Brazil’s Minerva plans to sell BRL450m ($222m) in the domestic bond market, up from the BRL420m originally announced, according to Anbima. The 2022 debenture is expected to pay a fixed rate of 16.95%. The meatpacker is looking for funds to support its projects for the next 10 years. An official declines to comment on the timing or additional details.
Category: Bonds
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Brazilians Discuss Local GDNs
Brazilian regulators are considering the possibility of creating global depositary notes (GDNs) tied to local corporate bonds. “The subject is in the preliminary phase of analysis at the CVM,” a CVM spokeswoman says. She declines to give additional details about the initiative, which would be done in the hopes of increasing trading in the local market by luring foreign investors. Several banks are working with regulators on the subject, bankers say. “There is a market for GDNs in Brazil, and GDNs are a better fit for corporates over sovereigns. But there are a series of laws that have to change to make GDNs work in Brazil, says one DCM banker, who notes it would be at least 6 months before a debut could be seen in Brazil. In Mexico, the first corporate global depositary note from Pemex appeared in December.
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DCM, ECM Issuers Again with Little Clarity
Although a Spanish bailout has been set up and Greek elections have passed, there is still little assurance for Latin Americans waiting to issue in the debt and equity markets. Global sentiment was calmed somewhat after Sunday’s Greek elections, but issuers still find themselves on difficult footing. “The market consensus is Greek avoidance of short-term catastrophe, but investors are cynical about the medium to long-term outlook. There is still uncertainty, and people are disappointed. My feeling is that investors are relatively conservatively positioned at this moment,” says a New York-based EM debt portfolio manager. Noting strong performance from high-grade bonds, investors say issuance from high-quality LatAm issuers would still be welcome, just as it has been throughout the periods of volatility. “Last week people were worried about the Greek elections and the market is still trying to digest what this means and not sure what comes next. Maybe the G20 meeting will give us some insight, but expect more of the same,” says a LatAm DCM banker. Paraguay’s Banco Continental and Bermuda remain on the road, though neither would likely be a very large sale. On the equity side, Cencosud is poised to test the waters with a New York and Santiago follow-on, pricing Thursday to raise about $600m, a target reduced last week due to volatility concern. Brazil Pharma is scheduled to raise about BRL600m ($293m), also in a follow-on that evening. After a Suzano Papel e Celulose follow-on next week, targeting BRL1.5bn, there are several IPOs in the pipeline that could price in July. Issuers face the decision now as to whether to launch. Bankers say the larger IPOs – such as CPFL Renovaveis, Quieroz Galvao Oleo e Gas, and “re-IPO” Taesa – have the best shot. “I expect to see 2-3 deals before July, but conditions should pick up before the end of the year. The bad mood is justified, but somewhat exaggerated,” says a Sao Paulo-based ECM banker with deals in the pipeline. Barclays Cap
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Fovissste Set for RMBS Issuance
Mexico’s government housing agency Fovissste plans to raise MXP5.28bn ($381m) through a domestic RMBS sale, and is targeting a Thursday pricing. The sale is expected to price in line with previous issuances. The 30-year bond would be denominated in UDIs and pay a fixed rate. BBVA Bancomer and Banorte-IXE are managing the sale, rated AAA on a national scale. The government-backed lender last visited the market in March, raising MXP4.06bn in 2041 notes paying 4.65%.
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Grupo Kuo Talks MXP Price
Mexico’s Grupo Kuo is expected to price a MXP1bn ($72m) 2019 domestic bond at around TIIE+200bp, according to market participants. The sale is scheduled for Thursday. Ixe is managing the transaction, rated A on a national scale. In 2010, Kuo priced a MXP700m 2015 bond at TIIE+260bp through IXE and Banorte. The group has holdings in the consumer goods, chemical and automotive industries.
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JPM Sends Funds to Mexico
JPMorgan has made a $250m capital increase to its Mexican subsidiaries, it says. The sum, funded to JPMorgan Grupo Financiero, will allow the global financial institution to provide additional lending capital to its Mexican customers. It represents a 62% capital increase, and brings the firm’s total capital in Mexico to approximately $653m.
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Penoles Nears Domestic USD Bond
Mexican mining conglomerate Penoles is preparing to sell around $200m in 2022 dollar-denominated bonds in Mexico’s domestic market on Wednesday. Seeking to match liabilities with dollar cash flows, the miner plans to use proceeds to fund expansion and cost reduction projects as well as for general corporate purposes, says Moody’s, which assigns a national scale Aa1 rating. The notes will be guaranteed by the company’s principal subsidiaries, excluding Fresnillo, the agency adds. Banamex, BBVA Bancomer and Santander are managing the deal, rated Aa1/AAA on a national scale. The Mexican miner last sold $530m in dollar-denominated bonds in Mexico’s domestic market in September 2010, pricing a $400m 10-year tranche 5.15%, and a $130m 2015 at Libor+178bp.
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Abril Unit Plans Debentures
Editora Anglo, a unit of Brazil’s Abril Educacao, is planning to raise BRL215m ($105m) in the domestic bond market, it says. The 2017 bonds would pay the DI+1.7, and amortize in equal parts in each of the last 4 years. Proceeds would refinance debt. It does not name the manager on the sale, to be done under the rule 476 restricted format, and could not be reached for comment.
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CPFL Wraps Up Local Bond
CPFL Renovaveis has completed the sale of BRL430m ($210m) in the Brazilian domestic bond market, according to Anbima. The 2022 debenture pays the DI+1.7% and amortize in 8 equal parts, beginning in year 3. The renewable unit of CPFL Energia plans to use the funds to make acquisitions and to fund its projects. Itau handled the sale, done under the rule 476 restricted format. The renewable energy developer has a massive pipeline and is also preparing an IPO, which could launch as soon as this month and raise more than BRL1bn.
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Daimler Preps MXP Bond
Daimler Mexico is planning to issue up to MXP 1bn ($72m) in 2 or 3-year floating rate domestic bonds on Tuesday. The car manufacturer’s notes come with a guarantee from the German-based parent. BBVA Bancomer and Banamex are managing the sale, rated AAA on a national scale. Daimler last came to market in September, when it priced a MXP1bn 3-year bond at TIIE+50bp.