Chilean bank Corpbanca issued UF2.2m ($97m) in local bonds in a single tranche via a Dutch auction. The AA-/AA rated notes priced at 92.71 with a coupon of 3.00% to yield 3.95%, an 88bp spread over BCU-10. Corpbanca’s own brokerage handled the sale.
Category: Bonds
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Fertilizer Bond Returns at Higher Yield
Mexico’s Fertinal is attempting a new bond issue again, back with tighter covenants and a higher yield. Investors say the fertilizer producer was looking to get the $200m 2015 NC3 deal done this week at a 13.5% yield. UBS is managing the sale, postponed last week after the buyside did not bite at 12% handle talk. Proceeds from the B/B2 rated issue are marked for a $180m bridge, to partially finance capex and support working capital. The bridge is being used to reacquire assets from former creditors and satisfy other obligations associated with bankruptcy, according to Moody’s.
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Jamaica to Meet Investors
Jamaica is set to meet investors in Europe beginning next week, according to a finance ministry official, with plans to meet the US buyside later in the month. Citi is managing the meetings, which are “non-deal.”
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Mexico Pays For Duration
Locking-in historically low interest rates available to quality LatAm issuers, Mexico has sold the first 100-year bond from a sovereign in the region, knocking the 2040 by pricing at a premium. The $1bn bond priced at 94.276 with a 5.750% coupon to yield 6.100%, or 30-year UST plus 235bp, in line with 6.100% area guidance. It was heard up 1pt in the gray at the end of the day Tuesday, with traders noting a 1pt drop in UMS 2040. Investors spot the premium to Mexico’s outstanding 30-year at 95bp-100bp, with bankers on the deal indicating 90bp-95bp. “We are at historic lows, and could potentially not see such low yields across the globe for a long time. You have to look at it from that perspective, even through they paid a bit of a premium,” Paul Biszko, EM strategist at RBC, tells LatinFinance. He notes the impact on the long end of the curve should be temporary. “This is what happens at the top of the market – they are securing this cheap financing for a long period of time,” says a West Coast EM investor who passed due to an overweight on Mexico. Bankers on the deal say an August $250m retap of BBB US railroad Norfolk Southern’s 100-year came 90bp wide to its 30-year, serving as a price reference. UMS has been heard considering the structure, though the market and issuer were surprised by the final $1bn size, upsized from $500m on about $2.6bn demand. “This was a non-obvious trade, but we’ve noticed the appetite for long-duration assets has increased in this low interest rate environment,” Gerardo Rodriguez, Mexico’s deputy undersecretary for public credit, tells LatinFinance. He says Mexico got the idea following a few corporate century issuances this year, and decided to take advantage of an all-time low yield environment. “Ahead of the transaction the question was weather we could break the negative dynamics around 100-year transactions,” he says, with deals characterized by low investor participation, small size, and low liquidity. Century issuance from Norfol
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Panama Aims for Sub 2% Samurai
Panama is hoping low global rates – especially in Japan – mean a Samurai issuance next year price through recent sovereign deals done with a JBIC guarantee. “The economic future of Panama is very much tied to Asia, and we want Asian investors to know Panama and be comfortable taking Panamanian risk,” Diego Ferrer, head of institutional relations at Panama’s public credit office, tells LatinFinance. The JBIC-wrapped deal should be $500m equivalent at 10 years and be completed by the end of January, he explains, to meet a debt maturity in February. The sovereign, with 3 out of 3 investment-grade ratings as of June, is aiming for a coupon under 2%, Ferrer says, which would be lower than Mexico, Colombia and the other issuers tapping that market in the past year under the JBIC program, which offers a 95% guarantee. After swapping to dollars, it would come in line with Panama’s curve, he says. The issuer is in the process of selecting banks for the transaction and should be helped by low interest rates, an increase in Japanese appetite for EM credit and Panama’s scarcity value, Ferrer says. Mexico was the last sovereign to hit the Samurai market, raising JPY150bn ($1.7bn) in 2019s at 2.22% coupon in December 2009. It has plans to tap again before the end of the year.
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Pemex Gets Commitment on Jumbo Loan
Mexico’s Pemex has received a $75m ticket from EDC for the first tranche of its $3.25bn dual-tranche loan, according to bankers with knowledge of the deal. The first tranche is a $1.25bn 3-year revolver, to re-finance a loan that matured in September, for which it is offering 125bp over Libor. Bookrunners are Barclays, BBVA, Credit Agricole (admin agent) and RBS. It also wants a new money 5-year term loan for $2bn at L+150bp. BBVA (admin agent), BNP Paribas, Credit Agricole, Citi, HSBC and Inbursa are bookrunners. The revolver is to refinance a loan taken in 2007 for $1.25bn that was priced at Libor plus 20bp. Fees for participation in the revolver range from 25bp-60bp for $100m, $75m, $50m and $35m tickets. On the term loan, fees range from 45bp to 85bp for $150m, $100m, $75m and $50m commitments. Bankers say that of the 2 tranches the term loan looks more attractive. The deadline for commitments is October 13.
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Brazilian Companies Plan Debentures
Brazil-based engineering company Alusa Engenharia and education company Abril Educacao are planning debenture issues, according to DCM bankers in the country. Alusa is heard planning to issue BRL300m in 5-year debentures with the help of HSBC, Banco do Brasil and Bradesco. Abril, meanwhile, is heard to be looking to raise BRL265m in 5-year notes with the help of HSBC and Bradesco.
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Ecopetrol Wants Pesos in Debt Mix
Colombia’s Ecopetrol plans to make use of the country’s domestic debt markets in the immediate future. “We have a lower cost of indebtedness in US dollars, but given our revenue structure, it is important to have funding in pesos and in dollars,” says CFO Adriana Echeverri. The oil producer plans to raise up to COP1trn ($500m) in local markets. Echeverri says rates are low in Colombia, like in the US, consistent with the general global trend. The company is still choosing banks for the deal, she says, and will hire them once regulators have approved a transaction. She declines comment on possible maturities. The company will also seek peso financing for a portion of the $4.2bn Oleoducto Bicentenario pipeline project. Ecopetrol is choosing a partner from among 14 interested parties – including Pacific Rubiales and Petrominerales –and should decide by the end of the month. The joint venture will seek a certain portion of funding in debt markets, Echeverri says. New shares for the public are still in the cards, as Ecopetrol can sell another 9.9% to bring the float to 20%. “The transaction depends on the rhythm of our investments – it could be next year, or 2012,” says CEO Javier Gutierrez. Gutierrez declines to comment on the possibility of a return to the dollar bond markets, following 2009’s successful $1.5bn debut. Echeverri and Gutierrez spoke to reporters in New York Monday.
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Inbursa to Issue MXP5bn
Banco Inbursa is set to auction up to MXP5bn 3 year bonds on 13 October, according to a regulatory filing. The transaction is self-led, joint with BBVA Bancomer and is rated AAA on a national scale. The bonds will pay a spread over TIIE. The deal follows on from the bank’s August bond issue, which was its first bond issue since it was set up in 1993. The bank issued MXN5bn in 5-year paper, which paid a spread of TIIE plus 24bp.
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Su Casita Dangles Longer Debt, Equity
Hipotecaria Su Casita has presented a restructuring plan to holders of its MXP8.74bn in debt, offering longer-dated new debt and equity. The troubled Mexican mortgage lender will offer holders of its MXP1.985bn in short-term (less than 12 months) local debt cash worth MXP1.30bn (65%) of the debt, new 3-year debt worth MXP99.2m and an equity position with MXP1bn book value, or 0.02% of total capital. Meanwhile, holders of long-term (1-year+) dollar and peso debt, which totals MXP6.75bn, are offered MXP1.50bn in new 5-year debt paying TIIE plus 250bp, MXP551m in 3-year debt, MXP500m in 10-year subordinated debt paying a 3% coupon that steps up to 8% and is worth 10% of the company in the event of conversion. It also offers an equity stake worth 19.98% of the company. The deal represents recovery value of 70% in the case of short-term debt, and 51% for long-term debt holders, Su Casita says. Su Casita, 40% owned by Spain’s Caja Madrid, has been seeking alternatives since a deal to sell to BBVA Bancomer fell through in September. Rothschild is advising on the restructuring process, according to a company official.