Panama’s Empresa Nacional de Autopista (ENA) ventured into volatile markets Thursday to price $395m in dual-tranche bond. Demand was three times over across both tranches, with buyers comprising local banks as well as US insurance companies and pension funds. Tranche A was placed mostly with international accounts, while Tranche B went to domestic investors. “At well over +125bp spread to the sovereign curve, these bonds, especially the 2019 tranche, were very attractively priced,” says one investor. Still spreads came tighter than the original 200bp-250bp that leads were discussing when the deal first emerged. “If you look at other infrastructure deals like the [Brazilian] drillship bond s, they came 100bp wide to Petrobras which is 100bp wide to the sovereign, so to come inside that is a testament to the structure,” says a banker. Both tranches priced at par to yield 5.75% for tranche A’s $170m 2025s and 5.25% for tranche B’s $225m 2019 bonds. ENA is the only LatAm issuer to price this week following a nice flow of US high-grade names. The 144A/RegS notes will be listed on the Panama Stock Exchange, with collateral taking the form of collections from the Corredor Sur toll road and shares of ENA. Tranche A has a make-whole at Treasuries +50bp. Proceed are to be used to refinance $150m of 6.95% amortizing 2025s that helped finance the Corredor Sur tollroad covering 19.5km of Panamanian highway. HSBC and Global Bank led the transaction. The bonds are rated BBB minus/BBB.
Category: Bonds
GBM Extends MXP Pricing
Grupo Bursatil Mexicano (GBM), the Mexico-based brokerage firm, has extended pricing until August 25 for an up to MXP1bn ($81.5m) 3-year local bond. GBM plans to issue floating rate bonds at preliminary, non-official guidance of TIIE + 75bp, and may adjust pricing, tenor and size before next week. Proceeds will be used to rollover about MXP200m in maturing bonds carrying rates of TIIE +50bp and TIIE + 25bp, as well as bank credit lines. The bonds have yet to be rated. In May, GBM announced plans to raise funds for infrastructure investment through Mexico’s certificado de capital de dessarollo (CCD) market.
IDB Raises $1.3bn Benchmark
The Inter-American Development Bank has raised $1.3bn from a new 7-year bond, its first public bond transaction of the year. The 2018 priced at 99.856 with a 1.75% coupon to yield 1.772%, or UST+29bp. The yield was equivalent to mid-swaps plus 5bp, in line with 5bp area guidance. More than 50 accounts put in for $1.5bn in orders, with significant demand from central banks and banks, which comprised nearly 85% of the book, according to bankers on the deal. Asia accounted for 62.5% of the sale, Americas 21.6% and Europe, Middle East and Africa 15.8%. Bank of America Merrill Lynch, Credit Suisse, Daiwa and JPMorgan managed the sale.
Selloff Slams Door On Junk Names
A selloff Thursday in the broader markets has investors in flight-to-safety mode, effectively leaving the bond markets open only to high-grade issuers, bankers and investors say. This makes sense in the context of the acute decoupling between blue-chip and junk names in the secondaries yesterday. “Low beta sovereign performed pretty well,” says Klaus Spielkamp a trader at Bulltick “Colombia was up on the day and I would say Mexico and Brazil was as well, but high-betas suffered and we saw Argentina’s Bodens and Venezuela being hit and trading down two or three points.” A similar story unfolded among corporates. High-grade names like Brazilian banks Bradesco and Itau, as well as Colombian conglomerate Grupo Suramericana found support, while Brazilian beef names like Marfrig and JBS were largely being offered throughout the day. Such spread widening has really shut the door on any junk name that was contemplating a market tap, at least in the short-term. High-grade credits are more likely to lead any true reopening of the market, and could indeed benefit from a US Treasury market that saw the 10-year pierce 2% and the 30-year trade at around 3.4% Thursday. But the nervousness infecting sentiment and the extremely volatile nature of markets these days has left investors more inclined to sit on the sidelines. “The mood is still really bad. [In this market], you would prefer to lower your exposure rather than get into something that may be opportunistic,” Spielkamp adds. Worries about a double dip recession, not to mention the solvency of some European banks and the possible knock-on effects on US financial institutions leaves too many unanswered questions “We are seeing money put to work, but investors are still cautious and selective,” says one banker. Quasi sovereign Panamanian credit Empresas Nacional de Autopista got through the door Thursday following activity in the US high-grade market this week, but its rarity value and structured nature doesn’t necessarily make
Fitch Rates Cresud Bond
Fitch has assigned a B rating for an upcoming $60m 2014 from Argentina agriculture company Cresud. Through the new issue, the company hopes to extend the average life of its debt, the agency says. Cresud, which owns 57.5% of real estate firm IRSA, had a net debt-to-Ebitda ratio of 3.1 times and an Ebitda-to-interest expense ratio of 3.5x as of March 31, say Fitch which links the ratings of both companies. 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.
Popular Colombia Raises $225m
Colombia’s Banco Popular has sold COP400bn ($225m) in 3 series of local bonds, upsizing the transaction to its upper limit. A COP176bn 1.5-year tranche pays the IBR+1.71%, a COP122bn 2013 tranche pays the IBR+1.81%, and a COP156bn IPC-linked 2015 piece pays 3.68%. Total demand topped COP700bn, according to a local broker. A 3-year IBR tranche was discarded. Proceeds will support the bank’s capital base. Popular managed the sale, rated AAA on a national scale.
Davivienda’s Sights on Foreign Stock, Bond
Colombia’s Banco Davivienda plans to raise up to $350m in subordinated bonds overseas, and also continues to work on plans for a foreign stock listing. The mortgage lender, which has designs on expanding into Peru, Chile, and Central America, would be taking advantage of low rates in what would be a debut international issue. The sale would not come for at least a few months and possibly not until next year, with the process of choosing banks not yet started, says an official at the bank. A 7-year tenor is being considered, with subordinated bonds best fitting the bank’s capital needs, he says. Davivienda also reiterated it plans on an eventual ADR listing. There are no details regarding the timing of this process, though it is also thought to be a 2012 event, and may or may not involve the sale of new shares. The lender had indicated in the past it wished to sell bonds and shares abroad, but plans were put on hold during the 2008 credit crisis. Davivienda raised $228m equivalent in a domestic market IPO last year, and is a frequent issuer in the local bond market. The bank is expected to have a COP300bn-COP500bn bond sale within the next month, after postponing it last week.
ENA Extends Pricing
Panama’s Empresa Nacional de Autopista (ENA) has extended pricing for its dual-tranche $395m bonds. The corporation wholly owned by the Republic of Panama had set its sights for Wednesday pricing but has opted instead to price and disclose allocations today. The deal comes amid continued uncertainty in the markets as the issuer looks to cover two tranches in the amount of $170m and $225m to refinance $150m of 6.95% amortizing 2025 bonds, a precursor to the sale of the Corredor Sur tollroad for $420m. Tranche A was heard covered by 3x as of late Wednesday while tranche B’s coverage has not been disclosed. ENA launched $170m tranche A at 5.75% with a $225m tranche B at 5.25% Wednesday. ENA’s bonds, rated BBB/BBB minus, were offering investors between high 100s to mid 200s over the Panama sovereign. “The sovereign is trading so tightly. If you look at the Panama 2015s they are being quoted at 2%, so nearly anything with a decent spread over the sovereign is attractive,” says Carl Ross managing director of investments at Oppenheimer & Co. The 144A/RegS deal is being managed by HSBC and Global Bank.
Fovissste Sets Guidance
Mexican government housing agency Fovissste has set guidance of 4.70% for an up to MXP4.2bn ($345m) equivalent UDI-denominated RMBS, according to a banker on the deal. Pricing, originally set for August 17, is scheduled for today. Proceeds from the 2040 bond will be used to originate mortgages. The issuer last raised MXP3.6bn in June when it sold a UDI-denominated RMBS that generated MXP10bn in demand and priced to yield 4.70% or 339bp over Udibonos. BBVA Bancomer, BAML, IXE, Banorte are bookrunners on this deal. The bonds are rated AAA.
Itau Chile Places Local Bond
Itau Chile has sold UF1m ($47m) in domestic bonds. The 2031 notes with a 13.8-year average life priced at 103.63 with a 4.0% coupon to yield 3.73%. Itau managed the sale, rated AA/AA minus on a national scale. The sale is the second off a program from which Itau can issue periodically, and follows an identical UF1m sale last week which secured an identical coupon and yield.