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.
Category: Bonds
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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.
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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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Ceagro Eyes Intl Bond
Brazil’s Ceagro Agricola could consider another bond transaction in the international markets as soon as next year, CEO Antonio Carlos Goncalves tells LatinFinance. “While we don’t have an issue date yet, future bonds will be used for working capital purposes,” he says. Goncalves has expressed interest in receiving proposals from investment banks at the start of 2012. In October last year, Ceagro raised $100m by offering international investors a rare double-digit yield from a Brazilian credit in a sector still underrepresented in the bond market. The commodities broker’s B/B minus 2016 bond priced at 98.965 with a 10.750% coupon to yield 11%. Ceagro’s main business involves supplying growers with fertilizer in exchange for contracts for future delivery of products, mostly corn and soy, and then selling products on. Jeffries managed its last bond sale. Recently, Fitch raised Ceagro’s rating to B from B minus. The agency cites the agricultural services company’s strong position in the sector, improving operating margins, and below expected leverage thanks to stronger cash flow generation. It expects Ceagro’s volumes and margins will remain significantly higher than their historical levels as a result of an improved ability to source grains and negotiate prices with suppliers of transportation and fertilizers.
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Cresud Crosses Finish Line
Argentina’s Cresud priced its 3-year bonds in line with 7.5% guidance Friday generating a comfortable book size that met its needs. The $60m deal was priced at par and gave investors a 7.5% coupon and yield. Participating investors consisted of private banking clients, mostly from LatAm. The agribusiness and real estate company met fixed-income investors in Buenos Aires and Santiago, Chile making only one stop in Switzerland. Settlement falls on September 7. Cresud is involved in farming and livestock production as well as dairy operations. Proceeds will be used to refinance existing debt. As of March 31, the company had $167m in standalone debt of which 50% was short-term. The bonds have a B rating from Fitch.
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Debt Issuers Line Up in Uncertain Market
Some borrowers have been trying to get an early start ahead of a busy September, but the Tuesday morning after Labor Day may be a tough one if the performance of European equity markets is anything to go by. Further worries about European peripheral debt ignited a selloff in the equity markets Monday, which doesn’t bode well for the US open this morning. The spike in risk aversion is likely to hurt any junk names seeking to issue bonds, but could work in favor of high-grade credits, especially if a flight-to-safety bid keeps UST low. So far three credits have already announced fixed-income investor meetings and bankers say there is at least $5bn-$7bn in the pipeline for this month. Odebrecht, Brasil Telecom, and Banco de Credito del Peru have each started or are about to begin road shows. Brasil Telecom, a unit of Telemar, is looking to test investor appetite for a global BRL-denominated bond, while Mexico ended Japanese investor meetings last week with an eye towards issuing in Yen. Corporates including Colombian utility Empresa de Energia de Bogota, Brazilian electricity company Eletrobras, Peruvian development bank Cofide, and Argentine credit card company Tarjeta Naranja, have all mandated banks and could also be stepping forth as soon as this month. Borrowers that have postponed issuance in the previous months, like Argentina’s YPF, may also make a comeback if market conditions permit. While 10-year UST yields around 2% make issuance attractive, if risks escalate and massive selloff occurs in the broader markets, the September pipeline could be moved to December, investors say.
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EPM Telecom Eyes Local Bond
UNE EPM Telecomunicaciones, the telecom unit of Colombia’s Empresas Publicas de Medellin, is aiming to raise COP300bn ($168m) in the domestic bond markets in the fourth quarter. The issuer is to choose among maturities of 1-15 years, set to the DTF, IBR and IPC rates. Correval is managing the sale, rated AAA on a national scale.
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Lojas Americanas Gets BNDES Cash
Brazilian retailer Lojas Americanas has agreed to sell BRL293m ($178m) in 2017 convertible debentures to government development bank BNDES. The bonds to be purchased by the BNDESPar unit pay a fixed rate of 13.15%, and are convertible at a BRL19.25 per share price at any time. Americanas has also taken out a BRL442m credit line with BNDES. The retailer plans to use the new funds for its organic expansion plan.
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MBono Syndicated Auction Set for Wednesday
Mexico has scheduled its MXP25bn ($2bn) MBono auction for Wednesday. The 2031 bonds come with a coupon of 7.20%. The government began selling some of its domestic bonds through this type of larger syndicated sale in 2010 with the aim of allowing a large offering 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.