Mexican mining conglomerate Penoles is preparing to sell $200m-$240m in dollar-denominated bonds in Mexico’s domestic market, according to regulatory filings. The 10-year fixed-rate notes have an expected pricing date of June 13. Seeking to match liabilities with USD 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 new 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.
Category: Bonds
Telecom Places Private Bond Facility
Columbus International has sold $82m in new 2017 bonds, under a senior notes facility that allows it to borrow up to $143m more on the same terms. The 9.5% bonds were placed with a single private high-yield fund, and no bank was involved, according to a company official. The Barbados-based Caribbean telecom operator may draw down additional amounts during the next year, and the notes are callable after 2.5 years. The proceeds will be used to accelerate the completion of current capital plans, fund potential future acquisitions, enhance balance sheet liquidity and flexibility and for general corporate purposes. “The new notes facility is credit negative to Columbus since it increases its leverage while free cash flow remains negative,” says Moody’s, which rates Columbus B2. Columbus’ leverage was 3.9x adjusted debt to Ebitda as of March 31, and the agency had expected it to be “well below” 4x. Columbus placed a $450m 11.5% 2014 international bond in 2009.
Banco Pine Talks CHF Guidance
Brazil’s Banco Pine is giving guidance of mid-swaps plus 493bp-area guidance for a minimum CHF80m ($83m) 2.5-year bond expected to come by the end of the week, according to investors. Books are expected to close on Friday, with pricing expected on the same day. UBS is sole lead on the transaction, which has a BB rating and would be a debut in Switzerland. In December 2011, the bank closed a $37.5m loan from Saudi Arabia’s Al-Rajhi Bank, claiming to be the first Islamic funding for a Brazilian bank. In April last year, it had plans to issue a $300m 5-year bond in the dollar market but later postponed amid a backdrop of tanking US equity markets and oversupply from Brazilian mid-sized banks. Elsewhere in the cross-border new issuance space, Brasil Foods made no announcements on any new transactions following the completion of investor meetings Tuesday.
Bancolombia Eyes Domestic Issuance
Bancolombia’s board of directors has approved an up to COP3trn ($1.6bn) domestic bond issuance, and the Colombian bank could look to issue in the second half of this year, according to a person familiar with its plans. Further terms have yet to be determined, though funds could be used generally for loan growth and portfolio needs. Bancolombia’s investment banking arm would manage the issuance.
Brazilian Paper Maker Plots Local Debt
Santher, a Brazilian paper manufacturer, plans to sell BRL230m ($115m) in Brazil’s local debenture market, it says. The 2016 bonds are to pay the DI plus 1.6%, and amortize in 5 equal parts beginning 2014. Santher will repay existing debt with the proceeds. It does not name the banks on the deal, saying only it has been authorized to hire banks, and a spokesperson declines to comment.
Brazilians Optimistic on Infrastructure Bonds after Tiete Pull
Brazilians in the country’s domestic bond market remain optimistic about the prospects for debentures issued under legislation offering buyers tax advantages if the proceeds are used for infrastructure. Toll road operator Rodovias do Tiete has cancelled the sale process for a BRL650m ($327m) 2024 bond, citing market conditions, according to sources following the deal. The inflation-linked bonds were to pay up to 8.75% and be the first to take advantage of legislation eliminating the IOF tax for buyers of bonds whose proceeds were destined for infrastructure projects. The deal had initially been expected to price the week of May 16, and was twice delayed. “The tax benefits [of the class] are very good. There was not total clarity they would be entirely applicable in this case,” says a Sao Paulo-based fixed-income investor following the deal. The delays in pricing were partially due to the uncertainty, he says, as to whether the bonds would fully qualify for the tax benefits, as the proceeds are use used to pay off BRL480m in short-term debt in addition to funding road capex. Spokespeople for the issuer and Barclays – sole lead in its first-ever Brazilian domestic market bond deal – decline to comment. “It has yet to be proven as a real market, but we are betting that that is the future,” Joao de Biase, global head of fixed income at Itau, tells LatinFinance, speaking about the opportunities under the law, known as 12431. As with the rest of the Brazilian local bond market, he says his shop sees tremendous growth prospects ahead, based on an environment of falling interest rates. “The prospects for the asset class are quite stable. Locals will want this type of return,” says a Sao Paulo-based DCM banker away from the deal. Bankers say there are other RFPs out there for this type of transaction. One particular aim of the legislation, given the IOF tax break, is increased foreign participation. Rodovias do Tiete was heard to market the deal in the US, UK and Chile, in
Lender Registers COP Bonds
Bancamia has registered a domestic bond issue of up to COP400bn ($220m), it says. The Colombian microlender can choose from 5 series, which are expected to have maturities between 1 and 5 years, and pay interest at fixed rates or rates set to the country’s various benchmarks. Bancoldex is partially guaranteeing the bonds. The issue will be led by Corficolombiana.
Mabe Reaches 65% in Tender
Controladora Mabe has received acceptance from holders of $130m, or 65.22%, of its 2015 bonds in a tender offer, as of May 29, it says. The Mexican white goods manufacturer has also extended the offer’s early payment deadline from May 29 to match the June 11 final deadline. Mabe is offering to exchange the 6.5% 2015 bonds for new reopened 7.875% 2019s. It is offering $1,000 in the new bonds for each $1,000 tendered of the 2015s. Bank of America Merrill Lynch is managing the process. The 2015 bonds were sold in 2005 for $200m. The 2019s to be reopened in the operation were originally sold in 2009, for $350m, through BAML and HSBC.
State Entity Preps Debentures
Minas Gerais Participacoes (MGI), a holding company controlled by the state government of Minas Gerais, is preparing to sell BRL400m ($201) in domestic bonds, it says. The 2017 bonds would pay the DI plus up to 3.5%, and can be upsized by 15%. The proceeds will be used to repay the state government under a credit receivables contract. Citi, Santander and ABC Brasil are managing the sale, which has not yet been rated. The regulatory documents do not indicate the timing. MGI is 99% owned by the state, with minority holders including Cemig and the state development bank. The bank is focused on helping companies in the development phase, and its holdings include 16% of the Helibras helicopter manufacturer.
Toyota Prices MXP Bond
Toyota Financial Services Mexico has sold MXP1bn ($71m) in domestic bonds, in a third issuance under a MXP10bn program. The 3-year notes priced at TIIE+33bp. The level sets a new benchmark for peers that have normally paid in the TIIE+50bp range, a banker on the deal says. The deal was heard 3.8x oversubscribed, with mutual funds, retail investors, and Afores heard participating. Proceeds will help refinance MXP1bn due in November 2012. BBVA Bancomer and Banamex managed the transaction, rated AAA on a national scale. In June 2009, Toyota Financial Services sold MXP1bn in 18-month notes at TIIE+180bp.