Banco de Credito del Peru has completed the sale of $465m in bonds backed by diversified payment rights (DPR), it says, getting a larger size and distribution than is typical of the asset class in LatAm. A $150m 2017 with a 3-year average life portion pays a spread to Libor, and a $315m 2022 tranche pays a fixed rate. A manager on the deal declines to provide additional comment on the pricing. Standard Chartered and Wells Fargo are managing the sale, rated A/A.
Category: Bonds
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Credito Real to Issue
Mexico’s Credito Real is scheduled to issue a bond of up to MXP500m ($38m) today in the domestic market. The 3-year domestic floating-rate bond had been expected as soon as Wednesday. Proceeds are marked for general corporate purposes. BBVA Bancomer and Banorte-Ixe are leading the deal, rated A/A. In April, S&P upgraded the company’s rating to BB from BB minus globally and to A from A minus on a national scale.
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Mexico Raises Syndicated Mbono
Mexico has sold MXP30bn ($3.80bn) in 2017 Mbonos through a debt syndication, it says. The 5.0% coupon bonds priced at a discount to yield 4.88%. The 35 international and domestic accounts participating included banks and brokerages (59%), mutual funds (32%), government entities (7%) and pension funds and insurance companies (2%). Overall, international investors accounted for 33%. Banamex, Deutsche Bank and Bank of America Merrill Lynch managed.
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Sifco to Meet Investors
Brazil’s Sifco is preparing to meet fixed-income investors beginning Friday, according to people with knowledge of the plans. The manufacturer of forged components starts in Miami, and will visit Switzerland, London, New York, Boston, Los Angeles and Santiago, finishing July 30. Goldman Sachs and Citi are managing the process. There is not yet any indication of a new transaction. Last year, Sifco raised $75m through a RegS bond transaction, with the 2016 getting an 11.5% yield. Jefferies and Eurovest managed that sale. Sifco is rated B minus.
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Acciona Wind Farms Aim for Project Bonds
Two units of Spain’s Acciona are set to begin investor meetings this week ahead of what bankers and analysts say would be LatAm’s first wind energy project bonds. Looking to replace debt initially done in the loan market, the BBB minus rated Oaxaca II and Oaxaca IV projects are seeking respective $164.5m and $167.5m 2031 bonds with an average life of 13 years, according to sources familiar with the process. The key for moving funding away from the bank market is the operating projects’ lack of construction risk, as well a strong track record for wind generation nearby, most notably the Eurus facility also developed by Acciona. “This model has been used in many locations around the world,” Alberto Santos, analyst at Fitch, tells LatinFinance, including the US and Europe. He says the issuers’ investment grade rating reflects the location, proven technology and Acciona’s international status. In addition to being the region’s first wind project bond, he notes it is also unusual to have two separate transactions for a pair of wind farms that are nearly identical. The most recent comparable transaction, bankers say, might be a US solar power bond closed in February. Berkshire Hathaway-sponsored Topaz Solar’s $850m BBB minus rated 5.75% 2039 bond now trades inside of 5.50%. That the CFE is locked into a 20-year power purchase agreement is another strength of the Oaxaca deal, Fitch notes. Bankers suggest pricing should be viewed as a spread to CFE, just as the recent Brazilian drillship project bonds were viewed as paying spreads to Petrobras. “Financing construction in the bank market and replacing it later in the bond market is a template we should see more of,” says a banker on the deal. This has already been done with other assets, such as the drillships, he notes, and makes sense given the limitations on bank funding in recent years. The Oaxaca roadshow begins today in Boston, and visits New York, Chicago and Los Angeles through July 24, with additional meetings pos
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Findeter Issues in Local Market
Colombian state-owned development finance agency Findeter has sold COP500bn ($282m) in Certificados de Deposito a Termino (CDT) domestic market debt securities. A COP127.6bn 2013 tranche pays DTF+1.46%, a COP148bn 2014 tranche pays DTF+1.58%, a COP60.7bn 2015 tranche pays DTF+1.64%, and a COP163.7bn 2017 inflation-linked tranche pays 3.85%. The issuance saw demand of nearly COP682bn, and will help fund operations. Findeter, rated AAA on a national scale, managed the sale itself.
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Pemex Finishes Exim Issuance
Pemex has issued another $400m in bonds backed by the US Export-Import bank, the third and final issuance under a $1.2bn program guaranteed by the American ECA. The 2022 bonds with a 5.71-year average life priced at par with a 1.70% coupon, yielding inside of 1.75%-area guidance. Proceeds from the issue will help fund payments of goods and services purchased by Pemex and its subsidiary entities from US suppliers. Credit Agricole, Goldman Sachs and JPMorgan managed the sale, aimed at US high-grade accounts. The previous two transactions in the series were executed in the final week of June. 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 trades.
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Peru Sugar Exporter to Meet Investors
Corporacion Azucarera del Peru (Coazucar) is scheduled to start meeting investors Thursday ahead of a possible cross-border bond debut. The sugar and ethanol unit of Grupo Gloria is to begin in London and Santiago, and visit Switzerland, Lima, Miami, Boston and Bogota, before finishing in Los Angeles July 25. A BB/BB+2022 bond is expected to follow. Bank of America Merrill Lynch and Citi are managing the process. A deal would offer a test for high-yield corporate appetite in the region. Mexico’s ICA (B1/BB minus) is expected to complete a roadshow today, though it is unclear if the builder plans a transaction. A sale from either would be the first non-financial corporate high-yield sale since Inmet Mining in early May. Coazucar operates 5 mills and 8 distilleries located in Peru, Ecuador and Argentina, crushing 8.4m tons of sugarcane per year.
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Details Emerge on New TGN Debt (1)
Argentina’s Transportadora de Gas del Norte (TGN) has disclosed the details of the new debt included in an exchange offer launched last week. The gas company plans to issue as much as $170m in new 2019 bullet step-up notes, paying 3.5% through the first 2 years, 7.0% through the second 2 years and 9.0% during the remainder, according to a company official. Up to $174m in claim protection notes pay no coupon and are due after one year, unless there is a credit event. TGN said last week it would exchange any and all of its $141m outstanding in 9.52% 2012 bonds and $204m outstanding in 9.45% 2012 bonds, for the new notes and cash. In the offer, accepting holders receive, for each $1,000 principal, $494.20 in new step-up notes, $164.68 in new claim protection notes, and $280 in cash. Holders accepting before an August 8 early date receive an additional $49.45 in cash per $1,000. The offer expires August 17, and is contingent upon a minimum 88% acceptance. Barclays is managing. TGN defaulted on its debt in 2008.
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EM Debt Beating Expectations: JPMorgan (1)
EM fixed income returns are so far outperforming JPMorgan’s base case scenario for 2012, the bank says. Its EMBIG index has been the top-performing asset class year-to-date across both developed and EM fixed income and equities, with a 9.6% return. It expects 9%-12% returns across EM assets for this year. The EMBIG and the CEMBI corporate bond index have “surprised on the upside,” by tightening 61bp and 50bp, respectively, since the beginning of the year. LatAm EMBIG members have tightened 48bp, compared to 100bp for Emerging Europe and 25bp for Asia. In the CEMBI, LatAm only managed to tighten 4bp ytd, with Asia and EMEA tightening by 62bp and 110bp, respectively. The bank remains marketweight on the EMBIG, with a 350bp spread target for year-end, and moves the CEMBI back to marketweight from underweight, targeting a year-end 400bp-450bp spread level. As for specific LatAm credits, JPMorgan recommends remaining overweight Belize into its restructuring process and overweight Venezuela given the possibility of regime change. It moves Peru to overweight and Colombia to underweight. It notes it is underweight Brazilian consumer-related credits, including Hypermarcas, Brasil Foods, Marfrig, JBS, Arcos Dorados and Gol, expecting softer demand and higher cost pressures.