Peruvian beverage company Ajegroup is planning to meet investors on 3 continents ahead of a possible dollar bond sale that would mark its debut in the international markets. The transaction is expected to raise up to $300m with a potential tenor of 7 or 10 years, according to Fitch, which assigns a BB+ rating. Aje is scheduled to start Thursday in London, Hong Kong and Bogota, followed by visits to Zurich, Geneva, Singapore, Santiago, New York, Los Angeles, and Miami, before wrapping up in Boston and Lima May 8. The sale is to be done through the Ajecorp finance subsidiary of Grupo Embotelladora Atic, a holdco for the Ananos family which controls Aje. The notes will be unconditionally guaranteed by Atic and some of its subsidiaries, Fitch says. The deal would raise funds to repay a $100m unsecured loan with Rabobank, a $38.6m secured credit facility with Interbank and other debts. Bank of America Merrill Lynch, Interbank, Jefferies and Rabobank are managing the process. Aje produces and distributes soft drinks including the Big Cola brand, as well as juices, bottled water and other beverages throughout Latin America and Thailand. It would follow compatriot BB+/BBB minus Peruvian Coca-Cola bottler Corporacion Lindley, who raised a $320m 10-year bond last year, getting a 6.75% yield.
Category: Bonds
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.
Buyside Challenged to Price Covered Bond Debut
Global Bank is set to price what would be the region’s first covered bond as soon as Wednesday, though investors find it tricky to find the appropriate pricing level for the debut. The Panamanian bank was scheduled to finish a roadshow Monday, and the buyside reported no solid price indications yet for the deal of up to $200m, at a 5-7-year tenor with a legal maturity of 30 years. “Interesting deal, but a shot in the dark in terms of pricing,” says a senior portfolio manager who sees the transaction as nice exposure to Panama and expects at least a 300bp pickup over the Panamanian sovereign. The investor will look at Panama’s 2015s, which have been trading at a spread of 70bp mid-market as of Monday afternoon. “No whispers, but [the] bond is expected to come below borrowing costs of collateral,” says a West Coast EM portfolio manager. The investor plans to comp Global Bank against other Baa3/BBB minus bank names, taking into consideration the country, market position and size. From the issuer’s perspective, investment grade pricing, diversification of funding, and access to different types of maturities is reason enough to tap the asset class. The asset has been talked about in several markets, and countries including Mexico are working on legislation. Panama, however, has the necessary contractual law for the transfer of assets to a guaranteed trust despite not having a specific covered bond law like many European jurisdictions. Global Bank’s bonds will be backed by a cover pool of residential mortgages denominated in USD and located in Panama, with covered bondholders having priority claim on those assets. Investors will enjoy a dual recourse – a first recourse to Global Bank and subsidiaries, and second recourse to the portfolio of mortgages transferred to the guarantee trust in an event of default. “This has proven to be a very stable asset class because of dual payment,” says a credit analyst. In addition, the monetary value of the mortgages is higher than the
Peruvian Insurer Seeks Structured Deal
Peruvian government-backed health service EsSalud is seeking an up to $230m 2029 structured finance transaction to fund construction projects. The Peru Payroll Deduction Finance special purpose vehicle plans a zero-coupon bond that follows a similar structure to that used by road operator IIRSA 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 – the present value discounted at a yield to be determined at pricing. Guidance for this yield is out this week at 5.5%-area. The payments are guaranteed by the future flows of mandatory deductions from the payrolls of Peruvian workers made by EsSalud. Pricing is expected this week, following investor meetings last week. Bank of America Merrill Lynch is managing the sale, rated BBB minus.
A Roaring Start
Following record-breaking issuance in the first few months of the year, March continued to see a healthy amount of issuance from both investment grade and high-yield names. LatAm credits issued […]
Fixed in Place?
Mexicans are optimistic about a rebound in the domestic securitization market. However, several challenges remain and volumes still lag peak pre-crisis levels.
Living with Uncertainty
The region’s public credit managers have addressed funding needs early on this year ahead of uncertainties. The market tone has improved since January, but risks remain.
Smooth Sailing Ahead?
Positive sentiment returns and investors should be spoiled for choice. With uncertainties ahead, however, selectivity is the message from top bond managers.
Up and Coming
Investors have long hungered for new assets in the rapidly growing Andean countries. Issuers from Colombia and Peru have started to offer more to the capital markets.