Ecogen Brasil has completed the sale of BRL95m ($48m) in domestic bonds, according to Anbima. The engineer specializing in energy efficiency printed 2019 debentures paying the DI+3.75%. Itau managed the sale, done under the rule 476 restricted format.
Category: Bonds
Posted inDaily Brief
AMX Raises Tight Euro Funds
In keeping with its promise to establish a full Euro curve since its 2010 debut, America Movil (AMX) made its third visit to the European debt market to raise EUR1bn ($1.25bn). In a tightly-priced sale, the Mexican telecom drew nearly 2.5x demand from investors in the continent where it has been focusing on acquisitions in the past month. Following extensive roadshow meetings on its previous two visits, the A2/A/A minus rated telecom skipped marketing efforts this time around – instead holding a global investor call – a sign of growing investor confidence in AMX. The 2021 priced at 99.977 with a 3.000% coupon to yield 3.003% or MS+113bp, the tight end of MS+115bp (+/- 2bp) guidance, in from MS+120bp price thoughts. The deal was heard offering around 4bp new issue premium against secondary levels seen on the AMX EUR 2022 and EUR 2019 bonds, which were quoted at MS+107bp and MS+110, respectively. “The deal priced incredibly tight to America Movil’s outstanding [Euro] bonds. It would not price at those levels if the book wasn’t there,” says a DCM banker away from the deal. Indeed, within the 6-hour execution, the final book grew to EUR2.4bn, with over 200 accounts heard participating. Fund managers drove demand with 60% participation, insurance companies 25%, pension funds 5%, banks 5% and others 5%. German buyers accounted for 29%, with France taking 27%, UK 15%, Switzerland 10%, Denmark 6%, Asia 5% and the rest allocated to other parts of Europe. AMX was heard pricing through France Telecom (FT) for the first time – an accomplishment after last year pricing 20bp wide to the French telecom. AMX targeted a European transaction as a result of its recent acquisitions in Europe and to establish a competitive curve in Euros, and not specifically for arbitrage opportunity. However, AMX was still able to price at a competitive level to its dollar curve, according to market participants. “This was a very good deal for America Movil,” notes a banker away from the deal who esti
Posted inDaily Brief
Chilean Dreams of Local Bond
Chilean casino and hotel operator Dream could tap the country’s domestic bond market in the second half of this year, according to market observers, with some suggesting it could issue as soon as later this month or in August. It would be the company’s first issuance and it is rated single A on a domestic scale – two factors that have worked against other issuers this year. Dream has registered for UF5m ($226m) in domestic bonds of up to 10 years, and UF5m for up to 30 years. The money could be used for investments or to refinance liabilities, according to the company’s filing. Banchile-Citi is listed as the manager. The company could also consider private placement as an alternative.
Posted inDaily Brief
Road Operator Gets Local Debt
Triangulo do Sol Auto-Estradas, a Brazilian road operator, has completed the sale of BRL620m ($312m) in domestic bonds, according to Anbima. The Sao Paulo state concessionaire’s 1.5-year notes pay the DI+2.25%. Santander managed the sale, done under the rule 476 restricted format.
Posted inDaily Brief
CAF Gets Ratings Lift
Moody’s has upgraded Corporacion Andina de Fomento (CAF) to Aa3 from A1, it says. The agency highlights CAF’s broadening membership and improved member credit quality, stronger capital adequacy ratios, enhanced risk management capabilities and increased loan portfolio diversification.The outlook is stable.
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Cemex Outlines Debt Proposal
Cemex has unveiled the terms of an offer to creditors to extend the maturity of $7bn in debt to 2017 from 2014, it says. The Mexican cement maker is offering lenders an exchange of their current exposure into one or more of new 9.5% 2018 bonds, new loans paying Libor+525bp, new USD private placement notes paying 9.66%, or new yen-denominated private placement notes paying 7.735%. The interest rates on the loans and private placement notes reduce over time based on prepayment targets. The proposed 2018 bonds are capped at $500m, callable in 2016 and guaranteed by more than 7 Cemex units. Participating creditors receive an exchange fee of 80bp, and a 50bp additional cash fee if the Cemex ADS exceeds US$14.50 during the 90 days after April 1, 2015. As part of the new proposal, Cemex plans to make a $1bn paydown in 2013. If it misses the payment, the debt maturity reverts to 2014. It expects to fund the paydown with asset sales, including minority stakes in Cemex operations in select countries, selected US and European assets and other non-core assets. After the paydown, the remaining debt amortizes $500m in February 2014 and $250m each in June and December 2016. As for the covenants, Cemex must maintain a consolidated leverage ratio under 7.00x through December 2013, reducing to 4.25% by December 2016, and consolidated coverage ratio above 1.50x through June 2014, increasing to 2.25x by December 2016. “The new covenants are less strict and, in our view, should not cause any investor concern going forward,” Barclays says in a report. At least 60 lenders holding debt from the $14bn 2009 financing agreement have met with the Mexican cement maker in New York or are scheduled to meet with the company today in Madrid. The offer is open for 30 days, and must get acceptance from creditors representing at least 95% of existing exposures.
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DR Eyes Domestic Bond Issuance
The Dominican Republic is proposing to issue $500m in the local bond market, according to government filing. If approved by congress, the government would issue the USD-denominated bonds in multiple series, with a maturity of at least 5 years and a coupon of up to 7%. Proceeds will be transferred from the finance ministry to state-owned electricity companies. “The deficit remains high due to higher international oil prices so it is necessary to increase transfers to state utilities to meet their commitments with generators,” the finance ministry says. The government had been considering a 10-year international sale of $500m. “It is yet unclear to us how ample demand will be for $500m in relatively short-dated local bonds paying a coupon of 7%. The issuance of debt to finance subsidies to the electricity sector validates our concerns that the country’s fiscal standing has weakened in the first half of the year beyond the point where the government can reallocate budget resources to cover unexpected needs,” JPMorgan says in a research report. The republic’s last issue was a $250m retap of its 7.500% 2021 bonds, done in November at a 6.875% yield.
Posted inDaily Brief
Banobras Raises MXP Funds
Mexico’s Banobras has raised MXP2bn ($150m) in the domestic bond market. The government development bank priced a 2022 bond at 6.12%, or Mbonos+50bp, landing the lowest coupon ever for a fixed rate bond over 1 year, according to a banker familiar with the transaction. Demand was heard at 1.31x, with Afores and insurance driving the bulk of demand. Banamex managed the sale, rated AAA/Aaa on a national scale.
Posted inMagazine
BRAZILIAN BANKING: End of the golden age
The outlook for Brazilian banks and their shareholders has darkened. Crude government measures to stimulate credit look dangerous while the consumer story is starting to unravel
Posted inMagazine
DEBT: Lonely are the brave
Opportunistic investment grade Latin American corporate, sovereign and select high-yield borrowers were the theme in May, June and early July taking advantage of issuance windows amid continued volatility in the […]