Brazil’s Pague Menos is planning to raise BRL260m ($130m) in the local bond market, it says. The drugstore’s 2016 debenture would pay the DI plus 1.19%. Proceeds are marked for working capital and improving the issuer’s debt profile. Banco do Brasil is managing the sale, done under the rule 476 restricted format.
Category: Bonds
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Energisa Considers Domestic Issuance
Brazil’s Energisa has filed for a BRL400m ($200m) bond sale in the domestic market, it says. As it is only a preliminary filing, it has not decided on the terms, though up to 2 tranches are possible. BTG Pactual is managing.
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YPF Seeks Debt Waivers
Argentina’s YPF is pursuing waivers from creditors to avoid the accelerated repayment of more than $1bn in debt, it says. The recent nationalization of YPF by the Argentine government might constitute a default on about $1.6bn of its debt, which would trigger early repayment. “In case those waivers are not obtained and immediate repayment is required, the company could face short-term liquidity problems. However, management expects that in such case it could obtain financing from several sources, including the company’s operating cash flows and available credit lines,” YPF says. Additionally, YPF says it currently isn’t in compliance with New York Stock Exchange listing requirements regarding its audit committee, and could face the delisting of its ADS. Separately, Spain’s Repsol – whose 57% stake in YPF was reduced to 6% through the expropriation earlier this month – says is will sue Argentina in a US court, and seek arbitration through the World Bank’s International Centre for Settlement of Investment Disputes.
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CPFL Adds Debentures to To-Do List
Fresh off of the filing of an IPO, CPFL Renovaveis plans to raise BRL430m ($215m) in the Brazilian domestic bond market, it says. The 2022 debentures would pay the DI+1.7% and amortize in 8 parts, beginning in year 3. The renewable unit of CPFL Energia plans to use the funds to make acquisitions and to fund its projects. It does not name the banks hired to manage the sale, and did not return a request for comment. The renewable energy developer has a massive pipeline and is in need of funds to realize it. An IPO could launch as soon as June, and raise more than BRL1bn. It plans to offer primary shares, as well as secondary shares owned by several investment funds, including those linked to Patria Investimentos and Bradesco. CPFL plans to use 80% of the funds raised to develop new projects, and the remainder for acquisitions. Bank of America Merrill Lynch and Itau are global coordinators, with Morgan Stanley, Bradesco and Banco do Brasil as bookrunners. CPFL Renovaveis has 46 small hydroelectric, biomass and wind generation projects in operation, with 850 megawatts of capacity. In addition, it has 30 projects under construction, totaling 885 megawatts, and 39 in development, totaling 3,092 megawatts. Acquisitions have also been a big theme for CPFL, which spent BRL111.5m on hydro assets in March and BRL1.062bn on wind farms the month before.
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Mexico Markets Samurai
Mexico has started marketing efforts for a Samurai bond this week after filing with Japan’s Finance Ministry on Monday, Juan Pablo Newman, Mexico’s general director of debt issuance, tells LatinFinance. The nation is aiming to become the first BBB rated borrower to issue a Samurai bond without a JBIC guarantee. “We are the first BBB borrower trying to issue in the Samurai market. If issued, this will be an important and groundbreaking step for a lot of BBB rated issuers looking to place public and unguaranteed bonds in Japan,” the official says. For now, the sovereign has registered a minimum amount of JPY10bn ($125m), split equally between 3 and 5-year bonds, and Newman says price thoughts of Yen Libor plus 80bp-100bp for a 3-year and 100bp-120bp for a 5-year tranche are preliminary and subject to change. Depending on investor appetite, Mexico may also adjust for a longer tenor or different size. Mexico has until now sought longer maturities but with the aid of a JBIC guarantee, most recently selling JPY150bn ($1.8bn) of 10-year bonds at a 1.51% yield, or Yen Libor plus 50bp, in October 2010. Falling into Mexico’s medium to long-term investment program, Japanese investors represent an increasingly important market and diversification alternative, after the USD and EUR bond markets. Some bankers following Mexico’s Samurai bond plans say the sovereign could pay 110bp over its 5-year dollar curve to price without JBIC support. Newman says that higher costs are generally associated with entering new markets, but funding costs are expected to decrease over time, as seen when the sovereign first entered the USD and EUR markets. “With Japan’s interest rate at 0%, a new 5-year issued at Yen Libor plus 120bp would equal to a low yield-to-maturity of 1.50%,” he explains. Citigroup, Mitsubishi UFJ Morgan Stanley, Nomura and SMBC Nikko have been mandated on the deal. Marketing in Japan takes an average of 3-4 weeks, Newman says, with pricing to follow if market conditions perm
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Monex Readies MXP Debut
Mexico’s Holding Monex is preparing to raise up to MXP1bn ($73m) in what would be its domestic Mexican bond market debut. The financial services company’s 2015 notes will be issued under a MXP2bn program, and pay a spread to the TIIE benchmark. Pricing is tentatively scheduled for the first half of June. Proceeds will be used for general corporate purposes. BBVA Bancomer is managing the transaction.
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Argos Set for Local Bonds
Colombia’s Cementos Argos is expected to issue up to COP500bn ($282m) in domestic bonds today, with the ability to add up to COP200bn depending on demand. The issuer can choose from 3 tranches. A 2018 portion pays up to IPC+4.20%, a 2022 up to IPC+4.55% and a 2027 up to IPC+4.85%. The funds will be used to refinance liabilities and for working capital. Bancolombia is leading the sale, rated AA+ on a national scale.
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Banorte Preps MXP Issue
Mexican lender Banorte is looking to sell MXP3.2bn ($232m) in 10-year NC5 Tier 2 subordinated bonds in the local market, according to a person familiar with the deal. The issuance is expected to take place in June, with proceeds to be used to fund working capital. The bonds would be the fifth issuance under a MXP15bn program, and will pay a spread to the TIIE benchmark. Ixe is leading the deal, rated AAA on a national scale.
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Canadian Prices Panama Project Bond
Inmet Mining has priced a $1.5bn 2022 NC4 bond, upsizing from $1.0bn and widening the price against a tricky market backdrop. Seeking funds for the Cobre Panama copper project, the B1/BB minus Canadian miner priced at 98.584 with an 8.75% coupon to yield 9.00%, at the wide end of 8.75%-9.00% guidance revised from an earlier 8.25%-8.50% level. The proceeds help develop the $6.18bn Cobre Panama copper project in Panama, of which Inmet has an 80% share. Citi, Credit Suisse, BAML, JPMorgan, Morgan Stanley and RBC managed the transaction, with CIBC and Scotia as co-managers.
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Chile Metro Defines Bond Terms
Empresa de Transporte de Pasajeros Metro, meeting with Chilean bond investors this week, has further defined the terms of its upcoming domestic market issue. The Santiago subway operator will look to sell up to UF1.5m ($68m) in 21-year bonds with a coupon of 3.85%, as soon as next week. The funds are to be used to refinance debt. Santander is managing the sale, rated AA/AA+ on a national scale. Metro last issued in October 2011, placing UF5.2m in 21-year bonds at a 3.75% coupon to yield 4.00%, or 129bp over benchmark, also through Santander.