Mexico’s Grupo Aeroportuario del Centro Norte (OMA) has issued MXP1.3bn ($111m) in 5-year floating rate bonds, says a banker on the deal. The bonds priced at TIIE+70bp, pricing tight to the 65bp-70bp area guidance. The airport operator, rated AA plus, will use proceeds to reduce bank debt and for general corporate purposes. It is the issuer’s debut local bond. Banamex, HSBC and JPMorgan managed the deal.
Category: Bonds
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Argie Conglomerate Seeks Funding
Grupo ODS, owner of builder IECS and real estate developer Creaurban, is preparing a $150m 2018 bond, according to ratings agencies. Having previously funded with short term bank debt, ODS plans to use proceeds from the B3/B notes to refinance that debt and for working capital. The bonds are guaranteed by IECSA and Creaurban, with the two representing more than 70% of ODS revenues. ODS was founded in 2007 after existing shareholders purchased IECSA and its controlled companies from Sideco, and merged them all under the same management. Its other activities include toll-road concessions, and financial and mining services.
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Brazilian Media Group Raises BRL300m
Grupo RBS, an owner of several TV stations, radio stations and newspapers concentrated in southern Brazil, has completed a BRL300m ($300m) local bond sale. The 2021 notes pay the DI+2.5% and amortize in 5 equal parts beginning in 2017. Bradesco managed the transaction, done under the rule 476 restricted format.
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Celulosa Sets Guidance
Celulosa Argentina has set yield guidance of 10%-10.25% area for a $150m 7-year NC4. The transaction is in the book building process and is expected to price today should market conditions allow. With single-B Argentina comps trading closer to a 9.50-9.75% area, a yield at 10% or more might be doable for investors depending on risk appetite. The B2 Moody’s rated pulp and paper producer is seeking funds to repay debt and invest in forestry and its industrial plant. Citi and Credit Suisse are managing the sale. It would be the issuer’s dollar debut bond.
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Chile Expected to Pause Rate Hikes
Chile’s central bank is widely expected to keep its rate steady at 5.25% today. Goldman Sachs, meanwhile, also sees the central bank pausing now that it is no longer expected to miss its inflation target for 2011 despite an increase in fuel-energy prices. Nomura sees the rate reaching 5.50% in the next 3 months.
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Chile’s BCI Taps Mexican Market
Chile’s Banco de Credito e Inversiones (BCI) has issued MXP2bn ($170m) through a 5-year floater, becoming the second-ever Chilean borrower to tap the Mexican market. This follows Chilean miner Molymet, which has also sold bonds to Mexican investors. The deal priced at TIIE+40bp and was 1.23x oversubscribed, says a banker familiar with the transaction. The bonds were bought by a mix of private banks, mutual funds, investment funds, insurance funds and bank treasuries. Banco de Credito, rated AAA on a national scale was brought to market by HSBC with proceeds going towards general corporate purposes. BCI follows Chilean mining company Molymet, which has mining operations in Mexico and has done three MXP bond issuances. The last was in April, for MXP 1.5bn in 1.5-year bonds priced at TIIE +55bp. BCI tried to go outside Chile for funds for the first time in September, when plans for a 5-year USD were derailed by pricing concerns and instead it elected to raise 10-year funds locally.
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Cosipa Seeks Consents
Brazilian steel company Cosipa is seeking consents to amend the indenture governing its 8.25% 2016s. The idea is to establish the same covenant package contained in the 7.25% 2018s issued by Usiminas, which merged with Cosipa in April 2009. The 2018s have less restrictive covenants thanks to Usiminas’ investment grade rating. Holders who are validly deliver consents before the expiration date of July 27 will receive $2.50 for each $1,000 in principal. Itau BBA is acting as dealer manager.
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Markets Debate YPF Pricing
Whether YPF would pull the trigger this week remained unclear Wednesday as markets struggled to reach a consensus on pricing for the Argentine oil and gas company’s new 8-year, 7-year average life bond. Talk among investors ranged anywhere from the low 6s up to 7%, at least as a starting point, but leads failed to emerge with any official guidance after wrapping up roadshows yesterday. Today may be a different story, though recent volatility has made life difficult for several borrowers eyeing issuance this week. Markets did received a boost early Wednesday after China emerged with strong economic data and Fed chairman Ben Bernanke expressed a willingness to implement more quantitative easing. But continued unease over Europe’s debt crisis plus Moody’s move yesterday to put the US on review for a downgrade are weighing on sentiment. It is thought that YPF wants to showcase what is a rare bond for one of Argentina’s few blue-chip names and it is unlikely to pay a volatility premium given it has no real funding needs. “It is not a question of price discovery. It is a matter of finding the appropriate markets conditions and building a trade that the company would be happy with,” said one banker. In regards to pricing, investors were largely debating where YPF, owned by Spain’s Repsol, should come against another Argentine oil and gas company, Pan American Energy (PAE), which is now jointly controlled by Bridas and China’s CNOOC. “Where YPF comes depends on whether you think it is a better credit than Pan American,” said one banker. PAE’s bonds were trading at around 6.90%, but they have a longer 2021 maturity and under better market conditions can be quoted as tight as 6.625% (+/- 1/8), according to one trader. One investor who liked YPF and saw some scarcity value in the name thought the company could come at 6.25%-6.375%, while some put a final print at around 6.625%-7.00%. This compares to the sovereign’s New York law 2017s which were trading at around 8%, while YPF
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Minerva, Launches Converts, Plans Warrant Tender
Brazilian meatpacker Minerva plans to sell its BRL300m ($190m) 2015 convertible debentures at between 97.00 and 103.00 of face value on July 26 and will tender for outstanding stock warrants thereafter. The deal is being called the Brazilian market’s first-ever public sale of mandatorily-convertible debentures, The issuer elected to price the bonds at the premium or discount, as regulators only wanted investors bidding on one value during the sale process, according to a company official. The issuer had originally planned to negotiate the interest rate, now set at 100% of DI, as well as the minimum and maximum conversion prices, now set at BRL6.00 and BRL8.00, respectively. Shares closed at BRL5.24 Wednesday. Proceeds from the sale are marked for repaying existing debt, and for working capital. Minerva is rated BBB minus on a national scale. Goldman Sachs, Deutsche Bank and Banco do Brasil are leads. Separately, following the convertible bond sale Minerva says it plans to launch a tender for some BRL150m notional value in stock warrants issued as part of a 2009 capital raise.
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Minerva Preps For Possible Upgrade
Moody’s placed Minerva’s B3 corporate family rating on review for a possible upgrade, following the announcement of a planned offering of BRL300m ($190m) in mandatorily convertible debentures. The rating could be upgraded if Moody’s expects the Brazilian beef producer to continue to diversify its revenue and cash flow streams, and reduce adjusted total debt to Ebitda to below 5.0x. Moody’s last rating action for Minerva occurred January 13 when it changed the corporate family rating outlook to positive from stable. This reflected the rating agency’s view that Minerva would continue to deleverage, manage Capex and expand processed food revenues.