Brazil’s Energisa plans to hold the pricing period for its BRL400m ($199m) domestic bond sale, from June 27 to July 10, according to regulatory documents. Energisa, which has been marketing the sale, will set during this period the size of each of the sale’s 2 tranches and their interest rates. A 2017 portion pays the DI plus up to 1.3% and amortizes in two equal parts in the final two years. A 2019 tranche pays the DI plus up to 1.55% and amortizes in two equal parts in the final two years. BTG Pactual is managing the sale, rated Aa3 on national scale.
Category: Bonds
Posted inDaily Brief
Mexicans Clinch Deals as Local DCM Remains Open
While other regional markets have slowed to a stop, Mexico’s domestic bond market remains active, with Banorte raising MXP3.2bn ($232m) in subordinated bonds and Infonavit scooping up MXP1.97bn Wednesday. “Investors are looking for new names to diversify funding, but those names have to be solid names with a good rating of minimum AAA or AA,” says a Mexican DCM banker. Such was the case for Mexican mortgage and social services entity Infonavit, which raised MXP1.97bn, through the Infonavit Total unit, in UDI-denominated RMBS 2040 bonds. The 4.20% pricing comes inside of the 4.60% it saw on a previous issuance. Demand hit 2.5x, and at least 75% of the sale was allocated to pension funds, according to a banker on the deal, with the remainder coming from private banking, bank treasuries and insurance companies. Banorte issued MXP3.2bn in a 10-year NC5, at TIIE+150bp, inside price thoughts of TIIE+175bp. Ixe led the AAA-rated deal. Demand was heard driven by institutional investors and retail accounts. “Outside of Mexico there is volatility, but there is a lot of liquidity and stability in Mexico,” says another DCM banker, noting that spreads have remained stable this year. With pension funds showing appetite, more names are waiting in the pipeline. Holding Monex is scheduled to raise up to MXP1bn today in what would be its domestic market debut. The financial services company’s 2015 notes will be issued under a MXP2bn program, and pay a spread to the TIIE. BBVA Bancomer is managing the transaction, rated A on a national scale. Next week, issuers will try to break the FIG dominance of the market. Holcim Mexico was scheduled to issue up to MXP3bn June 13, at 5 and 10-year maturities. Banamex, BBVA, and Santander are managing. Also on that day, Penoles is to issue $200m-$240m in 10-year dollar-denominated bonds, through Banamex, BBVA Bancomer and Santander. Mexicans have issued $3.09bn-equivalent this year through Wednesday, according to Dealogic data, down from $6.58bn-e
Posted inDaily Brief
Santander Leasing Preps Debenture
Santander Brasil’s leasing arm is planning to sell BRL5bn ($2.46bn) in domestic bonds, it says. The 2032 notes are expected to pay 100% of the DI. Proceeds would fund operations. The bank does not elaborate on the timing. Santander’s capital markets unit is managing the sale.
Posted inDaily Brief
BNDES Lowers Interest on Credit Lines
Brazil’s BNDES plans to reduce interest rates on credit lines for companies to finance their working capital, according to local news and wire reports citing public remarks from bank president Luciano Coutinho. The measures aim to avoid a slowdown of the growth of Brazil’s economy, and follow reductions from several retail banks, as well as large cuts in the benchmark by the country’s central bank. Credit lines used by companies to finance working capital are seen coming at less than 7% per year, down from 9.5% currently.
Posted inDaily Brief
Online Retailer Plans Debentures
Brazil’s B2W is planning to sell BRL300m ($148m) in domestic bonds, it says. The 2017 would pay 120% of the DI. The online retailer resulting from the merger of Submarino and Lojas Americanas’ online business is raising funds for working capital. An official at the company does not respond to a request for comment on the managers of the sale, to be done under the rule 476 restricted format.
Posted inDaily Brief
OSX Advances Bond Process
Brazil’s OSX was collecting RFPs through last week for its next project bond transaction, according to market participants. Company officials told LatinFinance last month that the Brazilian oil company was evaluating funding options for its next floating production, storage and offload (FPSO) project, including another project bond. The Eike Batista-controlled oil services company would look to raise about $600m in the US or Norwegian market, in a deal similar to its March transaction, known as OSX-3. Though the first 2 OSX FPSO platforms were financed in the loan market, OSX finds the high-yield bond market deeper and more preferable. The shipbuilder raised $500m in 9.25% 2015 bonds in March to fund OSX-3. Pareto Securities and DNB Markets led.
Posted inDaily Brief
Banorte Talks Price
Mexican lender Banorte is looking to pay TIIE+175bp-area for up to MXP3.2bn ($232m) in 10-year NC5 Tier-2 subordinated bonds, scheduled to price today in the local market, according to a person familiar with the deal. This will be the fifth issuance under a MXP15bn program. Proceeds will be used to fund working capital. Ixe is leading the deal, rated AAA on a national scale. Banorte last visited the bond market in 2009, when it priced a MXP2.2bn 2019 bond at TIIE+200bp, according to Dealogic data. The bank visited the dollar market in July 2010, when it sold a $300m 2015.
Posted inDaily Brief
Carozzi Joins Chilean Bonds Likely on Hold
Chile’s Empresas Carozzi expects to delay its domestic market bond issue, according to sources following the sale, joining a line of issuers waiting for better conditions. The food and agricultural products producer had been targeting up to UF3m ($131m) later this month. It has decided to wait for better market conditions, says the source, adding that there have been few issuances in the last several weeks, with corporate players overall – save for the largest, and most highly-rated – putting their plans on hold. Banchile-Citi is managing the sale.
Posted inDaily Brief
Cruzeiro Impact on Peers Seen as Temporary
Despite assets taking a hit, investors were not terribly concerned for the Brazilian mid-size banking sector following the announcement of a temporary takeover of payroll lender Cruzeiro do Sul, citing noncompliance with financial standards. Cruzeiro’s bonds dropped Monday, with the 2020’s closing at 48-54, or 22% yield, according to investors, down from levels of around 80. B2 rated Cruzeiro’s troubles may cause an uptick on borrowing costs, but it is not expected to be permanent. “There is intervention [from the central bank] on the back of potential fraudulent activity, but the intention is to continue servicing the debt with the intention to sell Cruzeiro. There will be a spillover to other bank institutions that give the same services, but it shouldn’t be a problem for banks with better balance sheets. The tone of the market is risk-off and it complicates things for issuers at the moment,” says a west coast-based EM fixed-income investor. “For the innocent it makes it more expensive to access the bond market and for the guilty it will shut them off,” adds another bond investor. “There is always worry in the sector when this happens, but I think Cruzeiro do Sul is an isolated case,” Aloisio Lemos, equity analyst at Agora Corretora, tells LatinFinance. Cruzeiro represents less than 0.5% of the sector by assets or by deposits, and analysts consider payroll lending as one of the safer banking segments. Some mid-size lenders have been trading at wide spreads, with BBB rated Banco BMG’s 2020 bond trading at 13.8% and BBB+ Banco Bancusesso’s 2020 at 17.3%. Cruzeiro has been shut of from international funds, but others, including BMG in March, have had access. Like Banco Panamericano in 2010 – which required a bailout after irregularities were found – a sale is expected. Cruzeiro said it was holding talks with Panamericano buyer BTG Pactual, though discussions were said to have broken down. Brazil’s central bank announced Monday an intervention for 180 days in Cruzeiro
Posted inDaily Brief
Davivienda Enlarges Bond Appetite
Colombia’s Banco Davivienda now plans to issue up to $500m in international subordinated bonds, it says. The lender had previously been considering up to $350m, likely at a 7-year maturity. The bank has indicated intentions to issue this year, though with the markets keeping many issuers away thus far, the exact timing remains unclear. Davivienda is rated BBB minus. The bank is also a regular issuer in Colombia’s domestic market. In April, it raised COP400bn ($226m) in inflation-linked domestic subordinated bonds, getting a 4.37% yield for COP181.4bn in 2022 bonds and 4.56% for COP218.6bn in 2027s. An ADR equity issuance is also on the lender’s agenda. Davivienda has been using funds to expand internationally.