Real estate developer Tecnisa has sold BRL250m ($147m) in bonds in Brazil’s domestic market. A BRL110.5m 2015 tranche pays the DI+2.25%, and amortizes equally in years 3 and 4. A BRL106.2m 2016 tranche pays the DI+2.40%, and amortizes in equal parts in years 3, 4 and 5. Finally, a BRL33.3m 2017 inflation linked portion pays 7.73%, and amortizes in two equal parts in years 5 and 6. Itau managed the sale, done under the rule 476 restricted format. Tecnisa is raising funds to improve its debt profile and provide working capital. The homebuilder is rated A minus on a national scale.
Category: Bonds
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Banco Falabella Set to Kick off Chile Bond Spree
Banco Falabella has concluded investor meetings in Chile, Peru and Colombia, and is looking to sell up to UF5m ($215m) in bonds in the Chilean market Wednesday, the first of what could be a string of debt sales in that country. Indeed, in contrast to international bond markets, domestic funding sources in Chile, Colombia and Mexico are increasingly being tapped by corporate borrowers. The lending arm of the Andean retailer is eyeing 21-year bonds paying a 3.85% coupon and amortizing in the final 5 years, and 7-year bonds paying 3.40% and amortizing in years 5, 6 and 7. IMTrust is managing the sale rated AA/AA minus on a national scale. Quinenco’s LQ Inversiones Financieras also wants to issue as soon as next week, and Santiago’s Metro is expected to follow.
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Brazilian Gunsmith Raises Local Debt
Forjas Tauras, a southern Brazil-based manufacturer of arms and other metal products, has raised BRL50m ($29m) in the local bond market. The 2016 bonds pay the DI+2.8% and amortize quarterly beginning in 2013. BTG managed the sale, done under the rule 476 restricted format.
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Daimler Issues MXP Floater
Daimler has priced a MXP1bn ($73m) 3-year bond at TIIE+50bp, according to banker on the deal. The car manufacturer saw demand reach 1.4x and pricing come in line with talk of TIIE + 40-50bp.The notes come with a guarantee from the company’s German parent. BBVA Bancomer and Santander managed the sale, rated AAA on a national scale. Daimler last came to market in April, when it priced a MXP500m 3-year bond at TIIE+34bp through Santander, following 1.4x in demand.
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Ford Credit Sells MXP Bond
Ford Credit de Mexico has sold MXP 1bn ($74m) in domestic floating-rate bonds, marking the company’s first local transaction since 2007. The 1.5-year deal priced at TIIE + 95bp, 5bp inside TIIE+100bp-area guidance. Demand reached 2.1x, according to a banker on the sale. Actinver, HSBC, IXE, Scotia Capital managed the deal, rated A2 on a national scale.
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Plural Eyes International Move
Brazil’s Plural Capital plans to seek broker-dealer status in the US next year, according to a person familiar with the matter. This is the latest in a string of moves that suggest the Brazilian financial firm plans to broaden its business model. The hiring of ex-BTG Pactual partners Evandro Pereira and Pedro Guimaraes earlier this month was seen as an attempt to carve out a niche in investment banking. The hires follow news of last month’s agreement to acquire Banco Modal in a deal thought to be worth BRL130m ($80m). Plural was founded by a group including former BTG Pactual partners Rodolfo Riechert and Andre Schwartz.
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Premiums Prove Too Painful for Corporates
Wednesday’s late day selloff in commodity and stock prices may have deflated hopes that more stability in the international bond markets was on the cards. But bankers continue to encourage LatAm blue-chips to take a page out of US high-grade issuers’ book and leap through windows while they can. “We are talking to a bunch of issuers, and people want to do things, but no one has the courage to find out what the premium is,” says one senior DCM official. This stands in contrast to a handful of US and European investment-grade borrowers that wasted little time in pushing through deals on the back of the recent equity rally despite the threat of further volatility on the horizon. Spreads and new issue premiums may be higher, but yields remain low. According to one banker, new issue premiums in the US high-grade market have recently ranged between 25bp to 50bp, and LatAm names of similar credit quality could be expected to pay the same, though none have dared to test that theory. For now, the region’s price-sensitive CFOs can’t bring themselves to pay extra and are standing fast. “We have a lot of mandates that are literally in the freezer, and some of them are executable, but they are unlikely to be expedited because a lot of issuers can’t get their head around the new reality,” says one syndicate official. Still some bankers insist that if borrowers could see past the new issue premiums, they would realize that there are attractive coupons to be had. Bankers’ bluster or not, such argument may hold some truth, but handling execution and headline risk won’t be so easy. “High-grade names do have access, but it is more challenging,” says one senior DCM banker. “Spreads are wide but yields are ok. It is a day-by-day thing, and borrowers want to see more stability.” One banker took Pemex 2021s as an example of how yields have remained low despite spread widening. Those bonds may be trading at 285bp over UST, or some 100bp wider to where they were reopened in July, but they a
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Santander Mexico Sells Local Bond
Santander Mexico has raised MXP2.8bn ($206m) from a domestic 2016 bond that comes in line with guidance at TIIE+50bp, but smaller than the up to MX5bn size heard earlier. Santander self-led the deal, rated MxAAA.
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Santiago Metro Meets Buyside
Empresa de Transporte de Pasajeros Metro, Santiago’s subway operator, is meeting investors ahead of a likely deal at the end of next week or the early part of the week starting October 10. The exact timing and makeup of the sale will depend on conditions and timely regulatory approval, a banker on the deal says. The issuer is authorized to sell up to UF6.7m ($288m) in bonds with tenors of up to 30 years, and is said to be looking toward the longer end of that range in order to match its current debt refinancing needs. Santander is managing the sale, rated AA/AA minus on a national scale.
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UNE Close to COP Sale
UNE EPM Telecomunicaciones, the telecom unit of Colombia’s Empresas Publicas de Medellin, is targeting October 7 to raise COP300bn ($168m) in the domestic bond markets. In the first local bond sale to be done by a non-financial institution in several months, the issuer is set to chose among maturities of 1-15 years, paying a fixed-rate or spreads over the IBR, DTF or IPC. Correval is managing the sale, rated AAA on a national scale.