Aruba has emerged with 4.875%-area yield guidance for a $253m 2023 bond, and is expected to price as soon as today, according to sources following the transaction. The level follows 5.0% whispers. The bond, with a 10-year average life, will raise funds to repay debt and for general budgetary purposes. Credit Suisse and UBS are managing the sale, rated A minus/BBB. Aruba last visited the bond market in February 2008, pricing a $57.3m 5-year issue.
Category: Bonds
Posted inDaily Brief
Bancoldex Ready for Domestic Issue
Colombia’s Bancoldex is expected to issue COP350bn ($192m) in the domestic bond market today, with the ability to upsize to COP700bn. The development bank can choose from 18-month, 2-year and 3-year tranches, and will self-manage the sale, rated AAA, with a group of other brokerages.
Posted inDaily Brief
Bancolombia Adds Greenshoe
Bancolombia has added a $50m Asian-market greenshoe to its bond sale priced Tuesday, it says, bringing the total size to $1.2bn. The Baa3/BBB minus lender had priced the 2022 Tier 2 bond at 99.421 with a 5.125% coupon to yield 5.20%. The sale, through Bank of America Merrill Lynch, Citi and Morgan Stanley saw $7.7bn in total demand, including $500m for the greenshoe.
Posted inDaily Brief
Bradesco Arm Preps Debentures
Bradesco Leasing is planning to raise BRL1bn ($490m) in Brazil’s domestic debenture market, it says. The leasing arm of the Brazilian bank plans a subordinated issue, but has not determined the maturity. Bradesco will manage the sale.
Posted inDaily Brief
Brazil Locks in Low Coupon
Brazil has sold $1.25bn in 2023 bonds, and continuing to push its debt coupon levels to new lows. Putting in for some $4.5bn in orders, investors appeared to see limited to fair value. The new bond priced at 99.456 with a 2.625% coupon to yield 2.686%, or UST+ 110bp, tight to 115bp-area guidance. The bonds traded up 0.25-0.30 points in the grey late Wednesday, according to investors. Bankers away from the deal estimate Brazil offered roughly 10bp concession, while lead managers saw 5bp-10bp. The deal appeared to check the right boxes for the Brazilian borrower with respect to low interest rates and investor appetite for quality EM credits. “Brazil is a name everyone is comfortable with and though the deal was not particularly cheap, we are living in a new environment where investment grade EM sovereign paper is viewed as a credit positive compared with European periphery names,” says a London-based EM investor eyeing the trade. “Yields and spreads are at an all time low and Brazil has not issued a 10-year since 2010, so the deal makes sense,” says a DCM banker away from the transaction. BTG Pactual and Deutsche Bank managed the sale, rated Baa2/BBB/BBB. The coupon was Brazil’s lowest ever, according to Dealogic data. It was the issuer’s first sale since BRL3.0bn 8.5% 2024 global real-denominated offering in April, through HSBC and Goldman Sachs, that was part of a tender offer.
Posted inDaily Brief
Digicel Goes Large in Refi Effort
Digicel has raised $1.5bn in new 2020 NC4 bonds, raising funds for a liability management operation targeting two series of outstanding 2015 bonds. In a continuing demonstration of demand for high-yield credit in the region, the final size represents an increase from the $700m that the Jamaica-based telecom had announced early Wednesday morning, and covers the outstanding size of the two series to be replaced. The bond priced at par with an 8.25% coupon to yield at the tight end of 8.25%-8.50% guidance. The bond traded up one point Wednesday afternoon, according to investors. Despite a Caa1/B minus rating on the transaction, investors cited overall demand for yield and the issuer’s name recognition and continued deleveraging story as pushing demand. “There has been almost no new high yield issuance recently, and Digicel is a known name and doing pretty well,” says an EM investor following the trade, noting that Digicel’s 2018 bonds were trading around 8.0%, or 7.5% on a yield-to-worst basis. Demand was heard to have reached at least $3bn, and buyers included a mix of EM-dedicated and high yield-dedicated investors. Fitch cites a strong operating performance, diversified revenue, free cash flow generation and expectation for stable credit metrics, which are balanced against high leverage, medium-term refinancing risk, and exposure to low rated countries. Short-term liquidity is “manageable,” it says, thanks in part to Wednesday’s refinancing. Calling the refinancing effort “favorable,” Moody’s notes that adjusted leverage should remain between 4.5x-5.0x in the next two years, and the likely future use of debt to fund consolidation of its Central American holdings weighs down its rating. Citi, Barclays, Credit Suisse, Deutsche Bank, Davy and JPMorgan managed the sale, done through the Digicel Group Limited entity. The proceeds will fund a tender offer launched Wednesday that targets any and all of Digicel’s $415m 9.125%-9.875% 2015 toggle notes and up to $245m of its
Posted inDaily Brief
Mexico Lands Udibono Syndication
Mexico’s government has sold MXP14.37bn ($1.09bn) in Udibonos through a syndicated bond sale, according to the central bank. The 2.0% coupon 2022s priced at 104.11 to yield 1.55%. The bonds are expected to reopen at periodic auctions beginning in 4Q. Bank of America Merrill Lynch, BBVA Bancomer, Banamex, HSBC and Santander managed the sale. In its previous syndication, Mexico sold MXP30bn in 2017 Mbonos in July.
Posted inDaily Brief
MG Closes Tax Receivables Securitization
Minas Gerais Participacoes (MGI), a holding company controlled by the state government of Minas Gerais, has closed the sale of BRL316m ($155m) in domestic bonds, according to the CVM. The tax-receivable securitization came in under a BRL400m target, though clinched an interest rate inside of a pre-set limit. The 2017 bond pays the DI+3.25%, inside of a 3.5% limit that had been set in May. The bonds are backed by a pool of back taxes owed to the state, which have been renegotiated with debtors in order to generate a stream of payments. Citi, Santander and ABC Brasil managed the sale, rated Aa2 on a national scale. MGI is 99% owned by the state, with minority holders including Cemig and the state’s development bank.
Posted inDaily Brief
Paccar Prices MXP Bond
Paccar Financial Mexico has issued a MXP1bn ($76m) bond, representing its first domestic Mexican issue since 2008. The 2015 floater priced at TIIE+40bp, in line with price talk of 35bp-40bp. Mutual funds, insurance companies and retail investors drove demand, which reached 1.5x, according to a person with knowledge of the sale. BBVA Bancomer and Banamex managed the deal, rated AAA on a national scale.
Posted inDaily Brief
YPF Opens Local Sale
Argentina’s YPF has opened the offering period for up to ARP1.2bn ($258m) in 3-year local bonds, it says, as part of a ARP1.35bn sale that also includes short-term debt of up to 18 months. Pricing is set for September 12, the state-owned oil company says. The sale comes under a $1bn shelf, and is led by BACS, BBVA Banco Frances, Banco de Galica y Buenos Aires, Banco Macro, Santander Rio and Nacion Fideicomisos. Faced with large capex needs, YPF has indicated that it plans to sell up to ARP3.5bn in domestic bonds. YPF also plans to ask for approval to expand its debt program by $2bn, it says, and will put the matter to a shareholder vote September 13. The authorization would come in addition to the $1bn for which it is already authorized. The issuer is also preparing to engage international investors, with an eye on a possible issuance next year.