Brazil’s Lojas Renner has started marketing a BRL300m ($146m) domestic bond transaction, according to regulatory documents. The retailer plans to begin bookbuilding July 13 and finish by July 25. The issue is divided into a 2018 debenture paying the DI plus up to 1.05%, and a 2019 inflation-linked tranche paying up to 6.20%. Each portion would amortize in 3 equal parts in each of the final 3 years. The exact amount would be determined during bookbuilding, and a 15% upsizing is possible. The retailer is raising funds to improve its capital structure. Itau and HSBC are managing the sale, rated AA+ on a national scale.
Category: Bonds
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Ajecorp Expects DCM Follow-up
Peru’s Ajecorp, which issued a $300m 10-year bond in May to 10x demand, could look to do another in about 2 years, says a person familiar with the beverage company’s plans. “The longer maturity for a lower cost creates the perfect scenario for funding,” says the person, adding that given the bond’s success, the board of directors has decided it’s a preferable option for the company’s next 5 years. Bank of America Merrill Lynch led the last deal, with Interbank, Jefferies and Rabobank acting as joint lead managers. The company is also expected to build toward an IPO and will seek to improve its ratings. It issued the bond at a 6.5% yield, and used proceeds to repay debt facilities, and the next transaction is expected to have similar purposes.
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Bancolombia Defines Domestic Issuance
Bancolombia has advanced the process for issuing up to COP3trn ($1.67bn) local senior and subordinated debt domestic bond issuance. The bank plans to issue debt of 1.5-40 years through multiple sales, it says. They are expected to begin as soon as July if market conditions permit, according to a source familiar with the banks plans. The proceeds would be used for loan growth and portfolio needs, and Bancolombia’s investment banking arm would manage the issuance.
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Bermuda Whispers
Bermuda is whispering in the low to mid UST+ 200bp range for the yield on a new benchmark-size long 10-year bond, according to sources following the transaction. The island nation wrapped up fixed-income investor meetings on Monday and could price as early as today. The sovereign has an Aa2/AA minus/AA+ rating. HSBC is managing the sale. Bermuda’s previous visit to the DCM was its first, raising $500m in 2020 bonds in 2010, at a 5.603% yield. The bonds were heard trading around 3.40%, or UST+195bp, Monday.
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Fibria Sees Strong Tender Response
Fibria Celulose has received valid tenders from holders of $509m of its outstanding 7.50% 2020 bonds as of an early acceptance deadline, it says. In addition, the Brazilian pulp and paper producer has increased the tender cap to $510m. It launched the offer targeting up to $500m earlier this month, offering holders a clearing price to be determined through a modified Dutch auction process. Each holder that tenders notes specifies a bid price within the $1,000-$1,060 bid range, which represents the minimum consideration such holder is willing to receive per $1,000 principal tendered. The total consideration includes an early tender payment of $50 for each $1,000 tendered before the June 22 early deadline. The tender expires July 9. Deutsche Bank and Citigroup managed. There is about $1.87bn outstanding in the 2020 bonds.
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Markets Like Cemex Refi Proposal
Facing some $7.2bn due in 2014 and a difficult global environment with a weak US recovery, Cemex plans to ask lenders for a 3-year extension, it says, a proactive move that analysts and investors are welcoming. At least 60 lenders holding debt from the Mexican Cement maker’s $14bn 2009 financing agreement are scheduled to meet with the company June 29 and July 2 in Madrid and New York. Cemex is proposing a maturity extension from February 2014 to February 2017, an upfront fee and revised margin, a $1bn pay down in 2013, an enhanced guarantor package and revised operational and financial covenants. “If accepted by all creditors, it would postpone nearly $6bn in principal payments from 2014 to 2017. While uncertainty remains large in the global economy now, presumably by 2017 the construction sector would recover, allowing the company either to repay its loans or refinance under easier terms. Today’s announcement does add some certainty,” says Joe Kogan, head of EM strategy at Scotiabank. Cemex says it has discussed the matter with banks holding approximately 50% of the outstanding balance under the refinancing agreement, and expects to make the $1bn payment in 2013 using funds from selected asset sales. Cemex declines to comment on specifics of the proposal. “This is pretty good news with 50% of lenders on board. Cemex is cash positive, but they need more time and we have not had a serious recovery. They are doing things right, though it is not exactly clear what the new funding rate will be or where they will get the $1bn,” says a New-York based EM investor. “Nothing about this is surprising, but the good thing is that this is happening now and not in late 2013.They have already had conversations with creditors and have decided to go forward, so the expectation is that they already have a workable plan that most would accept,” says an EM credit analyst familiar with the company. The extension could allow Cemex to go to the bond market to address bond maturities out
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Molymet Preps MXP Bond
Chile’s Molymet plans to raise up to MXP1.5bn ($108m) in the Mexican market Wednesday, according to a regulatory filing. The 2017 bonds pay a spread to TIIE benchmark and would represent the fourth issuance under a MXP6bn program. Proceeds from the Chilean mining company’s issue are marked for general corporate purposes. Banamex is leading the issue, rated AA+/AA on a national scale.
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Pemex Gets Exim Funds, Preps Bonds
The US Export-Import Bank has authorized $1.2bn export financing for Mexico’s Pemex, it says, which the oil producer will seek to use in the form of guaranteed bonds. Pemex anticipates 4-7 such US Ex-Im guaranteed issuances in the capital markets in the next few months for up to $1bn, but does not offer additional details. In the event bond funding is not feasible, US Ex-Im could provide direct loans. The package also includes a $200m facility to support purchases from US small businesses. Proceeds would fund oil and gas exploration projects.
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Power Distributor Closes Debenture
Companhia Energetica de Maranhao (Cemar) has completed the sale of BRL280m ($136m) in debentures in Brazil’s domestic market, according to Anbima. A BRL101.4m 2018 bond pays the DI+1.08%, and a BRL178.6m inflation-linked 2020 pays 5.9%. Each tranche amortizes in 3 parts coming in each of the final 3 years. The unit of Equatorial Energia is using proceeds to fund working capital and repay debt. Itau managed the sale, done under the rule 476 restricted format.
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BCP Preps Mexican Domestic Bond
Banco de Credito del Peru, through its Panama branch, is preparing to sell bonds to be denominated in pesos, UDIs or USD in Mexico’s domestic market, according to a regulatory filing. The bonds will represent the first issuance from a MXP10bn program and pay a fixed rate or spread to TIIE benchmark. The net proceeds of the issue may be used by BCP to meet its operational requirements including funding its lending operations. Further details were not provided. Banamex and Deutsche Bank will manage the first issuance, with expected ratings of AAA on a national scale.