Category: Economy & Policy

Bancolombia has sold COP500bn in bonds on the Colombia domestic market. It placed COP53.3bn in 2012 notes at a fixed 7.89%, COP120.7bn in 2011s paying DTF plus 1.40%, COP53.3bn in 2014 bonds paying DTF plus 2.40%, COP51.7bn in 2014s paying the IPC inflation index plus 4.80%, COP43.8bn in 2019 bonds paying IPC plus 5.74%, and COP177.2bn in 18-month bonds at IBR plus a spread of 1.49%. The bank had originally offered COP350bn, but raised the amount because of a demand of COP1.17trn. The sale, rated AAA on a national scale, is the third and final from a COP1.5trn program, though the bank is expected to register another of similar size. Bancolombia’s own brokerage unit managed the sale.

BNP Paribas Personal Finance has placed MXP1bn in domestic floating-rate notes, its first-ever long-term debt sale. The 2011 bond, guaranteed by the French parent, priced at TIIE plus 160bp. The transaction was 3-4 times subscribed, according to a banker on it. BNP plans to use proceeds for its operating needs, including lending. Scotia, Santander and HSBC managed the sale.

Mexican sub-sovereign CFE has issued MXP1.1bn worth of 2012 floating-rate bonds. They were priced at TIIE plus 75bp, slightly below what bankers running the deal initially expected. A much larger MXP6.5bn offering of 2012s from Pemex done on May 20 fetched a price of TIIE plus 90bp, notes a banker running the CFE deal. The book for CFE was filled quickly, he adds, indicating a strong bid for the national power operator. The notes are the first offering under a special MXP3bn program that the state-owned utility has jointly filed with Bancomext. The two agencies have set up a fideicomiso that will be used to pre-fund certain expenses for certain kinds of infrastructure projects known as productive infrastructure with deferred expenditure impact. Ixe managed the sale, rated AAA on a national scale. CFE sold MXP3.8bn in 2019 bonds in April via BBVA.

Mexican bottler Embotelladoras Arca has sold MXP1.5bn in domestic bonds, including MXP1bn in 2012 notes at TIIE plus 100bp, and MXP500m in 2016s at a fixed 9.75%, or Mbonos plus 190bp. Demand reached MXP4.2bn for the 2012s and MXP1.8bn for the 2016s, according to a banker managing the sale, pointing to improving local market conditions and strong appetite for defensive credit. Last month, quasi-sovereign Pemex paid TIIE plus 90bp for 2012 floaters and Mbonos plus 156bp on a fixed 2016 tranche. Arca, like Pemex is rated AAA on a national scale. Arca plans to use proceeds to pay back bilateral loans due this year to BBVA, Bank of America and HSBC, which also managed the bond transaction. Arca last issued in February, paying TIIE plus 155bp for MXP1.4bn in 13-month bonds, in one of the first transactions of 2009. This year’s Mexican market is still far from active, but other blue-chips are on the way. Bimbo is set to bring a 5 and 7-year bond June 10, expected to be at least MXP3bn in size, and Femsa is due with a sizeable transaction in late June or July.

Colombian oil producer Ecopetrol has raised COP2.2trn ($994m) via a 7-year loan from a group of local banks. An Ecopetrol official says the loan pays 400bp over DTF, which stood yesterday at 6.11%, according to the central bank. Inflation is around 5%, implying a relatively low real rate for long dated peso financing. “It’s a very good price [for the borrower],” says a banker close to the transaction. The banks on the facility were Banco de Bogota, Banco AV Villas, Banco Occidente, Banco Popular, Bancolombia, Banco de Credito, BBVA, Santander, Banco BCSC, Davivienda and Agrario. Proceeds are destined for the company’s capex plan, which includes $4bn in spending through 2010. State-owned Ecopetrol is also heard feeling out cross-border bond and loan markets for cash to complement peso funding. It was heard earlier this month requesting levels for 3, 5 and 7 year tenors for a syndicated loan facility of up to $500m in size, according to bankers. However, the 5 and 7-year maturities would command a rate unlikely to please the would-be borrower, say bankers, who suggest DCM as a more attractive alternative. Ecopetrol has said it is keen to launch its first public debt placement in over 10 years and investors are expected to jump on it. Shareholders have approved a plan to sell up to $4.1bn in bonds in international and local markets. At the end of 2008, Ecopetrol had $5bn in cash and zero financial debt. The BBB minus/BB+/Ba1 credit is looking to lever up its balance sheet to boost efficiency.

Cementos Argos is preparing a bond issue of up to COP640bn in the domestic markets. The Colombian cement producer is still arranging details, an official says, but it is eyeing fixed rate and DTF-linked tranches, in a sale likely coming within the next month. The issuer has the ability to place bonds at maturities ranging from 18 months to 20 years, he explains. Proceeds will refinance maturing debt. Bancolombia is managing the sale, likely to be joined by other bookrunners. Argos is rated AA+ by Duff & Phelps.

Colombian state-owned development finance agency Findeter has sold COP415.7bn ($170m) in credit deposit notes, on COP674.4bn in demand. It priced COP100bn in 18-month bonds at 0.8% over the DTF benchmark rate, COP96bn in 2011s at DTF plus 1%, COP71bn in 2012s at DTF plus 1.2%, and COP50bn in 2013s at DTF plus 1.32%. Also, a COP99bn 2014 tranche priced at 5.1% over the IPC inflation index. Correval managed the sale, rated AAA on a national scale. Today, Titularizadora Colombiana is expected to sell up to COP505.2bn in 10 and 15-year fixed and floating rate bonds backed by a portfolio of mortgages, also through Correval.

BBVA Bancomer is preparing to sell up to MXP3bn in local bonds as soon as next week, according to bank officials. The floating-rate notes will be priced against the 28-day TIIE benchmark rate, and have a maturity of up to two years. BBVA’s own capital markets unit is managing the transaction. The bank is rated AAA on a national scale.

Embotelladoras Arca has priced MXP1.4bn in13-month (392 day) bonds in the local market at the 28-day TIIE plus 155bp. Proceeds are being used to pay down maturing bank debt. Executives managing the sale claim no official guidance had been given, but pricing appears to have come wide of expectations. Bankers had largely expected the issue to come somewhere between the TIIE plus 80bp that fellow bottler Coca-Cola Femsa got on MXP2bn in 13-month bonds in January, and the 150bp that retailer Liverpool paid for MXP700m in12-month paper earlier this month. That it came 5bp wide of Liverpool was a surprise, says a banker away from the deal who acknowledges it is very difficult to predict pricing right now. It is worth noting, however, that up to 50% of the KOF transaction was designated for the underwriters’ retail clients, whereas Arca was sold mostly to institutions. Arca plans to use proceeds to help repay MXP2.3bn in bank loans raised with Inbursa and BBVA that carry 11.5% interest due in April and November 2009, which are also managing the new issue. Demand reached just over MXP2bn, according to bankers managing the AAA sale, primarily from institutional investors.