Citi is leading the regional DCM league tables as August nears its close, heading into what is traditionally the busiest month of the year for new issuance. The US bank booked $9.35bn in volume from 42 transactions year to August 26, according to Dealogic. HSBC comes in second with $8.50bn from 57 deals. Total volume is up this year, at $91.95bn from 224 transactions. That compares to $77.21bn from 166 deals in the same period in 2010. Citi finds itself in third place in terms of fees, at $26m, behind JPMorgan ($29m) and Credit Suisse ($27m). It also tops the loans tables, with $1.92bn from 10 deals, ahead of BBVA’s $1.85bn from 9 transactions. On the equity side, Itau leads the table with $3.16bn in volume from 24 deals, beating fellow Brazilian BTG Pactual’s $2.06bn from 12. The pair also lead the fee ranking for equity, with Itau booking $78m and BTG $60m.
Category: Bonds
Cresud Takes to the Road
Itau is taking Argentina’s Cresud to meet fixed-income investors next week amid expectations that the company could try to place a small $60m 3-year RegS issue if market condition are right. The borrower will be in Buenos Aires on Tuesday, and in Switzerland on Wednesday before wrapping up meetings in Santiago on Thursday. The agribusiness and real estate company has a presence in Brazil, Bolivia, and Paraguay. The company has a 57.49% stake in Argentine real-estate firm IRSA, which in July 2010 issued a new $150m 144A/RegS 2020 that was priced at 97.840 with an 11.5% coupon to yield 11.875%. Leads on that issue were Citi, Itau and Santander. In February Fitch upgraded IRSA to BB minus from B+, and more recently assigned a B rating to Cresud’s upcoming bond. Cresud derives its revenues from several areas of business including the sale of crops, milk and live beef cattle, the leasing of farms and a commodity brokerage business. According to Fitch, dividend flows from IRSA to Cresud have been stable, and amounted to $17m in November 2010. “IRSA represents approximately 85% of Cresud’s consolidated Ebitda and 77% of consolidated assets,” it says. Proceeds from the new issue will go toward extending the average life of Cresud’s debt.
GS Heads M&A Race
Goldman Sachs stood at the top of the regional M&A volume tables year to August 26. The bank has booked $19.61bn in volume ytd from 22 deals, beating Brazil’s Itau which claims $19.33bn under its belt from 30 transactions, according to Dealogic. The positions represent a sharp improvement from this point in 2010, when neither bank figured in the top 10. Overall volume is down compared to the corresponding period last year, falling to $100.10bn from $154.88bn, but the number of transactions has risen to 1,055 from 957. Credit Suisse, last year’s leader heading into September, now stands in third place, but it tops in the M&A revenue ytd ranking, with $62m, or 25% of the pool. JPMorgan follows with $35m, while Itau is third with $30m and Goldman fourth with $21m.
Local Currency Keeps Bucking Outflow Trend
EM bond funds lost $543m for the week ending August 24, but local currency funds continue to be seen as a safe haven play after receiving $285.m in inflows over the same period, according to fund data company EPFR Global. In terms of performance, EM fixed-income funds’ lost 0.51% for the week ending August 25, according to Lipper, paring ytd gains to 4.97%. Meanwhile, global-income funds lost 0.76% for the week, to yield 4.76% ytd. International income funds were down 0.70%, bringing the ytd return to 7.10%.
Daycoval Readies Bank Bonds
Banco Daycoval is preparing to raise BRL200m ($125m) in Brazil’s domestic markets through Letras Financeiras, special bonds designed for bank financing. The mid-sized bank expects to road show and place the 2-year notes next week, according to an official. The interest rate is to be determined during bookbuilding and has been capped at 115% of the DI rate. BTG Pactual and Itau are managing the sale, rated Aa1 on a national scale and done under a BRL1bn program.
Entel Preps Domestic Bond
Chilean telecom Entel is set to sell UF5m ($235m) in domestic bonds Thursday of next week. The issuer may chose 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. The exact amounts and the yields are to be determined at the time of sale. Bice and IMTrust are managing the sale, currently on the road and rated AA minus on a national scale.
Finandina Places Domestic Debt
Colombia’s Banco Finandina has sold COP72bn ($40m) in domestic bonds, after garnering some COP97bn in demand. A COP41bn 2013 tranche pays the IBR+2.09%, a COP12bn 2014 piece pays IBR+2.50%, and a COP19bn 2016 inflation-linked portion pays 4.20%. Corredores Asociados led the sale, rated AA+ on a national scale.
Goldman to Issue Europeso
Goldman Sachs plans to issue up to MXP1bn ($80m) in floating rate Europeso bonds with talk heard in the TIIE plus 90-100bp range. The 3-year RegS only transaction is scheduled for the first week of September and will be listed on the Luxembourg Stock Exchange. The trade is being compared against Nissan Mexico’s MXP2.5bn 3-year, Banco de Credito e Inversiones’s (BCI) MXP2bn 3-year and BNP Paribas’s MXP2bn 5-year. Those bonds were priced anywhere between 40bp-50bp over TIIE, making the Goldman Sachs issue look cheap. But according to a banker watching the trade, this deal is coming wider to compensate for risk perception given that Goldman Sachs’s 5-year CDS is trading at 250bp versus 157bp for Mexican sovereign protection. Still from Goldman Sachs’ perspective, funding costs are still attractive as the notes are expected to be swapped back at Libor+180bp, he adds. The bonds are rated A1/A/A+ on a global scale.
Mexichem Price Talk Heard
Price talk on Mexichem’s 5-year floating rate local bond is being heard at 50bp over TIIE. The Mexican chemical conglomerate will issue up to MXP2.5bn ($199m) in 2016 bonds early September to repay bridge loans used to take out MXP2.5bn in 2014 bonds. Leads are Banamex, BBVA Bancomer, HSBC and IXE. This comes as the company prepares to close a $1bn 3-year revolver via Bank of America, BBVA, Citigroup, HSBC and Santander. Pricing on the loan is tied to a ratings grid offering L+90bp out of the box for utilization of less than 33%, 95bp for utilization of between 33%-67% and 100bp for over 67%. Spreads tighten or widen by 20bp for each ratings notch above or below BBB-. Mexichem is rated AA/Aa3 on a national scale, and carries a BBB minus rating for foreign currency issues.
Santander’s Barbosa Goes to Abril
Fabio Barbosa, who announced his departure from Santander Brasil earlier this week, will become CEO of media conglomerate Grupo Abril. Barbosa is set to leave his current position as chairman of Santander Brasil September 22, and will assume his new role on September 26 at the publisher of numerous media titles, including Veja and Playboy Brazil. Current Abril CEO Giancarlo Civita, a member of the controlling family, will stay on the board. Barbosa had quit his role as CEO of Santander at the beginning of the year and was replaced by Marcial Angel Portela.