Category: Bonds

Veteran LatAm DCM specialist Sandy Severino is heard moving over to BTG Pactual in New York, according to people familiar with the move. BTG has had a good run in equity this year, but is understood to be keen to expand its capital markets offerings. For the year to April 16, BTG is third in the regional equity league table, with $1.037bn in credit from 7 deals, Dealogic data show. It fails to make the top 10 for M&A or DCM, but still ranks fifth in the regional investment bank fees league, with $28m in revenue, or 6.7% of the market. Severino left Citi earlier this month, according to a source at the bank. He is understood to be on gardening leave. Severino joined Citi in 2003 and was latterly a managing director. He was previously at Deutsche Bank.

Veteran LatAm DCM specialist Sandy Severino has left Citi in New York, according to a source at the bank. It was not clear if the Brazil specialist is headed to another shop. Severino joined Citi in the summer of 2003 and was a managing director. He was previously at Deutsche Bank.

Banco Bradesco plans to sell $250m in a 2013 bond, with pricing expected today. Yield guidance of 165bp over UST, plus or minus 5bp, emerged yesterday on the transaction, which is heard motivated by reverse inquiry. Proceeds from the Baa2/BBB sale are marked for general corporate purposes. Bank of America Merrill Lynch, Espirito Santo, Bradesco and HSBC are managing the sale, conducted through Bradesco’s Cayman Islands branch.

Chilean water utility Aguas Andinas is set to issue UF2.75m ($112.69m) in bonds on the domestic market today, according to Armando Briceno, a DCM banker with Larrain Vial, who is handling the sale alongside BBVA. Aguas originally intended to issue up to UF4.00m in 3 tranches. The current deal will offer a UF1.00m 6.5-year tranche with a 3.90% coupon and a UF1.75m 21.0-year tranche with a 4.20% coupon, the banker adds. Proceeds will finance the company’s investment plans.

Itau has sold $1bn in 2020 Tier 2 bonds to mark in its first public overseas sale since the 2008 merger with Brazilian rival Unibanco. The order book topped $2.5bn, according to bankers on the deal, with investors generally viewing the price as fair. The bank sold the Baa2/BBB minus deal at 99.552 with a 6.200% coupon, to yield 6.261%, or US Treasuries plus 237.5bp, the tight end of 237.5bp-250bp guidance. The bond traded at around reoffer Wednesday afternoon, according to investors. “If you think it will trade inside of Bradesco [2019 Tier 2], there may be some upside,” says a participating London-based EM fixed income investor. He adds that it was priced fairly, with perhaps 1-2 points of upside. BBB/Baa3 rated Bradesco’s 2019 Tier 2 bond traded in the mid 220bp area Wednesday, according to investors. Bankers away from the trade say it was appropriately priced, considering both Itau’s relatively long absence from markets and the amount of Brazil bank supply recently. Bankers running the deal through Itau-Unibanco Holding Cayman Islands say it is the largest-ever Tier 2 bond from LatAm. Close to 200 accounts participated, with significant Asian participation, as well as retail and high-grade dedicated buyers. Itau, Goldman Sachs and Morgan Stanley managed the sale, which follows a roadshow covering the US, Europe and Asia. It was Itau’s first public dollar bond since 2005, the year in which Unibanco issued a $500m perpetual, according to Dealogic. The parade of Brazilians seeking Tier 2 capital shows no sign of abating, with Banco Panamericano and BicBanco teeing up. Mexico’s BBVA Bancomer is also heard looking to raise subordinated debt.

Sao Paulo water utility Sabesp is heard out with an RFP for dollar and local market DCM funding options, according to DCM bankers. Its last dollar bond was a $140m 10-year done in 2006 through Deutsche Bank. Sabesp has been a frequent issuer in Brazil, and is currently awaiting approval for BRL900m in 2013 and 2015 issues. Sabesp is rated BB by Fitch.

Mexico’s Credito Real is preparing to sell $150m in 2015 unsecured bonds, in what would be the payroll discount lender’s dollar DCM debut. The BB minus rated deal is expected by the end of this week, and follows limited “non deal” investor meetings in the US and Europe that finished last week. Real is likely facing a yield of around 10%, if last month’s $200m 2015 deal from compatriot lender Financiera Independencia (Findep), also rated BB minus, is any indication. That microfinancier priced at par to yield 10%. Bank of America-Merrill Lynch is leading Credito Real, after managing the recent meetings. “The ratings on Credito Real reflect a high dependence on volatile funding sources – market debt – with support from adequate asset quality, and improved and stable profitability and adjusted capitalization,” S&P says in a report. Real is a frequent, if not large, issuer in its domestic market, having sold MXP1.62bn in 2009 in 4 sales throughout the year. Several high-yield Brazilian financial institutions have raised funds in the dollar markets since the reopening last year, but Credito Real would mark only the second out of Mexico, after Findep.

Mexico’s government bonds are eligible for inclusion into Citi’s World Government Bond Index, Citi says. A group of 19 series – totaling about $100bn – should gain entry in October, if they continue to meet size, credit and barriers to entry requirements for 3 consecutive months. Mexico’s government has sold MXP25bn in domestic 8.0% of 2020 and MXP15bn in domestic 4% of 2040 inflation-indexed bonds this year through a new syndication method. The program is designed to allow instant benchmark-size liquidity, attract foreign investors, and attain eligibility for indices such as Citi’s. Mexico would be the first LatAm country to enter the index. Its estimated weight in the WGBI would be 0.64%.