Brazilian freight transporter America Latina Logistica (ALL) has sold BRL360m in 2016 debentures in Brazil’s local market. The bonds pay the DI+1.65% and amortize equally in years 4 and 5. Itau managed the transaction, done under the rule 476 restricted format.
Category: Bonds
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Cemig’s Taesa Targets Global BRL
Cemig’s Transmissora do Atlantico de Energia Eletrica (Taesa) may mandate banks as soon as this week as it looks to raise BRL 1.3bn ($814m) in the international markets, preferably through a global BRL bond, says a company spokesperson. The Brazilian electrical transmission company is seeking BRL1.2bn to acquire a 50% stake in Spanish-owned Abengoa Brasil with funding due next month. Remaining proceeds will be used to extend its debt profile. In June, Spanish engineering company Abengoa announced its intention to sell a 50% stake in four transmission concessions and 100% of concession company NTE in Brazil for EUR485m in cash to Cemig. While Taesa is strongly leaning towards a Global BRL, it is also evaluating the market for a potential USD bond. Considered one of the largest electric power transmission companies in Brazil, Taesa was established in 2006 as a holding company under the name Terna Participacoes. The pending acquisition is expected to get approval by Brazil’s Cade within the next couple of months. Taesa last came to market in 2010 when it raised BRL600m through a 2-tranches debenture offering via Banco do Brasil, BTG Pactual, Citibank and HSBC. This came after the company had carried out an IPO on the Sao Paulo Stock Exchange in October 2006. Majority shareholders are Fundo de Investimentos em Participacoes Coliseu and Cemig, which hold 38.59% and 56.69% stakes respectively.
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BTG Takes Small Step toward IPO
BTG Pactual has filed to become an open company in Brazil, a move considered to be the first step in the IPO process. However, the Brazilian investment bank notes that the registry “does not indicate that an IPO is imminent.” CEO Andre Esteves told LatinFinance in February that the bank saw an IPO in the next 1-2 years. The firm had reportedly been considering a float last year, but it instead went to the private market. In December, it issued $1.8bn in new shares to a consortium including Asian and Middle East sovereign wealth funds.
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Ford on Schedule for MXP Bond
Mexico’s Ford Credit de Mexico is on track to issue up to MXP1bn ($ 81m) in floating rate bonds in the domestic market this month. The Mexico-based auto finance services company plans to issue 18 month notes that will pay a spread over TIIE. The subsidiary of Ford International will road show mid-September with expected pricing on September 23. This will be Ford’s first bond transaction in the local bond markets since 2007. Ford has mandated HSBC, Scotia Capital, Actinver, and IXE for the transaction. Moody’s Investors Service has assigned A2.mx to the proposed notes.
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Multiplan Readies Debentures
Brazil’s Multiplan is preparing a BRL300m ($188m) domestic bond transaction. The shopping mall developer and operator plans to issue 2016 bonds that will pay the DI plus up to 1.15%. Proceeds are earmarked for construction, acquisition or expansion of shopping centers, working capital, and for paying debt. Multiplan officials decline to name the managing bank on the deal, which is being done under the rule 476 restricted format.
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Chile Moves Closer To Foreign Foray
Chile is inching closer to tapping the international bond markets this year after sending request for proposals (RFPs) for a potential bond issue, bankers say. While details have yet to be disclosed, the sovereign has in the past expressed interest in a benchmark transaction with the idea of raising up to $1.5bn in the international capital markets in 2011. Earlier this year, Finance Minister Felipe Larrain was quoted saying that CLP or USD issues were on the table. Chile’s reluctance to return to market since its blowout dual-tranche issue last year was partly driven by fears that offshore offerings would put upward pressures on the peso. Where Chile will come along the curve or if it will try global pesos is still open to debate. Ignacio Briones, the country’s head of public credit, told LatinFinance in March that 5, 10 or 30-year bonds were all a possibility. The sovereign last came to market in 2010 when it priced a $1.5bn 2-tranche USD and global CLP-denominated 10-year bonds with Citi, HSBC and JPMorgan. The bonds were rated Aa3/A/A+. Briones said in March that the public credit’s principal goal was to achieve a tighter spread than the UST+90bp it locked in on its last 10-year. But spreads may be somewhat irrelevant this time around given how tight USTs have been trading and the sorts of yields borrowers can potentially lock in. The sovereign’s US dollar 10-year was first priced at 99.877 with a 3.875% coupon to yield 3.89%, but it is now trading at around 2.96% or 85bp over.
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Mexico to Meet Japanese Investors
Mexico is set to kick off non-deal roadshows in Japan as it eyes the possibility of tapping the Samurai market without a JBIC guarantee. Citigroup, Bank of Tokyo Mitsubishi and Nomura are taking the sovereign to meet Japanese accounts next week, but with so much uncertainty hanging over the markets it remains unclear whether the borrower will pull the trigger. The head of public credit Alejandro Diaz de Leon told LatinFinance earlier this month that the country intended to build a long-term relationship with this investor base and wants to be a frequent Samurai issuer. In October last year, it used a JBIC guarantee when it sold JPY150bn ($1.8bn) of 10-year yen-denominated bonds at a 1.51% yield, getting JPY300bn in demand. A deal without a JBIC guarantee has been a long-term goal of the government, but Japanese investors have so far been unwilling to take the leap. Whether they will this time is unclear in light of recent volatility. The country is directly exposed to any downturn in US economic growth, but in many ways it has a good story to tell. “Disciplined public finances along with low and stable inflation provide [Mexico] room to face external shocks,” Bank of America Merrill Lynch analysts say. This came as June retail sales were reported to be higher than expected, helping push the local bolsa up 1.38% on Monday Credit market s were also comparatively stable Monday, but investors are still awaiting a signals from the Fed as to what it might do next to stimulate growth and perhaps prevent the US economy from sinking back into recession. Fed Chairman Bernanke’s speech Friday is expected to provide some clues.
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EM Local Currency Funds Buck Trend
EM bond funds may have lost $373m for the week ending August 17, but EM local currency bond funds received $273m, according to fund data company EPFR Global. This makes local currency funds one of the few fixed-income classes to see gains.
“EM local currency bond funds continue to demonstrate safe-haven status in this market crisis, and we are increasingly convinced that this will remain the case,” says RBS. Fixed-income funds’ performance showed a gain of 1.53% for the week ending August 18, according to Lipper, bringing ytd gains to 5.53% gain. Meanwhile, global-income funds rose 0.98% for the week, to yield 5.58% growth ytd. International income funds were up 1.16%, bringing the ytd return to 7.82%.
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Tarjeta Naranja Preps Retap
Fitch has assign a long-term foreign rating of B to an upcoming $100m retap of fixed-rate notes from Tarjeta Naranja, indicating that the Argentine credit company is preparing another international bond foray. The reopening would bring the outstanding size of the bond to $300m, the agency says. In January, the borrower raised $200m from the sale of a new 2017 bond via Bank of America Merrill Lynch and Deutsche Bank, pricing it at par to yield 9%. Tarjeta is controlled by Banco Galicia, the country’s third largest private bank by deposits. The company offers its own branded cards, as well as Visa, MasterCard and American Express, to the middle income segments of the population, and is Argentina’s second largest credit card provider.
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Cresud Selects Bank on External Bond
Argentina’s Cresud has mandated Itau to issue up to $60m in bonds in the international debt markets. The agriculture company plans to sell the senior unsecured bullet notes due 2014 in early September, but may issue in late August if market conditions permit. The Argentine agriculture company is involved in farming and livestock production as well as dairy operations. The company plans to extend the average life of existing debt through issuance of the notes, according to Fitch. The bonds have a B rating by Fitch.