Anhanguera Educacional Partipacoes has completed a BRL400m ($209m) transaction in the Brazilian domestic bond market. Coming off the announcement of a BRL510m acquisition last month, the secondary education company has clinched a 2018 bond that pays the DI+1.95%, and amortizes twice yearly beginning 2015. Itau managed the sale, done under the Rule 476 restricted format. Previous local bond issuance and a December BRL734m equity follow-on have helped fill Anhanguera’s acquisition war chest thus far. But the recent purchase of Uniban – one of the few big university players left in the market – was larger than Anhanguera’s typical sub-BRL100m buys and may mean that the company will need to replenish its funding pool. The issuer also has a BRL200m bond maturity next year.
Category: Bonds
Arca Continental Poised to Issue MXP
Arca Continental plans to issue up to MXP3bn ($214m) in the domestic market next week if market conditions permit, according to a banker on the deal. The Mexican bottler plans to issue a 5-year floating rate note and a 10-year fixed rate bond. BBVA Bancomer, Bank of America Merrill Lynch and HSBC are leads on the transaction, rated AAA on a local scale. The issuer last came to the Mexican domestic market in November 2010, when it priced a MXP3.5bn fixed and floating rate deal via HSBC.
BTG Hires ex-Barclays Banker
BTG Pactual has hired ex-Barclays banker Roger Jenkins as a managing partner, according to a bank official. Jenkins will serve on the Brazilian bank’s global management and investment committees, with responsibilities focused on identifying opportunities for investment and raising money. He left Barclays in 2009. Jenkins is well known for securing GBP7.3bn for Barclays from Middle East investors to help recapitalize the bank during the credit crisis.
Ideal Plans MXP Foray
Mexico’s Impulsora del Desarrollo y El Empleo en America Latina (Ideal) is preparing a domestic bond transaction. The Carlos Slim infrastructure vehicle is aiming for a MXP4bn ($288m) 2014 bond paying a spread over TIIE. The regulatory filings indicate an expected October 20 pricing. Inbursa is listed as the only lead at this point, though Slim companies usually add additional banks at a later date. The sale is not yet rated. Ideal had planned to raise MXP6.14bn in July through an equity follow-on via Banamex and Inbursa, but market conditions appear to have delayed this process, along with all other new issuance in the Mexican pipeline.
Mexico Moves to Contain Rise in Sub-national Debt
Mexico must enact measures to tame rising state and municipal short-term debt levels, say panelists at LatinFinance’s Infrastructure and Sub-Sovereign Summit in Mexico. This comes as the state of Coahuila this week closes negotiations with lenders to head off a default on short-term loans amounting to MXP34bn ($2.4bn) after only disclosing MXP8bn in debt. Coahuila’s situation underscores the need for greater transparency among Mexican states. Coahuila’s creditors have agreed to be paid back over a 20-year period through federal transfers and payroll taxes owed to the state. The new 20-year loan comes with a 2-year grace period and pays a spread of TIIE +275bp, says a person familiar with the negotiations. A settlement between the state and lenders is expected to conclude today, says Carlos Garza Ibarra head of coordination with federal entities at Mexico’s ministry of finance. Mexico’s congress is currently analyzing three initiatives presented to curb rising state and municipal short-term debt and to resolve discrepancies in financial reporting. “The debt reported by banks to Mexico’s CNBV differs from what states are reporting to the ministry of finance,” says a person familiar with the situation. “There needs to be more transparency and regular financial updates.” The states of Chihuahua, Tabasco, and Chiapas have also been highlighted as borrowers with similar discrepancies in their financial reporting, the person adds. “[Debt] hasn’t reached the levels seen in other LatAm countries, and there is still time to take a look at the situation now,” says Gerardo Carillo, director of public finance at Fitch Ratings Mexico. Mexico’s states long-term debt represents only 3.1% of GDP, jumping to MXP320bn from MXP200m. While such debt is still manageable, Mexican states face an adverse financial environment in the medium term as long as indebtedness continues to rise, the agency says.
Santiago Metro Defines Terms
Empresa de Transporte de Pasajeros Metro, Santiago’s subway operator, plans to sell up to UF5.2m ($218m) in domestic bonds as soon as the end of this week, following investors meetings. The 2032 pays a coupon of 3.75% and proceeds are destined for debt repayment. Santander is managing the sale, rated AA/AA minus on a national scale. The exact timing will depend on market conditions and regulatory approval, a banker on the deal says.
Soriana Plans Local Bond
Mexican retailer Soriana is preparing to sell up to MXP4bn ($297m) in domestic bonds. The 2014 notes would pay a spread to the TIIE, and the sale is expected to take place on October 26. Banamex, JPMorgan and Inbursa are managing the deal, which still remains to be rated.
AMX to Make Rounds in Europe
LatAm telecom giant America Movil (AMX) will kick off fixed-income investor meetings this week in Europe. It is thought that a deal could possibly emerge depending on market conditions. The borrower will be in London on Tuesday, in London and Edinburgh on Wednesday, in Paris and Amsterdam on Thursday and in Frankfurt on Friday. The investor circuit suggests that AMX may be eyeing another euro trade, though no details have been released. Bankers have been saying that markets are open for top names like AMX if they can pick the right window. They will also have to turn a blind eye to high new issue premiums and instead find comfort in the attractive yields being offered in a market where rates are still low. Both the high-grade euro and dollar markets have seen some activity of late, and other LatAm borrowers are heard to be eyeing euros as well, but the unpredictability of investor behavior makes execution particularly difficult. Friday’s sharp drop in equity prices was just another reminder of this. Borrowers clearly run the risk of sentiment suddenly turning against them once they have announced a deal. Still if any LatAm issuer can pull off such a trade it is the single A rated America Movil. It was last in the market in late August when it sold a $2bn 5-year bond and a $750m retap of its 2040s a week ahead of a September rush that never happened. The company most recently tapped European investors in late August via Credit Suisse, with a CHF270m ($350m) 2016 that came at a reoffer price of 99.775 to yield 2.039%, or mid-swaps plus 86bp. On this occasion, Deutsche Bank is taking the telecom on the road next week. The same bank, along with HSBC and BNP Paribas, brought AMX to the European markets in June 2010 with EUR/GDP bond transactions. At that time, it priced a EUR1bn 2017 at 99.276, with a 3.750% coupon, to yield 3.870%, or mid-swaps plus 135bp, as well as a EUR750m 2022 at 98.902, with a 4.75% coupon, to yield 4.873%, or mid-swaps plus 175bp.It also raised G
BCI Plans Domestic Issue
Chilean bank BCI has filed a program to sell up to UF10m ($420m) in domestic bonds. The 5 and 10-year notes would both have a coupon of 2.6%. An official at the bank says it has not been determined when a sale could take place. BCI will self-lead the deal, rated AA+ on a national scale.
EM Debt Funds See Record Outflow
EM bond funds saw outflows continue during the week ended September 28, shedding a record $3.19bn, according to EPFR. The funds lost 0.37% in value in the week ended September 29, according to Lipper, pushing them to a year-to-date loss of 1.16%. Global income funds lost 0.63%, but are still up 2.72% ytd. International income funds dipped 0.20% in the week, but are up 3.55% ytd.