In an effort to keep its commitment of maintaining a regular presence in the international capital markets, Chile isn’t ruling out the possibility of more foreign bond forays in 2012 and 2013, said the country’s Finance Minister Felipe Larrain at a roundtable discussion with journalists Thursday following a $1.35bn equivalent USD and CLP issue the day before. “A 10-year is the bread and butter [and the most liquid] in this market but a 5-year and 30-year will not be ruled out,” he said. Last year, the sovereign landed a 3.89% coupon, which at the time was its lowest ever, but it beat that record on Wednesday with a 3.35% coupon on a new $1bn 10-year. Coming with an even lower coupon may be an attractive option, but Larrain hoped that the sovereign would fail in its attempts to squeeze pricing tighter as this “would mean that the world economy was in dire straits,” he added. Still, the sovereign has established an attractive pricing benchmark for its corporates to follow. “The Republic has set the benchmark and [Chilean] companies can now set terms over that benchmark,” he added. Wednesday’s issue was twice over subscribed and was led by HSBC and Deutsche Bank. Ratings were AAa3/A+/A+ (stable/positive/stable) (Moody’s/S&P/Fitch.
Category: Bonds
Ex-BTG Pair to Join Plural
Brazilian asset management firm Plural Capital has hired ex-BTG Pactual partners Evandro Pereira and Pedro Guimaraes, in a move that could be an attempt to carve out a niche in investment banking. A Plural spokesman confirms the hires, but declines to comment on the role they will play upon joining the firm, which has about BRL600m ($360m) under management. This comes after Plural agreed to buy competitor Banco Modal for an estimated BRL130m, and it is now rumored to be in talks to acquire local brokerage Flow Corretora. Pereira and Guimaraes are reunited with Rodolfo Riechert and Andre Schwartz, who founded Plural in 2009 after they left BTG. Guimaraes, a FIG investment banking specialist, and Pereira, an ECM specialist, left BTG last year.
HSBC Names Chile IB Head
HSBC has appointed Monica Duwe as head of global banking, Chile. The newly created role oversees products and services including M&A advisory, DCM, ECM, leverage and acquisition financing, and project and export finance. Duwe will be based in Santiago and report to Chile CEO Gustavo Costa and CEO of global banking for the Americas Gerardo Mato. She joins from BNP Chile, where she spent 7 years, most recently as Chile country manager.
Inbursa to Issue up to MXP6bn
Mexico’S Banco Inbursa plans to issue an up to MXP6bn ($479m) in the local markets through a 5-year floater on September 28. The bonds are rated mxAAA on a national scale, with proceeds going towards general corporate purposes. Inbursa and Bank of America Merrill Lynch will manage the transaction. The subsidiary of the billionaire Carlos Slim-controlled financial group last visited the domestic market in July, when it priced MXP4.9bn 2014 bonds at TIIE+20bp with Actinver, BAML, Inbursa, and Santander.
Copec May Reopen Chilean Market
Empresas Copec plans to sell a new domestic bond September 15, and with any luck could revive a local market hit by market volatility. The Chilean fuel and forestry conglomerate is now meeting investors targeting up to UF1.5m ($71m) in 2021 bonds, and is able to choose among a UF-denominated tranche with a 3.25% coupon and a CLP-denominated tranche paying 6.25%. IMTrust is managing the deal, rated AA on a national scale. Also expected by next week is a UF2m ($94m) deal from Grupo Saesa after it postponed its offering last week. The electricity holdco is eyeing 30-year bonds paying a coupon of 3.35% as it looks to refinance existing debt. BBVA Chile and IMTrust are managing the sale, rated AA on a national scale. Entel, which also wanted to go last week, has yet to determine when it will try again, but it can afford to wait, bankers say. The telecom had been looking to select among a 5-year CLP-denominated tranche paying a 6.1% coupon, a 5-year UF portion paying a 3.2% coupon and a 21-year tranche with a 3.5% coupon. Bice and IMTrust are managing the sale, rated AA minus on a national scale.
Mexichem Prices MXP Floater
Mexichem has issued a MXP 2.5bn ($199m) 5-year floater at TIIE+60bp, 10bps wide to preliminary guidance of TIEE + 50bp. However this is 10bp tight to OMA’s MXP1.3bn 5-year deal which priced at TIIE + 70 and 5bps inside of Gas Natural Mexico’s MXP4bn 4-year floater that came at TIIE + 65bp in May. The higher price from preliminary guidance was a result of volatility in the market, bankers say. The Mexican chemical conglomerate issued the MXP bonds to repay bridge loans used to take out MXP2.5bn in 2014 bonds. Leads on this transaction were Banamex, BBVA Bancomer, HSBC and IXE. Mexichem’s local issuance follows a $1bn 3-year revolver closed on September 1. The bonds have a mxAA rating from S&P and Fitch.
Mexico Raises MXP25bn in MBono Syndication
Mexico has sold MXP25bn ($2.01bn) in 2031 domestic bonds through a syndication process. The 7.20% MBono priced at 106.76, according to central bank data, which does not indicate a reoffer yield. The government began selling some of its domestic bonds through this type of larger syndicated sale in 2010 with the aim of selling a large benchmark transaction in one fell swoop rather than having to build outstanding size incrementally through a series of auctions. The bonds also qualify for inclusion in key indices and draw in a broader group of investors.
Banco Falabella Places COP Sale
Banco Falabella has raised COP150bn ($84m) in a local market bond sale. The Colombian credit unit of the Chilean retailer chose to issue COP70bn in 2013 bonds paying the IBR+2.13% and COP80bn in 2023 IPC-linked bonds paying 4.04%. Total demand topped COP194bn. BBVA, Corredores Asociados and Correval are managing the sale, rated AAA on a national scale. It is the latest in a series of issues from financial institutions. Leasing Bancolombia expected to follow next week, with a COP300bn-COP400bn sale.
BCP Heard Preferring a Tier 2 Trade
Banco de Credito del Peru (BCP) wrapped up investor meetings in Boston and New York Wednesday, and is leaning towards issuing a Tier 2 dollar bond, says an investor who attended the meetings. With BCP’s Tier 2 capital ratio at 17%, the bank is looking to issue a 10-year dollar bond of $300m or more to boost its Tier 2 capital ratio to 25%, he adds. Timing for the potential 144A/RegS issue could be as soon as this week if market conditions permit. BAML and Morgan Stanley took the Baa2/BBB rated bank through fixed-income investor meetings in Europe, the US and Latin America. BCP was last in the in the international markets in March, raising $700m in 2016s priced at 98.815 with 4.75% coupon to yield 4.792% or UST + 275bp. BAML and JP Morgan managed that sale.
BT Considers BRL1bn 7-year
Brasil Telecom (BT) was heard considering a BRL1bn ($604m) 7-year global as it wrapped up fixed-income investor meetings in Boston and New York Wednesday. A 5-year tenor is also a possibility. BAML, Citi, Deutsche Bank, HSBC, Itau and Morgan Stanley are leading the transaction, rated Baa2/BBB. The parent last tapped overseas investors in December 2010, when it pulled the trigger on a EUR750m 2017 bond that was priced at 98.828 with a 5.125% coupon to yield 5.33%. On that occasion HSBC, Santander, BB Securities and Espirito Santo Investment Bank acted as leads. Telemar has not issued an international bond through the Brasil Telecom unit since acquiring it in 2008. As part of a share structure reorganization expected to take effect by the end of the year, Telemar has decided to make Brasil Telecom the group’s sole traded share, changing its name to Oi, SA.