Mexico’s NR Finance priced MXP2.5bn ($215m) in 3-year floating rate bonds in the domestic market, coming at TIIE+50bp, or 5bp tight to guidance after generating MXN3bn plus in demand. Pension and mutual funds were the principal buyers. The Nissan leasing subsidiary was expected to price last month but halted plans to issue after regulators required more time to enquire about guarantees from the parent. With regulations becoming more stringent across Latin America, greater transparency is being sought from issuers in an effort to protect and encourage pension fund participation in bond issues, bankers say. NR Finance plans to use the funds for working capital. HSBC and Scotia managed the sale, rated AAA from Fitch on a local scale. The borrower last came to market in November 2010, when it issued MXP2.8bn in 3-year bonds, priced at 65bp over TIIE.
Category: Bonds
Elektra Preps Pricing After Releasing Guidance
Mexican Retailer Elektra is out with guidance of 7.5% area on a $350m RegS 7-year NC4, falling in line with earlier investor estimates of 7%-8% and coming at the tight end of mid-to-high whispers. Books are closing this morning and pricing is expected as soon as today. By early Wednesday leads were receiving sufficient orders to hit the$350m target, and while some international investors have been somewhat ambivalent about the credit, locals are thought to like a name that is well known in Mexico. Accounts from Latin America, Asia and Europe are also heard to be showing interest. At 7.5% area, pricing is seen as fair from a relative value perspective with some eventual upside in secondary trading. “For new issue liquidity or some diversification, do it,” writes one trader. “But it doesn’t light my fire tremendously. More campfire than bonfire.” As comps this trader was looking at Mexican financial names such Financiera Independencia and Credito Real, which have 2015s trading at 7.9% and 8.0%, as well TV Azteca’s 2018s which have been quoted at around 7.1%. Whether TV Azteca will be able to come at the tight end of the 7.5% area is still a matter for debate, with some investors already drawing a line at the level. “If it is tightened below 7.5%, we will not participate,” notes a European bond investor who has both TV Azteca and Mexican retailer Famsa in his portfolio. Famsa 2015s have been trading at around 8%. Investors are told the company plans to use $250m from bond proceeds to finance debt with the remainder for capex plans. The unsecured notes have a BB Fitch rating. BCP, Jefferies and UBS are leads.
Renner Closes BRL300m Bond
Lojas Renner has raised BRL300m ($188m) through dual-tranche issue in Brazil’s local bond market. The retailer’s BRL215.1m 2016 amortizes equally in years 4 and 5 and pays the DI+1.1%, coming in under a DI+1.35% ceiling. A BRL84.9m IPCA-linked 2017 pays a fixed 7.8% rate and amortizes equally in years 4, 5 and 6. Renner is raising funds to optimize its capital structure, with a view to having sufficient liquidity to carry out its organic expansion plans. Santander managed the sale, rated AA+ on a national scale. The transaction is one of the few Brazilian domestic bond deals done in the rule 400 format, rather than the restricted-format rule 476 provision, which have accounted for the great majority this year.
Senda Launches Consent Solicitation
Mexico’s Grupo Senda Autotransporte has launched a consent solicitation to amend terms on its 10.5% 2015 bonds. Senda wants to loosen a few of the restrictions that limit its ability to take on additional debt, and is offering holders $1.25 for each $1,000 principal amount. The offer expires August 5. JPMorgan is managing. The bus company sold the bonds in a $150m sale in 2007 through Credit Suisse.
Transener Prints New 2021
Argentine utility Transener has priced its new 9.75% 2021 at 95.405 to yield 10.5%, helping it raise $53.1m in cash to help fund a buyback of its existing 2016s. At the same time, it has issued another $46.9m in new 2021s, which were exchanged existing debt. Investors were allowed to swap outstanding bonds for the new 2021s par for par, and receive an extra $30 for each $1,000 if tenders are submitted by the early bird date of July 25. Alternatively, they could cash in the existing bonds and receive $910 for each $1,000 in principal, plus another $90 in early bird premiums. The company is also seeking consents to amend terms and conditions on the outstanding bonds. The exchange offer expires on August 9. The 2016s were originally issued in 2006 with a $220m size and priced at par to yield 8.875%. Citigroup and Deutsche Bank led that transaction and are also acting as leads on this occasion.
Uruguay, Peru file SEC Shelves
Both Uruguay and Peru have filed SEC selves to issue up to $5.56bn in debt between them amid expectations that both sovereigns are likely to favor local-currency trades when they do decide to tap the markets. Peru’s filing to issue of up to $5bn in new debt securities comes some eight months after the Andean country sold $2.5bn in dollar and sol-denominated bonds and after the election victory of left-leaning presidential candidate Ollanta Humala sent bonds and stocks reeling. More recently, however, Peru has seen a relief rally following Humala’s market friendly appointments at the Central Bank and the Ministry of Finance. According to the filing, proceeds are slated for general purposes including financial investments, refinancing, or the retirement of local and external debt. Meanwhile, Uruguay’s move to file an up to $560m debt shelf, as well as an upgrade to BB+ this week by S&P, have raised speculation that the sovereign could try a liability management trade to retire more US dollar debt or simply take a stab at retapping its existing inflation-linked notes. This falls in line with the government’s strategy of de-dollarizing its debt, something that the ratings agencies have also cited as a positive. A reopening of existing UI bonds, currently trading in the 3-4% range, could come at a nice 25bp new issue premium over current trading levels, notes an EM portfolio manager who holds Uruguayan bonds. “There will be lots of interest for local Uruguayan notes,” he adds. Currently, the sovereign has three outstanding UI bonds, its 2018s, 2027s and 2037s. Just yesterday S&P upgraded Uruguay’s sovereign rating to BB+, bringing it in line with Moody’s and Fitch and putting it just below investment grade. Uruguay last came to market in May when it issued JPY40,000 ($493m) in 2021 Samurai notes to yield 1.64%, but it hasn’t been in the broader market since late 2009. Meanwhile, the sovereign has played down any talk of issuance. “The augmentation of the shelf was done b
Venezuela’s Jumbo 20-Yr Fails to Surprise
The announcement Tuesday that Venezuela plans to issue $4.2bn in RegS only 11.95% 2031s hardly came as a surprise after rumors of such a deal had already sent secondary levels south. Indeed, many of the details circulated over the last week proved to be true, with the only slight exceptions such as talk of a 12% coupon. As is standard practice for such deals, the sovereign has set the price beforehand, in this case par, and will leave the books open to allow locals to buy at an FX rate of VEB4.30/1USD. Grey market levels of 81.50-82.50 were already being quoted yesterday as foreign accounts calculated what would be fair value on the bonds once they were free to trade in the international market after a 42 day seasoning period. At 82.50, the amortizer would offer a yield of around 14.37%, according to one investor. “All this will be sold through the Sitme (the state-run FX platform) at VEB5.30/1USD, which implies a slightly lower secondary price [than 81.50-82.50],” says RBS strategist Siobhan Morden. “Irrespective it is cheap versus the curve.” For instance, Venezuelan benchmark 2027s were trading Tuesday afternoon at 74.25, or at a lower 13.125%-13.05% yield, even after selling off in the wake of supply fears. With a $4.2bn size, the new 2031s will become a new benchmark for investors and will provide an attractive instrument to take a view on regime change as the 2012 presidential elections approached, Morden adds. If nothing else the11.95% coupon offers alluring carry. Indeed the deal is expected to go well. As one London-based investor points out, appetite for Venezuela debt remains robust in the context of new inflows to EM bond funds and the resilience of high yield EM debt. The B2/BB-/B plus bond is governed by New York law and will be registered in Luxembourg. The RegS bond will amortize equally on August 5, 2029, 2030, and 2031. Deutsche Bank was mandated as lead, but perhaps more interestingly the government has also selected Russia’s Evorfinance Mosnarban
AES Gener Preps New Issue
Chile’s AES Gener could price a new 5.25% 2021 as soon Thursday as it looks to retire $400m in outstanding 7.5% 2014s. The electricity provider is offering the 2021s or cash to holders of the 2014s. Investors who opt for new bonds will receive $1,000 in 2021s plus $150 in cash per $1,000 principal of existing bonds if tendered prior to July 27. Thereafter, they will receive new bonds plus $110 in cash as long as they tender before the final deadline of August 10. Holders choosing cash will get $1,130 per $1,000, and have only until July 27. Gener is also separately tendering for its local 8.0% 2019 bonds in a domestic offer. Fitch has put an up to $475m size on the new issue after rating it BBB minus. The offer is contingent upon a minimum $200m overall acceptance to the USD tender, as well as Gener successfully issuing enough new 2021s to cover costs associated with the cash portion of the USD bond tender and the local bond tender. Citi and Deutsche Bank are acting as dealer managers.
Brazilian Oil Co Gets Local Funds
Petra Energia, a Brazilian oil producer in the Amazon region, has completed the sale of BRL320m ($209m) in 2013 debentures in the domestic market. The bonds pay interest at the DI+6.25%. BTG Pactual managed the sale, done under the rule 476 restricted format. Petra owns and operates oil reserves in the Parnaiba basin.
GBM Seeks Domestic Financing
Grupo Bursatil Mexicano, the Mexico-based brokerage firm, plans to issue up to MXP1bn ($86m) in floating rate bonds on August 18. Proceeds will be used to rollover about MXP200m in maturing bonds carrying rates of TIIE+50bp and +25bp, as well bank credit lines. The self-led bonds have not been rated. In May, GBM announced plans to raise funds for infrastructure investments through a certificado de capital de desarrollo (CCD).