Once shunned as the scourge of global financial markets, structured finance continues its comeback in Latin America – so long as the external environment permits
Category: Bonds
Posted inDaily Brief
AG Tightens Local Bond Sale
Brazilian builder and concession operator Andrade Gutierrez has completed the sale of BRL639.4m ($307.4m) in domestic bonds according to Anbima, getting interest rates mostly inside of targets. The total came towards the lower end of a BRL600m-BRL800m range it had set, and was split into 3 parts. A BRL82.9m 2017 portion pays the DI+1.15%, in line with the target it set, and amortizes in equal parts in years 4 and 5. A BRL78.5m 2019 pays the DI+1.38%, coming under a DI+1.40% limit, and amortizes in equal parts in years 6 and 7. The bulk of the sale went to a BRL478m inflation-linked 2022 tranche, which pays 6.20%, under a 6.80% limit, and amortizes in equal parts in years 8, 9 and 10. The proceeds are destined to buy shares of the Andrade Gutierrez Concessoes unit and for other purposes. Santander managed the sale, done under the Rule 476 restricted format and rated AA+ on a national scale.
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Arcor Cancels Retap
Argentina’s Arcor has cancelled plans to reopen the 2017 bonds it sold in 2010, it says. The B1/B+ food products maker known for its candy had been looking to add up to $100m through the retap, but has decided not to go forward due to uncertainty in the international markets. It was looking for funds to refinance short term debt. JPMorgan and Santander managed the original 2010 sale, which raised $200m at a 7.25% yield.
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Banco do Brasil Plans Yen Issuance
Banco do Brasil is preparing a yen-denominated bond, according to sources familiar with the matter. The bank has selected Bank of America Merrill Lynch, Banco do Brasil, JPMorgan, Mizuho and SMBC Nikko for the “euro yen” deal that would represent a departure from LatAm issuers’ preference for the Japanese retail-focused Samurai sales of recent years. The timing and details are unclear, but the sale is heard to be as soon as late July at perhaps $500m-equivalent for up to 5 years. The Brazilian bank issued $24m-equivalent in yen-denominated bonds in 1995, according to Dealogic.
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BBVA Continental Gets Debt Approval
Peruvian regulator has given BBVA Continental authorization to issue up to $800m in the international bond market, according to a bank spokesperson. “We obtained authorization from the SBS, but the bank has not yet decided to proceed and has not selected an issuance date,” he says. The bank could issue as much as $500m in 10-year bonds and $300m in 4-year bonds. “BBVA has plans to issue in the dollar markets regularly as it seeks to better match assets with liabilities, diversify its funding base and achieve the best deal in terms of costs,” says an analyst following the lender. Continental’s last visit to the DCM was a $500m sale in January, pricing at par to yield 5.75%, with BBVA, Goldman Sachs and JPMorgan managing.
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Davivienda Capitalizes on Colombia Demand in Bond Debut
Banco Davivienda saw 6x demand for its first-ever dollar bond, taking advantage of demand for Colombian financial credit exposure. Colombia’s third largest bank drew $3bn in orders for the $500m 2022 and achieved one of the lowest-ever coupons in the LatAm Tier 2 bond space, according to bankers following the deal. The Ba1/BB+ subordinated bond priced at 99.441, with a 5.875% coupon, to yield 5.950%, or UST+437.5bp, pricing at the tight end of 6%-area guidance, which followed low 6% whispers. Some EM investors considered the Colombian blue chip’s deal fair value versus Bancolombia’s subordinated 2020 bonds, seen trading at around 5.35% yield. Leads were heard indicating that the bond came nearly flat to where a new Bancolombia bond would price. “Great deal for Davivienda as a new borrower and pricing a Tier 2 inside 6.0%. The book size shows strong demand for a Colombian pure play,” notes a DCM banker away from the deal. The bonds were trading up 1 point in the grey, according to a trader. Roughly 49% was allocated to US buyers, 29% to LatAm accounts, and 22% to Europe and less than 1% to Asia. The Colombian lender is looking to help fund the $800m acquisition of HSBC subsidiaries in El Salvador, Costa Rica and Honduras agreed in January, as well as general corporate purposes. Credit Suisse and JPMorgan managed the sale.
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GNB Sudameris Plots Bond
GNB Sudameris has received authorization to issue subordinated cross-border bonds, it says. The Colombian bank does not give additional details. Last month, the lender agreed to buy HSBC’s operations in Colombia, Uruguay, Peru and Paraguay, for $400m.
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Paper Maker Completes Local Debt
Fabrica de Papel Santa Therezinha (Santher) has finalized the sale of BRL230m ($111m) in the local bond market, according to Anbima. The paper company’s 2016 debenture pays DI+3.6%, and amortizes in 5 parts beginning in mid-2014. Bradesco managed the sale.
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Pemex Continues Ex-Im Bond Issuance
Pemex has issued $400m in bonds backed by the US Export-Import bank, the second issuance under a $1.2bn program guaranteed by the American ECA. The latest batch of 2022 notes with a 5.71-year average life priced at par with a 1.95% coupon, landing inside Tuesday’s 2.00% yield. Pemex has now issued $800m under the program designed to include multiple issuances totaling up to $1.2bn, and aimed at US investors. Proceeds of the issue will be used for payments for US imports of goods and services purchased by Pemex and its subsidiary entities from US suppliers. Credit Agricole, Goldman Sachs and JPMorgan managed the sale, as they did Tuesday’s. In addition to providing a cheap and diversified source of funding, the deals under the program represents the first time an issuer has issued a US Ex-Im backed structured bond for purposes outside of aviation funding, according to bankers following the trade.
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Port Operator Expects Bond Follow-up
Andino Investment Holding Peru expects to start talking to banks in Q4 this year as it looks to refinance a syndicated loan, likely through a $100m bond, CEO Carlos Vargas Loret de Mola tells LatinFinance. Such an issuance would likely come in 2014. AIH has in the last 12 months raised an $85m syndicated loan, a $43m-equivalent IPO and a $110m bond at its Terminales Portuarios Euroandinos unit. Goldman Sachs managed the bond and loan. The loan addressed consolidated debt and minority stake acquisitions by the group’s more than a dozen companies. Andino is starting to work with the rating agencies now to make sure it can move forward with its plans in its preferred time schedule.