Issuance of offshore Chinese rinimnbi (RMB) bonds, or Dim Sum bonds, is coming back into focus for LatAm bond issuers, with Central American development bank Cabei adding itself to the list. Cabei is considering a RMB300m-RMB500m ($48m-$80m) transaction with a 3-year or 5-year tenor in what would be its debut in the market, Treasurer Jose Felix Magana tells LatinFinance. It sought to issue in the offshore RMB market last year, but held back as it wanted to first see improvements in swap rates. The issuer has yet to select banks and expects to do so early next year, he says. It has looked at America Movil’s and Korea Development Bank’s RMB-denominated transactions as two interesting reference points for exploring the market. Cabei is also considering a euro-denominated issuance and a Mexican domestic market transaction in the near future. The MXP transaction would likely be a 5-year sale of up to MXP1.5bn in 2Q 2013. Cabei is coming off of an S&P upgrade to A from A minus in August. Cabei’s most recent international bond was a $250m 2017 dollar bond, priced to yield 4.075% in February. Fellow development bank CAF is also looking at a Dim Sum bond. Santander Chile held investor meetings in Hong Kong and Singapore last week, and is said to be still in discussion with investors for an issuance as soon as this week. Deutsche Bank, Goldman Sachs and Standard Chartered are managing. America Movil was the regional debutant in the market in February, and was followed by Banco do Brasil.
Category: Central America
Puma Nears Close
Puma Energy, a subsidiary of commodity trader Trafigura, is heard looking at a closing by the end of the month for its $330m 5-year syndicated loan. The funds will be used to pay for the acquisition of gas stations and storage facilities in Central America and the Caribbean from Exxon completed earlier this year. Citi is leading the deal.
Puma Looks to Close Loan
Puma Energy, a subsidiary of commodity trader Trafigura, is expected to close a $330m, 5-year syndicated loan within 2-3 weeks. The funds will be used to pay for the acquisition of gas stations and storage facilities in Central America and the Caribbean from Exxon completed earlier this year. Citi is leading the deal.
Guatemala Telecom JV Gets IFC Funds
Guatemala-based communication tower operator Continental Towers will receive a $120m IFC loan facility, the IFC says. The facility is divided into 2 senior secured tranches, a $50m, 6-year tranche taken by regional Infrastructure lender CIFI, HSBC and Banco General, and a $70m, 10-year tranche funded by IFC ($40m) and Netherlands-based development bank FMO ($30m). Interest rates are determined by a spread over Libor, with additional compensation for the 10-year tranche. This is IFC’s first transaction with Continental Towers, a joint venture between Guatemala’s Terra Towers and Credit Suisse, and funds its further expansion in the region. The investment will be used to double the number of towers that Continental Towers operates in Central America, as well as to finance its growth into Nicaragua. Continental Towers is present in Costa Rica, El Salvador, Honduras, Nicaragua and Panama.
Mapfre Takes All of CentAm Holdco
Spain’s mapfre has agreed to buy the 35% that it doesn’t own in the holdco for its Central American business from Panama’s Grupo Mundial, it says. Mapfre Mundial, as the holdco is known, contains the insurer’s operations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. It does not disclose the value of the transaction, and does not respond to requests for comment. Mapfre bought the initial 65% from Mundial in 2009.
Colombian Gets CentAm Paint Assets
Colombia’s Compania Global de Pinturas (Pintuco) has agreed to buy the Central American paints business of US Global adhesives company HB Fuller for $120m, HB Fuller says. The American company is shedding the business it has owned since 1967 because paint is no longer core to its strategic plan. The CentAm assets generated revenue of $114m and Ebitda of $13.3m in 2011. The transaction is expected to be completed within 60 days. Pintuco, part of Grupo Mundial, has a presence in Colombia, Venezuela, Ecuador, Costa Rica, Panama and the Caribbean.
CABEI Signs $65m Loan With German KfW
The Central American Bank for Economic Integration (CABEI) has signed a 10-year, $65m bilateral loan with German development bank Kreditanstald fur Wiederaufbau (KfW) for renewable energy and regional infrastructure as it relates to green projects. The loan has a 3 year grace period and a competitive interest rate over Libor, says a person familiar with the deal. CABEI and KfW declined to elaborate on the interest rate. KfW has a history of financing development with CABEI since 1969, which over the last 10 years has funded some $400m in small and medium enterprise, renewable energy, infrastructure and health projects, adds a person familiar with the deal.
Digicel Sees Tight Trade
Digicel Limited has raised $250m in new 2020 bonds, landing its lower coupon since a 2009 issuance of 8.25% $800m 2017 bonds. The Caribbean telecom priced the 8NC4 notes at par to yield 7% or T+ 503bp in line with 7.00%-7.25% guidance. “Too tight and below fair value,” says one EM investor, who comped against Digicel’s existing 2017s, which were being quoted at 105 or at 6.65% on a yield-to-worst basis. Based on that, he calculated fair value at 7.6% calculated fair value without a new issue concession. Proceeds are marked for general corporate purposes. Citi, JPMorgan, Credit Suisse, Deutsche Bank and Barclays led the B/B1 rated transaction. The issuer sold the 2017 notes through Digicel Limited in December 2009 at an 8.50% yield, to fund a buyback of more expensive 9.25% of 2012 bonds. The bonds were trading at 100.25 on the break, says an investor.
CAF Prints Swiss Deal Ahead of European Meetings
Regional development CAF took advantage of improving swap rates from CHF to USD Friday to tap the Swiss franc market Friday with a CHF125m ($136m) 2-year floater. Given the lengthy period required for settlement to come into effect in Switzerland – in this case February 24 – the borrower wanted to jump now before numbers grew stale. Leads were able to anchor the trade with some reverse enquiry and a CHF100m size only to upsize it later as more investors expressed interest in the paper before pricing at par to yield 3-month CHF Libor+125bp. Demand came primarily from bank treasuries seeking short-dated FRNs for their own portfolios, with some private banking participating as well. Ratings are A1/A+/A+ (stable/positive/stable) by Moody’s S&P and Fitch. BNP Paribas acted as sole lead. This comes as HSBC takes CAF to see investors in Europe this week to update them on the credit.
Cabei Returns to USD Market after Three Year Hiatus
Central American development bank Cabei tapped both the international and local markets Thursday to raise $367m in one fell swoop. The borrower returned to the dollar markets for the first time since 2009, tempted by what remain ultra-low yields and the strong performance of recent deals. Cabei priced a $250m 5-year at 99.104 with a 3.875% coupon to yield 4.075%, at the tight end of 4.125% area guidance (+/-5bp). Capped at $250m, the deal saw largely buy-and-hold accounts participate, driving demand up to 3x. Appetite for the paper largely came from the US, but there was also strong participation from European accounts familiar with the name now that Cabei has made several forays in the Swiss franc market. Ratings are A2/A minus. Citi and HSBC acted as bookrunners. The deal came as Cabei also issued MXN1.5bn ($117m) in the Mexican domestic bond market yesterday. The 3-year bonds pay TIIE+15bp, in line with expectations, and the issue saw MXN2.4bn of demand. Banamex led the sale, rated AAA on a national scale. Buyers were said to be a diversified mix. Proceeds from both deals are expected to be used for general corporate purposes.