A project for Peruvian government-backed health service EsSalud has raised $229.4m through the sale of 2029 bonds. Utilizing a structure similar to IIRSA’s 2008 road construction financing, the Peru Payroll Deduction special purpose vehicle has issued a zero-coupon bond, which ultimately provides investors with a return equivalent to a 5.5% yield, in line with 5.5%-area guidance. Investors were heard putting in for about $500m in orders, with buyers coming 33% from LatAm, 33% from the US and 33% from Europe. The transaction is backed by certificates, known as “retribucion por inversiones – certificado de avance de obras” (RPI-CAOs), to receive payments from EsSauld related to the construction and equipment provision of 2 hospitals and 2 medical distribution centers in Lima. The RPI-CAOs provide future cash flows in aggregate of approximately $230m. The certificates are purchased by the special entity, with the expected proceeds of $150m at the present value discounted at 5.5%, reflecting a price of 63.72. The payments are guaranteed by the future flows of mandatory deductions made by EsSalud from the payrolls of Peruvian workers. “There are not that many opportunities to use this type of structure, as it requires receivables for government-backed payments in dollars,” says a banker close to the deal. Bank of America Merrill Lynch managed the RegS-only sale, rated BB+/BBB minus. It was a mixed day for structured deals in LatAm, with Global Bank having to postpone a $200m covered bond sale.
Category: Bonds
Unifin Prices MXP ABS
Mexico’s Unifin Financiera has raised MXP1bn ($77m) in asset-backed bonds in the domestic market. The 2017 floater priced at TIIE+160bp, inside of 165bp price talk. The bonds are backed by credit receivables for automobile and equipment contracts. Ixe led the transaction, rated AAA on a national scale. Unifin previously raised MXP800m through a 2016 ABS in November, pricing at the TIIE+165bp.
Unifin Set for Bond
Mexico’s Unifin Financiera is scheduled to issue up to MXP1bn ($76m) in domestic asset-backed bonds today. The 2017 floating-rate bonds are backed by credit receivables for automobile and equipment leasing contracts. Ixe is leading the transaction, rated AAA on a national scale. Unifin last raised MXP800m through a 2016 ABS in November, pricing at the TIIE+165bp.
Banrisul Shows DPR
Brazil’s Banrisul has been meeting investors this week to market a diversified payment rights (DPR) securitization of up to $150m, according to investors. The bond is to have a 5-7 year tenor and be backed by payment rights from export receivables. Credit Agricole and BCP are managing the deal. The timing was unclear. DPRs have been a common tool for LatAm banks, though the deals in the last few years have tended to be private deals with one or two buyers, rather than widely marketed.
Bladex Switches CEOs
Bladex CEO Jaime Rivera has resigned, the bank says. Chief commercial officer Rubens Amaral will replace Rivera when he steps down July 31. Amaral has been with the bank since 2004. Rivera, who steps down to “to pursue personal interests,” will remain with the bank on its advisory board.
Covered Bond Talks Price
Panama’s Global Bank is out with 5.00%-5.25% yield guidance as it prepares to price a $200m 5-year covered bond as soon as today. Some investors are taking a look at Central American and Andean bank paper as comps for LatAm’s debut in the asset class. “This is 40bp-60bps back of some of the other Central American [and] Andean bank comps, which is where it should be given it is a number four bank in a smaller market than BCP, BBVA Continental [or] Banco de Bogota,” says a West Coast portfolio manager looking at the trade. Other investors, though, expecting the deal to gain traction and do well, have decided to opt out because of size. “At 5.00%-5.25% guidance the deal is cheap, but a lot are staying away because the size is too small,” says a senior portfolio manager. Deutsche Bank is managing with HSBC as co-manager. The transaction is rated Baa3/BBB minus, above Global’s Ba1/BB+ default rating.
ICE Looks to Retap 2021s
Costa Rica’s Instituto Costarricense de Electricidad (ICE) plans to reopen its 6.95% 2021 bonds, as soon as today. The 100% state-owned integrated electricity provider and telecommunications operator is looking to add up to $250m through the retap. Proceeds from the proposed reopening will be used to fund Grupo ICE’s capital investment plan, says Fitch, which assigns a BB+ rating. Citi and Deutsche Bank are managing the retap, as they did the original sale in November. The Baa3/BB+ bond priced to yield 6.95%, and was the issuer’s first cross-border deal since 2004.
Peru Insurer Nears Structured Deal
Peruvian government-backed health service EsSalud is scheduled to price a $230m 2029 structured finance transaction today, after books went subject Wednesday. “The book is well oversubscribed with some large orders and good accounts participating,” says a person familiar with the sale, noting that Peruvian investors are expected to comprise half of the deal. The zero-coupon bond, issued through the Peru Payroll Deduction Finance special purpose vehicle, will help fund construction projects, using a structure similar to that which Preuvian road operator IIRSA used in 2008. The deal is backed by certificates to receive payments from EsSauld related to the construction and equipment provision of 2 hospitals and 2 medical distribution centers in Lima. The certificates provide future cash flows in aggregate of approximately $230m. The certificates will be purchased by the special entity, with the expected proceeds of $150m at the present value discounted at a yield to be determined at pricing. Guidance for this yield has been set at 5.5%-area. The payments are guaranteed by the future flows of mandatory deductions from the payrolls of Peruvian workers made by EsSalud. Bank of America Merrill Lynch is managing the sale, rated BBB minus.
Ampla Advances Debentures
Brazil’s Ampla Energia e Servicos has approved the sale of BRL400m ($213m) in local debentures, it says. The energy company’s issuance is expected to include a 2017 tranche paying the DI plus up to 1.18%, and an inflation-linked 2019 tranche paying a fixed rate of at least 6.9%, but not exceeding a rate equal to the 2020 NTN-B bond at the time of pricing plus 1.50%. The exact amount of each tranche remains to be determined. Ampla is raising funds to repay short-term debt. Bradesco and HSBC are managing the sale, done under the 476 restricted format.
Chilean Retailer Eyes Issue
SMU has been authorized to issue up to UF2m ($94m) in 5-year bonds, with an interest rate of 5.20%, according to regulatory filings. The Chilean retail company has hired EuroAmerica as bookrunner on the issue, rated A/A minus on a national scale. SMU’s operations include the Supermercados Unimarc chain, and it claims approximately 20.6% market share in Chile’s supermarket sector. In 2011, SMU issued UF5m in its first bond in the domestic market. A UF2m 3.40% 2016 tranche priced to yield 3.62%. A UF3m 3.80% 2033 tranche priced to yield 3.97%. Celfin and Santander managed that transaction.