Bancolombia is selling COP191bn ($102m) in mortgage loans to Titularizadora Colombiana, the securitization shop. The mortgages will be securitized through the issuance of TIPS (Colombian MBS). “The purpose of this transaction is to continue the transfer of Bancolombia’s mortgage loans to the capital markets,” says the Colombian bank.
Category: Topics
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Bolivia Secures CAF Loans
CAF has approved a $250m credit to Bolivia to fund a social and economic infrastructure program in marginalized areas of the country. The program features investments in the agricultural and hydro resources sectors. Additionally, the multilateral approved a $43.9m loan for the electrical interconnection project of the city of Tarija, a project to be executed by Bolivia’s Empresa Nacional de Electricidad (ENDE). The project includes construction of a 245km electric transmission line, expected to transport up to 230kw of electric power to the city, as well as a fiber optic network between Potosi and Tarija. Pricing and other terms on the loans were not disclosed.
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Petrobras Reported Studying Share Sale
Petrobras is studying the possibility of holding a new share sale to raise money needed to develop its newfound oilfields, according to wire reports citing CEO Jose Sergio Gabrielli. Gabrielli added that no sale is yet scheduled, and that the company prefers to issue debt – pointing to a debt-to-revenue ratio of 17% that could be boosted to 25-35%. The state-controlled oil producer has said it plans to raise about $5bn in debt this year, and is expected to come to that market this fall, following an aborted cross-border bond deal after a non-deal road show this spring.
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Investors Load Up on Mexico Debt/FX
The buyside has aggressively added to positions in Mexico, according to JPMorgan, which last week surveyed investors managing $511bn in EM fixed income and FX assets. The move was driven by significant reduction in underweights by real money accounts, while JPM also notes that trading accounts are now just into overweight, for the first time since early 2003. “Mexico sovereign supply continues to be a positive for the credit, as not only is no supply anticipated, but the warrant maturities should reduce still further the stock of debt outstanding.” Investors also added to Chile, while small reductions were seen in Ecuador and Venezuela, says JPM, which maintains external debt technicals at positive. “Local markets exposure by international investors are at their highest levels this year. Dedicated investors increased from 28.7% to 29.1%, while trading accounts increased from 41.4% to 41.8%,” it adds. The shop estimate year-to-date inflows to EM FX and fixed income stand at $11bn, but it sees downside risks to the full year forecast of $20-25bn. Investors say they expect the JPM GBI-EM Global Diversified index to return another 3.4% this year, with duration contributing 75% and FX contributing 25%, implying full year returns of 8.6%, below JPM’s 11% house forecast. Investors also expect the benchmark EMBI Global to return 1.7% through year-end. “Supply risks are concentrated in the corporate sector, in our view, with about $41bn of issuance remaining. Sovereign issuance may total $17bn for the remainder of the year, versus EMBI Global index cashflows of $10bn for the rest of the year,” says JPMorgan.
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HSBC Mexican RMBS Waits
HSBC is aiming to sell MXP1.93bn in a 2028 RMBS this week or next, after initially preparing to come to market as soon as last Friday. The offering rated AAA on a national scale features a MXP969m tranche and MXP964m piece that amortizes after the first, but is not subordinated. A pool of 2,785 of HSBC mortgage loans backs the bonds. HSBC is managing the transaction. The issue is the third from a MXP10bn shelf, last used in the sale of MXP3.5bn in 2025s in October 2007.
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CSN Advances Namisa Auction
Brazilian steelmaker CSN is moving ahead with its sale of Namisa, from which it hopes to raise up to $11bn. People close to the process say legally binding bids are due in the first week of September from second round participants. A conclusion could come as early as October, say the executives, declining to name participants or describe the bidding group. The steelmaker hired Goldman Sachs to advise it on the sale of the asset, which the company claims makes up an integrated mining operation. M&A bankers hesitated to get involved in the deal, fearing chairman and chief shareholder Benjamin Steinbruch would accept the bids and eventually decline to sell. The executive has a reputation for trying to boost CSN’s share price.
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Soriana Readies Last Piece of Gigante Financing
Mexican retailer Soriana has filed to sell up to MXP4.8bn in floating-rate bonds, the second long-term piece of its refinancing of a bridge that funded the $1.35bn December acquisition of rival Grupo Gigante. It has not yet indicated the maturity of the offering, rated AA on a national scale. Inbursa, JPMorgan and Banamex will manage the transaction. In June, Soriana placed MXP5.5bn in 2013 bonds at TIIE plus 43bp through the same trio of banks. The remainder of the bridge is expected to be repaid using commercial paper.
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Cabei Plans Taiwanese Bonds
Cabei plans to sell as much as TWD7bn ($220m) through a bond issue in Taiwan. Proceeds will fund loans to its Central American member nations. Further details are not yet available, a Cabei treasury official in Honduras tells LatinFinance. Separately, the bank announced that it has placed MXP350m in 2020 bonds in Mexico, denominated in the UDI inflation-linked unit, at fixed-rate of 4.44%, via Bulltick. The development bank likes to spread its funding around the globe, issuing MXP750m in Mexico in May and THB2.37bn ($77m) in Thailand in November, both through Citi. It has issued in Japan, Hong Kong, Singapore, and previously in Taiwan. CABEI has 13 member nations, including Taiwan and 6 other non-regional members.
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Local Consortium Awarded Peru Concession
A consortium formed by local developer Grana y Montero and logistics operator Oiltanking Peru has won the concession to build and operate a $107m, 245km pipeline that will transport will transport up to18,000 bpd of liquefied petroleum gas and other hydro carbons from a pumping facility operated by Argentinean group Pluspetrol in Pisco to a storage facility in Lurin, a city near Lima, the Peruvian investment promotion agency ProInversion says. The consortium will build the pipeline, known as Poliducto Pisco-Lurin and operate and maintain it for 10 years, ProInversion says. An estimated $70m will be used for the construction of the pipeline, while $37m will be spent in operations and maintenance in the 10 year period, the agency adds.
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WisdomTree Sprouts Chile, Mexico ETFs
WisdomTree Asset Management plans to launch 25 new exchange-traded funds (ETFs), including funds exposed to the Chilean and Mexican pesos, as well as an overall LatAm local currency vehicle. The funds will provide exposure to changes in the value of the local currency peso relative to USD by investing in short term securities and instruments designed to provide exposure to local FX and rates. They will do this by primarily investing in short term US money market securities and forward currency contracts and swaps to create positions economically similar to a money market security denominated in pesos. They will maintain a weighted average portfolio maturity of 90 days or less and will not purchase any security with a remaining maturity of more than 397 calendar days. Performance is expected to be closely tied to social, political, and economic conditions in Chile and Mexico, and be more volatile than more geographically diversified funds, says Wisdom Tree. Dreyfus, a unit of Bank of New York Mellon, will be the sub-adviser of the ETFs. WisdomTree is also launching separate BRIC and LatAm currency funds. The LatAm vehicle will pick a basket of up to 10 currencies from a pool of eligible currencies to provide a representative and diversified proxy, balancing liquidity and geographic and economic diversity. David Kwan and Zandra Zelaya will be the portfolio managers of the proposed ETFs.