Category: Economy & Policy

Colombia’s Banco Davivienda has sold COP550bn ($222.7m) in local bonds. The bank offered COP360bn in floating-rate notes, including 2010 notes paying the DTF rate plus 110bp, 2011 notes at DTF plus 120bp, 2012s at 135bp over DTF, and 2016s at IPC plus 550bp. Davivienda also sold COP67.3bn in 2011 fixed-rate at 10.4% and COP123.4bn in 2019 fixed-rate bonds at 10.4%. Demand reached COP1.26trn, Davivienda says. Davivienda plans to support its lending with proceeds from the sale, rated AAA on a national scale. Correval managed the issue. The bonds are part of a broader program of COP1trn to be sold this year.

Coca-Cola Femsa has priced MXP2bn in 14-month bonds at 80bp over 28-day TIIE, according to bankers managing the transaction. Demand reached MXP3bn, according to a banker on the sale. This is big jolt versus Femsa’s last local issue, a May 2008 sale of MXP1.5bn in 2011 bonds that priced 2bp through TIIE. The 28-day TIIE was at 8.1% Wednesday, versus 7.9% last May. The bottler placed the maximum it had filed for, but decided against allocating part of the issue in fixed-rate bonds of up to 5 years. According to S&P, which rates the deal AAA on a national scale, the deal could have gone out as long as 2011. KOF plans to use proceeds to help repay 9.9% bonds maturing in July, and for general purposes. Banamex and HSBC managed the transaction, the first plain vanilla corporate of 2009 in the local Mexican bond market, according to Dealogic. The last AAA corporate was America Movil’s MXP3bn in 2013s at Cetes plus 55bp and MXP2.1bn in 2013 UDI-denominated notes at the Udibono plus 60bp.

GVT Holdings, the Brazilian telecom company, has secured BRL616m in funds from the BNDES. The average annual interest rate of the facility is equivalent to approximately 85% of CDI, or 11.37%, says GVT, which says the calculation is based on present day CDI and TJLP levels. The loan has an 8.5 year term and a grace period of 2.5 years for amortization of the principal with interest payments only, and additional 6 years of principal amortization and interest payments. The final payment is due June 2017. Of the total approved amount, BRL200m is to be disbursed by year-end with the remainder being fed to the company through 2011, according to GVT.

Mexico’s TIIE rate should adjust upward to reflect lack of liquidity and higher borrowing costs in local money markets, Credit Suisse says, having a negative implication on the TIIE swap curve. Unlike Libor rates, the 28-day TIIE has been “remarkably stable,” since 2007, keeping mostly within 40bp-50bp, the shop says. Credit Suisse finds that the benchmark – reached through a poll of 15 Mexican commercial banks – is starting to show a lack of correlation with other on and off-shore rates that suggest an adjustment is likely. TIIE was at 8.68% Tuesday.

BBVA Bancomer has sold MXP3bn in 2018 subordinated bonds at TIIE plus 65bp. The notes were sold primarily to local wealth management and private banking investors, according to a banker on the deal. Proceeds will strengthen the bank’s tier-2 capital base. BBVA managed the sale, rated AAA on a national scale. The issue comes two days after HSBC priced MXP1.8bn in 2018 bonds at 60bp.

HSBC’s Mexican unit has priced MXP1.8bn in 2018 subordinated bonds at TIIE plus 60bp. The amount was reached through bookbuilding, according to bankers managing the sale. Proceeds will strengthen the bank’s Tier 2 capital. HSBC’s capital markets unit managed the transaction, rated AAA on a national scale. BBVA Bancomer has also recently filed to sell an unspecified amount of subordinated bonds.

Mexican builder ICA will pay a spread of TIIE plus 180bp on a MXP2.25bn 17-year loan supporting construction of the Rio Verde-Ciudad Valles highway in San Luis Potosi. The concession for the 112-km highway was awarded to ICA under the PPP mechanism in 2007. Santander is sole bookrunner.

GMAC Mexicana has priced MXP1.5bn in 2010 bonds backed by loans to Mexican GM dealers, at 28-day TIIE plus 200bp. The transaction represents the first auto loan securitization in Mexico, according to GMAC officials, and is a replication of a structure used in the US where bonds are backed by financing that dealers use to purchase vehicles from GM. The deal was oversubscribed, according to the issuer, and it was placed mainly with Mexican insurance companies, wealth managers and mutual funds. No official price guidance was issued, but the level was in line with expectations developed during an August roadshow, officials on it say. Scotia managed the transaction, rated AAA on a national scale. Separately, Moody’s downgraded GMAC Financiera as a master servicer of residential mortgages to SQ2 minus from SQ2 and put it on review for possible downgrade. “The financial and operating problems faced by ResCap and GMAC LLC, parent companies in the US, negatively affects the operating conditions of GMAC Financiera,” says the agency.

Mexico’s BBVA Bancomer has priced MXP2.4bn in 2010 bonds at 3bp through TIIE. Proceeds from the deal rated AAA on a national scale will go to the bank’s capital base. BBVA’s capital markets unit managed the sale. The bank has done six placements of certificados bursatiles this year with maturities ranging from two to 10 years, totaling MXP22bn.

Mexican retailer Soriana has priced MXP4.6bn in 2010 bonds at TIIE+48bp. The offering – shorter and wider than a deal placed just 3 months back – received more than MXP7.2bn in demand, according to bankers on the deal. It is the second takeout of a bridge that funded the $1.35bn December acquisition of rival retailer Grupo Gigante. Inbursa, JPMorgan and Banamex managed the transaction, due December 30 2010 and rated AA on a national scale. In June, Soriana placed MXP5.5bn in 2013 bonds at TIIE+43bp through the same trio of banks. The remainder of the bridge is expected to be paid down using commercial paper.