Banco de Costa Rica plans to meet with four finalist DCM banks in August to hear bond transaction proposals, according to a person familiar with the bank’s plans. A decision on the mandates for a deal should be made in late August ahead of what would be an international bond market debut. The bank is aiming to issue up to $500m in 10-year bonds. The Costa Rican government-backed bank is in the second phase of the selection process, following the collection of RFPs from a wider array of banks back in May. Low US Treasury rates and international interest for Costa Rican paper is driving the bank to the dollar bond market. The borrower is seeking funds for working capital purposes and to support lending operations.
Category: Bonds
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Energisa Prices Domestic Bond
Brazil’s Energisa has raised BRL400m ($199m) in the domestic bond market, according to the CVM. A BRL129m 2017 portion pays the DI+1.3%, in line with a price ceiling, and amortizes in two equal parts during the final two years. A BRL271m 2019 inflation-linked tranche pays 6.15% and also amortizes in two equal parts during the final two years. Energisa is using the proceeds to fund its investment plans, which include new generation capacity. BTG Pactual managed the sale, rated Aa3 on national scale.
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Odebrect Reworks Covenants
Brazil’s Odebrecht has received the majority bondholder approval needed to adjust terms on its $500m outstanding in 7.0% 2020 bonds issued through the Odebrecht Finance unit, it says. Through an offer launched July 16 and closed Monday, the builder is paying accepting holders $2.50 per $1,000 principal. The proposed amendments include eliminating covenants governing debt limits, dividend payments and transactions with affiliates, as well as loosening restrictions on liens and cross-acceleration in the event of default. Deutsche Bank and Goldman Sachs managed the operation.
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Renner Tightens Debentures
Brazil’s Lojas Renner has completed the sale of BRL300m ($147m) in the domestic bond market, according to the CVM, at a lower cost than the targets the retailer set when it started marketing. A BRL220m 2018 tranche pays the DI+0.97%, landing inside of a 1.05% limit. A BRL80m 2019 inflation-linked tranche pays 5.70%, coming in under a 6.20% limit. Each tranche amortizes in three equal parts during the final three years. The retailer is raising funds to improve its capital structure. Itau and HSBC managed the sale, rated AA+ on a national scale.
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Acciona Units Continue Meetings
The Oaxaca II and IV wind projects plan to continue meeting investors through Thursday, with a bond transaction expected as soon next week, according to people familiar with the potential deal. The roadshow for what would be the region’s first wind project bonds began last week. The two units, indirectly owned by Spain’s Acciona, are seeking respective $164.5m and $167.5m 2031 bonds with an average life of 13 years. BBVA, BNP, Credit Agricole, Santander and Societe General are managing the deals, each rated BBB minus.
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Banco do Brasil Waits on Yen Bond
Banco do Brasil has opted to wait on a yen-denominated bond sale and revisit pricing efforts after the scheduled quarterly earnings report on August 14, according to sources familiar with the matter. Though the timing had been unclear, the sale had been heard aiming to price as early as last week, with 3 and 5-year tranches likely planned. The bank has selected Bank of America Merrill Lynch, Banco do Brasil, JPMorgan, Mizuho and SMBC Nikko for the so-called “euro-yen” deal, which would represent a departure from LatAm issuers’ preference for the Japanese Samurai sales of recent years. The Brazilian bank issued $24m-equivalent in yen-denominated bonds in 1995, according to Dealogic.
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BICE Issues in Local Market
Chile’s Banco BICE has issued UF1.4m ($64m) in subordinated bullet bonds in the local market. The 2034 note priced at 100.10 with a 4.00% coupon to yield 4.03%, or 136bp wide of the government benchmark. The bank plans to use proceeds for funding purposes. BICE self-managed the sale, rated A+/AA minus on a national scale.
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Brazil CDS Volume Leads EM: EMTA
Brazilian CDS instruments experienced the highest trading volumes of all EM CDS in 2Q 2012, with $35bn changing hands, according to a report from EMTA. In the corporate space, Pemex CDS came in second in EM, with $2bn volume, behind Russia’s Gazprom ($6bn). Overall, EM CDS trading saw $218bn in 2Q 2012, down 9% from the $240bn volume in 2Q 2011.
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Colombian Bank Makes DCM Debut
Despite selloffs in many of the world’s equity markets Monday, Colombia’s Banco GNB Sudameris was able to emerge and price a $250m debut international bond. Investors demanded $900m of the subordinated Tier 2 bond, demonstrating a continued appetite for Colombian paper and allowing the bank to improve its capital structure. The Ba1/BB 2022 priced at par with a 7.50% coupon to yield in line with 7.5%-area guidance, and close to the midpoint of initial 7.25%-8.00% investor price interest. The bonds traded up 1.0 points in the grey, according to a trader. Bankers on and away from the deal comped the new bond against fellow Colombian bank Davivenda’s (Ba1/BB+) 10-year Tier 2, trading to yield 5.60%-5.65% Monday, with GNB pricing at a significantly wider spread due to the difference in systematic importance between Davivienda, as the third-largest Colombian bank, and Sudameris, the tenth-largest. The largest tickets were heard allocated to institutional accounts, followed by private banking, with a small portion allocated to hedge funds. The bank is using proceeds to improve its capital ratios and general corporate purposes. Bank of America Merrill Lynch managed the 144A/RegS transaction, which followed a roadshow in Latin America, Europe and the US. Last month, GNB agreed to acquire HSBC’s operations in Colombia, Uruguay, Peru and Paraguay, for $400m. The bank raised $130m in equity at the beginning of this year and plans to raise $70m before the end of 2012. Peru’s Coazucar is scheduled to finish a roadshow Wednesday, and possibly issue a $300m 2022 bond. The Oaxaca II and IV wind farms are also touring, ahead of a combined $332m issue.
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Colombian Bank Plans Domestic Issue
Colombia’s Banco de Occidente plans to issue COP300bn ($168m) in the domestic bond market, according to a source familiar with the bank’s plans. The unit of Grupo Aval is expected to choose from a 3-year DTF-linked tranche, and 10-year and 15-year IPC-linked tranches. InterBolsa is leading the deal, which is expected on August 9.