Bankers are heard pitching Peru to reopen its 2050 bonds, in a move that could lock in historically low yields much like Mexico did in its August century bond retap, according to market participants. Investors say there is demand for yield and duration, making it sensible for Peru to retap the 2050s. A recent upgrade to BBB from BBB minus by S&P, may have also brought the sovereign one step closer to issuing debt in the international markets. While it is expected the sovereign will favor a local-currency trade, in July it filed to issue up to $5bn in new debt securities with the SEC. It remains to be seen what the sovereign would decide in terms of size, tenor and timing if it opts to issue in the dollar market, bankers say. “With low USTs both a retap and a new 10-year would work,” notes a DCM banker. The republic originally sold $1bn in the 2050s last year, along with $1.5bn-equivalent in retapped sol-denominated 2020s. As of Friday afternoon Peru’s 2050s were quoted at 106.75 or at 5.29% on a yield basis.
Category: Bonds
Chileans Hold on Local Offerings
Poor market conditions have forced Chilean borrowers Grupo Saesa and Entel to delay local bond transaction that had been set to price on Thursday. Saesa is now aiming to issue a UF2m ($94m) bond next week if conditions allow, according to bankers on the sale. The electricity holdco had been 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. Less is known about the fate of Entel, which elected not to price up to UF5m ($235m) in domestic bonds on Thursday, say market participants. No rescheduling has been announced, they add. 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.
Copec Plots Domestic Bond
Chilean fuel and forestry conglomerate Empresas Copec plans to raise up to UF1.5m ($71m) through the issuance of 2021 bonds in the local market. It will chose among two series, a UF-denominated tranche with a 3.25% coupon and a CLP-denominated tranche paying 6.25%. Timing has yet to be announced, but a company official says the deal could take place as soon as next week. Santander is managing.
Cresud Poised to Price as Book Grows
Cresud’s book size was heard north of $50m Thursday afternoon, nearly covering the total $60m amount sought in the international markets by the Argentine agribusiness company. The RegS only 2014 bonds are expected to price today if market conditions permit. The agribusiness and real estate company wrapped up roadshows Thursday in Santiago, Chile after keeping official guidance in line with whispers at 7.5% area. Cresud is raising funds to refinance its debt. As of March 31, the company had $167m in standalone debt of which 50% is short-term. Itau is managing the sale, rated B.
Transelca Aims for October Pricing
Colombian power transmission firm Transelca plans to sell COP180bn ($100m) in domestic bonds in October, says a company official. The unit of ISA will select from among 7-15 year maturities that will be priced either over inflation or the DTF benchmark rate. Proceeds are marked for debt management and for working capital. Correval, Bancolombia and BBVA are leading the sale, rated AAA on a national scale.
Bladex Closes Upsized Syndication
LatAm supranational bank Latinoamericano de Comercio Exterior (Bladex) has closed a $165m 3-year loan syndication, bringing a total of 9 banks into the transaction. The deal was upsized from an original $150m target after margins were set at Libor+110bp. Leads were heard offering 90bp fees for tickets of $15m or more, 75bp for tickets of between $10m-$14m and 60bp for tickets of between $5m-$9m. Mizuho and Chang Hwa Commercial Bank jointly arranged the facility, with the former acting as bookrunner and the latter as MLA. BBVA and First Commercial Bank later came in as MLAs, Bank of Taiwan and the Export Import Bank of the Republic of China as arrangers, with Land Bank of Taiwan, Mega International Commercial Bank and Hua Nan participating as senior managers. Proceeds are going toward refinancing existing facilities taken out in 2009.
AMX Moves Ahead of September Rush
Mexico’s America Movil (AMX) emerged Wednesday with a $2bn 5-year bond and a $750m retap of its 2040s a week ahead of an anticipated September rush. The $2bn 2016 bonds priced at 99.188 with a 2.375% coupon to yield 2.549% or UST+158bp, locking in what leads described as the second lowest coupon ever achieved by a telecommunications company. AMX’s 6.125% 2040 retap priced at 108.916 giving investors a 5.502% yield or UST+190bp. The 2016s and the 2040s were trading at T+155bp and T+184bp in the grey late Wednesday. The new 5-year was seen coming with a 20bp new issue premium and was compared against AT&T and Verizon’s 2016s, which were trading at UST+125bp and UST+120bp, respectively. Starting with UST+170bp whispers and then tightening guidance to 160bp-165bp over, leads Bank of America Merrill Lynch and JP Morgan were able to build an impressive $6.25bn for the 5-year and print with a $2bn size. “AMX’s bonds were cheaply priced,” notes a participating portfolio manager. “AMX is a cash machine, has good ratings and priced at levels to get the deal done today,” Proceeds will be used to finance capex and part of AMX’s up to MXP76.34bn ($6.12bn) buyback of Telmex. Leads closed the book early Wednesday to the tune of $6.25bn for the 5-year, while demand reached just shy of $2bn for the reopening. “EM inflows have been very strong which means people have a lot of cash to put to work,” notes another investor. AMX is rated A/A minus/A2.
Cresud Looks for mid-7s
Cresud is out with official guidance of 7.5% area for a new $60m 3-year RegS-only bond, falling in line with earlier mid-7% whispers. The Argentine agribusiness and real estate company is to wrap up fixed-income investor meetings in Santiago, Chile today, with pricing expected today or tomorrow. Cresud may have some name recognition, but it remains to be seen if a single B credit can price in a market that is less than receptive to high-yield names. Cresud is raising funds to refinance its debt and for general corporate purposes. Itau is sole lead on the sale. Cresud has a presence in Argentina, Brazil, Bolivia and Paraguay, and also has a 57.49% stake in IRSA, a commercial real estate firm. In July 2010, IRSA issued a $150m 11.5% 2020 to yield 11.875%. Leads on that issue were Citi, Itau and Santander.
Odebrecht to Meet Fixed Income Accounts
Brazil’s Construtora Norberto Odebrecht plans to meet fixed income investors starting Monday via Credit Suisse, Deutsche Bank, and Goldman Sachs. The Baa3/BB+/BBB minus issuer starts in London, before heading to New York and Chicago on Tuesday and wrapping up in Boston and Los Angeles on Wednesday. Currency, size and tenor for a potential bond offering have not been disclosed. Odebrecht last visited the dollar market in March, when it issued $500m in 2023 bonds via BAML and HSBC.
Panama Politics Challenge Growth Story
Despite strong economic performance Panama could continue to underperform due to political troubles, analysts say. This was highlighted by the row that may see the departure of Finance Minister Alberto Vallarino. Vallarino and other cabinet members have threatened to quit over the firing of the country’s foreign minister. Juan Carlos Varela, who also holds the position of vice president, was fired as foreign minister after the President accused him of dedicating too much time to his plan to run for president in 2014. Vallarino, Varela, and the others who threatened to quit are from the Panamenista party, a junior coalition partner with the President’s party. “With the latest political news, we think Panama is likely to continue underperforming its high grade peers,” Nomura says, noting it had been expecting a convergence to neutral. Citi, however, says these political events should not have a significant short-term effect on asset prices.