Colombian state-owned development finance agency Findeter is expected to sell today between COP250bn-COP500bn ($140m-$280m) in Certificados de Deposito a Termino (CDT) domestic market debt securities. It plans tranches of 1.5, 2 and 3 years linked to the DTF benchmark, and a 5-year inflation-linked portion. Findeter is leading the issue itself, and will use the money for project finance lending. The lender is rated AAA on a national scale. The deal follows a COP400bn February sale. In that transaction, it secured rates of DTF+1.64% for a COP104.6bn 1.5-year tranche, DTF+1.74% for a COP65.9bn 2-year tranche, and 3.78% for a COP229.5bn 5-year inflation linked tranche.
Category: Bonds
Posted inDaily Brief
Light Readies Debentures (1)
Brazil’s Light is preparing to sell BRL500m ($245m) in bonds in the domestic market, it says. The utility plans to pay the DI+1.8% on the 2026 debenture. BRL470m of the issue is to be done through the Light Servicos de Eletricidade unit, and BRL30m through Light SA. Proceeds would fund Light’s project pipeline. Caixa Economic Federal is managing the sale, according to a company official.
Posted inDaily Brief
Builder Completes BRL Bond (1)
Sa Cavalcante has finalized the sale of BRL350m ($172m) in Brazil’s domestic bond market, according to Anbima. The 2019 debenture from the builder and operator of shopping malls pays DI+1.18% and amortizes annually beginning in 2016. Bradesco managed the sale, done under the rule 476 restricted format.
Posted inDaily Brief
CNO Seeks Debt Amendments (1)
Brazil’s Odebrecht is seeking bondholder approval to adjust terms on its $500m outstanding in 7.0% 2020 bonds issued through the Odebrecht Finance unit, it says. It is offering holders $2.50 per $1,000 principal through July 23. 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 are managing the offer.
Posted inDaily Brief
Cruzeiro Mum on Losses (1)
Banco Cruzeiro do Sul says it is still evaluating its financial situation and that it “is not possible to identify any losses or revisions at the institution or its subsidiaries.” The statement follows reports that losses at the mid-size bank are larger than expected. The Brazilian bank is under review by the government’s Fundo Garantidor de Credito, which will evaluate Cruzeiro’s possible accounting irregularities and how they will impact its capital, after which the bank is expected to be prepared for sale.
Posted inDaily Brief
Bancomext Prices Domestic Bond
Mexico’s Banco Nacional de Comercio Exterior (Bancomext) has priced a MXP1.5bn ($112m) 2022 domestic bond at a fixed rate of 5.75%, or Mbonos+49bp. Proceeds will be used to fund bank operations. Banamex and Bank of America Merrill Lynch managed the deal, rated AAA on a national scale. The bank last issued in March, pricing a MXP5bn 2016 floating-rate bond at TIIE minus 5bp.
Posted inDaily Brief
Brazilian Banks Seen Struggling in Lower Rate Environment
Last week’s further chopping of the Selic benchmark underscores the Brazilian government drive to lower interest rates, continuing to dim the outlook for Brazilian banks already grappling with higher delinquencies. With GDP numbers remaining weak, bold government action seems set to continue. In the long term, credit stimulus measures “choke capital markets which already face very strong headwinds from subsidized credit,” Mauro Cunha, president of the Association of Investors in Capital Markets (Amec) tells LatinFinance. “The government is using the wrong tool at the wrong time. It is increasing hazards as it pushes banks to extend credit to customers already facing difficulties,” he adds, noting that if unemployment creeps up by 2-3 percentage points, there will be serious consequences on non-performing loan levels. Default levels for businesses and individuals are hitting levels not seen in years, but at the same time banks are afraid of losing market share. This puts Brazil’s lenders in a difficult position going forward. Pushing loans is not sensible as a counter-cyclical measure, Fernando Rocha, chief economist at asset manager JGP in Rio de Janeiro, tells LatinFinance. He singles out car loans pampered with tax breaks in particular. “We have a problem with credit in Brazil households. Credit has increased very fast in the last two years while servicing of debt is still very expensive,” Mario Pierry, an analyst at Deutsche Bank, tells LatinFinance. “Overall credit demand is more catered for than in 2009 and consumer over-leveraging is much greater Banks are seeing conditions that are negative. Higher delinquencies and lower rates will reduce the yield on free cash and private banks face very stiff competition from public banks,” Celina Vansetti-Hutchins, analyst at Moody’s, tells LatinFinance.
Posted inDaily Brief
Eletrobras Plots Local Bond
Eltrobras plans to raise BRL2bn ($980m) in the domestic bond market, according to Anbima. As part of a BRL4.5bn fundraising plan, the state-controlled electricity provider plans an inflation-linked 10-year bond. BTG Pactual and Santander are managing the sale. There was no additional information regarding timing.
Posted inDaily Brief
GNB Eyes Bond Debut
Fresh off the $400m purchase of HSBC’s assets in 4 countries, Colombia’s Banco GNB Sudameris is preparing to meet bond investors in the US, Europe and Latin America ahead of a possible cross-border bond debut. The bank is scheduled to meet the buyside today in London and Bogota, followed by visits to accounts in Switzerland, Lima, New York, Santiago, Boston and Miami before wrapping up in Los Angeles Friday July 20. A dollar-denominated subordinated Tier 2 transaction may follow, market conditions permitting. Bank of America Merrill Lynch is managing the process. The proposed 144a/RegS transaction is expected to be rated Ba1/BB+. Last month, GNB agreed to buy HSBC’s operations in Colombia, Uruguay, Peru and Paraguay, for $400m, and subsequently received authorization to issue subordinated cross-border bonds. In assigning its BB+ rating, Fitch notes GNB’s robust asset quality, sound reserves, sufficient capital, ample liquidity, operating efficiency, and “moderate yet consistent” performance. These factors are weighed against low margins, concentrated deposits, and the challenges related to “ambitious” expansion plans, Fitch says. The outlook is stable.
Posted inDaily Brief
Mexichem Renegotiates Bothersome Wavin Debt
Mexichem has wrapped up negations with creditors of recently acquired Wavin, it says, renegotiating terms on EUR320m ($390m) in debt. Agreeing to pay down some of the Dutch pipe makers debt, the amount has been lowered from EUR440m, according to an official at the Mexican petrochemicals producer, generating annual savings of EUR3.2m. Several restrictive covenants have also been eliminated. The official declines to comment on the interest on the debt package due 2015, noting only that 15bp-20bp have been shaved off as a result of the negotiations. Mexichem in May surpassed 95% ownership of Wavin shares, spending nearly EUR400m, and has delisted them.