank is heard looking at a benchmark size 5-year bond in the dollar market, pricing as soon as this month. The Aa3/A+ borrower was last in the international market in February when it issued a $500m 10-year bond. Deutsche Bank and JPMorgan managed the sale.
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Chilean Sovereign Plots Bond
Chile is interested in a return to the international bond markets, according to DCM bankers. The sovereign, which last issued in September 2011, is aiming for a new benchmark, likely around $1bn, and has sent banks an RFP. A 30-year maturity is said to be considered along with a 10-year. Chile’s last international sale included a $350m-equivalent reopening of its 2020 CLP-denominated bonds at a 4.4% yield, and a new $1bn 2021 at a 3.381% yield. Deutsche Bank and HSBC managed the transaction. Since returning to the market in 2010 after a 6-year absence, Aa3/A+ rated Chile has made a benchmark issuance an annual event.
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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+.
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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.
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Negative Outlook for Vene on Wide Chavez Victory
A wider-than-expected margin of victory for President Hugo Chavez in Venezuela’s presidential elections should mean increased pressure on Venezuelan assets, analysts say. With today the first session of open US markets following the election – which Chavez was estimated to have won by 10% – at least some degree of selloff was expected. “We expect a knee-jerk reaction of downward pressure on Venezuelan bond prices, and if President Chavez decides to deepen his ‘XXI Century Socialism’, we would expect Venezuela’s creditworthiness to erode further in the medium term,” Nomura says, noting the market had been positioning for a close election. “The victory by Chavez should weigh on Venezuelan bonds when U.S. markets reopen on Tuesday,” Citi says, expecting a 100bp-150bp widening. Others expect a smaller reaction. “It is difficult to expect much of a selloff considering that the closing credit spreads unwound most of the Capriles optimism as investors took profits ahead of the event,” Jefferies says, noting spreads had already unwound back to relative levels from when the elections were mostly viewed as a non-event.
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OAS Seeks Up to $500m Bond
Brazilian infrastructure group OAS is looking to raise $300m-$500m through a 2019 cross-border bond, according to Fitch which assigns the transaction a B rating. OAS is scheduled to wrap up European and US fixed-income investor meetings on Thursday, and follow with what would be its international DCM debut. Proceeds raised from the bonds, unconditionally 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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Sicrea Nears ABS Retap
Sistema de Credito Automotriz (Sicrea) plans a MXP300m ($23m) reopening of its 2017 bonds backed by trade receivables Thursday. In the original deal, Sicrea priced MXP1bn of the 2017 bonds at TIIE+160bp. ING is managing the transaction, rated AAA on a domestic scale. Sicrea is an association of Nissan dealers which provides auto loans.