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.
Category: Bonds
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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.
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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.
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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.
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Chile Jumps through Window
Chile took advantage of a break in the clouds hanging over the markets to print Wednesday a $1.35bn equivalent retap and new issue, achieving a record low yield and coupon on the dollar tranche. “Great decision on timing, with the 10-year UST trading at 2.05%,” notes a London -based investor. Indeed, arguably timing couldn’t have been better. With UST yields hitting record lows over the last few weeks, seductively attractive funding costs had been dangling like a carrot in front of any high-grade issuer willing to take the execution risk. As Latin American’s top-rated sovereign, Chile was better qualified than most to step forth in what had been an extremely risk-averse-environment. After some market stability Tuesday, the sovereign announced late Wednesday morning it would issue a new USD 10-year and retap its 5.50% CLP denominated 2020s. An abrupt change in sentiment later in the day sparked a rally in the broader stock markets after reports that US President Barack Obama would announce a $300bn plus stimulus package and the German Supreme Court cut down appeals to prevent aid for peripheral European countries. By coming with whispers in the high 130bp area for a new benchmark 10-year, Chile looked attractive against lower-rated Brazil’s 2021s, which were being quoted at around 138bp over and should trade wide to the single A sovereign. In the end, the $1bn bond priced at 99.131 with a 3.25% coupon to yield 3.381% or 130bp over. The spread was wider than the 90bp achieved last year when the sovereign issued a USD 2020 but pricing came inside the 3.875% coupon and 3.89% yield seen on that trade. “Depending how tight Chile prices and we will be comfortable at a 130bp or 125bp spread. We will likely participate as it presents good value,” noted one London-based EM investor. The CLP retap was a slightly different story after coming at a smaller size than the $500m equivalent first heard in the morning. In the end, the sovereign came at a smaller-than-expected CLP162bn
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CABEI Brings Triple-Market Bond
The Central American Bank for Economic Integration (CABEI) has placed $67.6m 10-year bond into three Central American markets, marking the first time a borrower has simultaneously registered and sold debt in three of the isthmus’s countries. The 2021 bond priced at par and offered buyers in Panama Costa Rica and El Salvador a coupon that steps up from 2% to 3% after year two, to 4% in year five and to 6% in year seven. Yield to call and yield to maturity for the $67.6m bond came in at 2.6% and 4.3%, respectively. The bonds are callable after 4.5 years. The development bank issued $31.6m in Costa Rica, $22m in El Salvador and $14m in Panama. Local pension funds and banks were the main investors. The multilateral bank’s issuance represents the first time a bond has been simultaneously registered and sold in three local capital markets in the region. Citi led the transaction, rated AAA locally in Costa Rica and El Salvador. A local rating in Panama was not required.
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Compartamos Sets Pricing Sights
Mexico’s Banco Compartamos is heard talking in the TIIE+65-70bp range for a new 5-year floating rate domestic bond. The microlender wants to issue up to MXP2bn ($160m), with pricing expected on September 22. Bancomer, Banamex, and HSBC are leads on the transaction, rated AA on a national scale. Compartamos last visited the local bond market in October 2010 when it sold MXP1bn in 2015 bonds, paying TIIE+130bp.
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Daimler Preps MXP Bond
Car manufacturer Daimler Mexico is planning to issue up to MXP 1bn ($80m) in 3-year floating rate domestic bonds. The notes come with a guarantee from the Germany-based parent, and are expected to price September 29. Proceeds are to be used for refinancing debt and general corporate purposes. BBVA Bancomer and Santander are managing 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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S&P Raises Peru Banks
S&P has raised the ratings on four Peruvian banks following last week’s upgrade of the sovereign to BBB from BBB minus. The system’s three largest, Banco de Credito del Peru (BCP), BBVA Continental and Scotia Peru, were each lifted to BBB from BBB minus, with stable outlooks. The upgrade comes at a useful time for BCP, as it is finishing road shows this week for a possible cross-border bond, through Bank of America Merrill Lynch and Morgan Stanley. State-backed Corporacion Financiera de Desarrollo (Cofide), another with designs on a 144a deal before the end of the year, was also lifted to BBB.
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Unidas Plans Local Bond
Brazil’s Unidas is preparing to sell BRL500m ($315m) in 5-year domestic bonds. The rental car company will be able to choose from among a tranche paying the DI rate plus up to 2.96% and a fixed-rate tranche whose value adjusts with the IPCA inflation index. The amounts of each and the interest rates are to be determined during the bookbuilding process, scheduled for October 19-27. Unidas is rated A minus on a national scale. Banco do Brasil, Bradesco, BTG Pactual and Espirito Santo are managing the sale.