Banco Security has been authorized by the Hong Kong Monetary Authority to open a representative office in Hong Kong, the Chilean bank says. It is expected to begin operations in the first quarter of 2014.
Category: Chile
Posted inDaily Brief
BancoEstado Plans Debt Sale
BancoEstado is planning to issue up to UF2m ($88m) in Chile’s local bond market on Thursday, say people familiar with the bank’s plans. The 30-year subordinated bonds are expected to have a 3.5% coupon. BancoEstado is managing the transaction, rated AA/AA+ on a national scale. It last issued in September, when it sold UF2m in 2042 subordinated bonds. The 4.0% coupon bond priced at a premium to yield 3.49%, or government bonds plus 90bp.
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Moody’s Cuts CorpGroup
Moody’s has downgraded CorpBanca to Baa3 from Baa2 and parent CorpGroup to Ba1 from Ba3, it says. The agency is concerned that the Chileans’ association with fellow Alvaro Saieh-controlled entity SMU has “hurt the funding flexibility and risk profile of both the bank and its holding.” SMU breached bond covenants earlier this year and needed a capital injection from Saieh, who has recently announced he is considering seeking a merger for CorpBanca. Contagion from SMU has led to higher funding costs for the Corp entities. “These entities require maximum funding flexibility to execute their business development strategy in Chile and Colombia, and reduced funding flexibility could impair the growth and profitability of the bank’s franchise,” Moody’s says. It is reviewing both for an additional downgrade.
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Chilean Clinic Wraps Up Bonds
Chile’s Clinica Las Condes has sold UF1m ($44m) in 21-year domestic bonds, according to people following the sale. The bonds priced at 100.55 with a 3.95% coupon to yield 3.90%, or government bonds plus 147bp. The health services provider is raising funds for expansion projects. BICE managed the transaction, rated AA+/AA+ on a national scale.
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Chilean Raises $57m in JPY Placement
Banco de Chile has raised JPY5.8bn ($57m) through a private placement in the Japanese bond market, according to people familiar with the transaction. Issued on the back of reverse inquiry, the 2019 bond priced at par with a 1.03% coupon, to yield mid-swaps plus 65bp. Citi was sole lead. The Aa3/A+ Chilean raised a JPY11.1bn ($112m) euroyen last month in its first-ever deal in the Japanese bond market, which came at MS+50bp.
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Gildemeister Rating Drops Two Notches
Fitch has lowered Automotores Gildemeister’s rating to B from BB minus, it says, on continued deterioration in the Chilean vehicle retailer’s credit profile due to poor operational results. Gildemeister’s Ebitda margin has seen “significant deterioration” owed to a lower average price point, currency devaluations and losses at its Brazilian business. The Ebitda margin hit 4.7% in 3Q 2013, down from 9.8% in 3Q 2012. Free cash flow was negative $226m in the 12 months to September. Total adjusted debt to Ebitdar and total adjusted net debt to Ebitdar, reached levels of 7.6x and 6.9x, respectively, during the 12 months to September. This is up from 4.6x and 4.3x from a year earlier. The outlook is negative. Moody’s has the borrower’s Ba3 rating under review.
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Masisa to Meet Buyside
Chile’s Masisa plans to start fixed-income investor meetings next week ahead of a potential bond debut, according to people familiar with the matter. The BB rated producer of wood products is visiting Lima, New York, Los Angeles, Boston, New York and London Tuesday through December 13. Deutsche Bank, Itau, JPMorgan and Scotiabank are managing. CFO Carlos Toro told LatinFinance in January Masisa could look to issue a 5-year or 10-year bond this year of $200m-$250m. Proceeds would be used for refinancing the company’s outstanding debt. In September, Masisa raised UF2m ($94m) in a domestic bond transaction that was 2x oversubscribed.
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Itau Chile Clinches Bonds
Banco Itau Chile has raised UF1m ($44m) in the domestic bond market. The 2033 bullet priced at 101.33, with a coupon of 3.80% to yield 3.70%, or 129bp over government bonds. Itau managed the sale, which saw 2.7x demand. The bank will use the proceeds for lending, with a focus on mortgage lending.
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University Unveils Bond Timeline
Corporacion Universidad de Concepcion is planning to sell up to UF4.2m ($183m) in bonds in Chile’s local market during the week of December 16, according to people following the transaction. The bonds have an 8-year maturity. The issuer, a holding company for different businesses linked to the Chilean university, is raising funds to restructure liabilities and finance investment. CorpBanca leads the deal. Concepcion last issued in 2003, selling UF2m in 10-year bonds, and is heard drawn back to the market by attractive interest rates.
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BCI Adds to Swiss Funds
Chile’s BCI has raised CHF120m ($132m) in the Swiss bond market, adding to the record issuance from LatAm borrowers in that country this year. The bank follows its CHF200m debut in the currency in August, as it continues to seek a greater diversification of funding internationally. The 2015 priced at 99.941 with a 0.75% coupon to yield 0.78%, or mid-swaps plus 68bp, inside 70bp guidance, according to people familiar with the terms. BNP Paribas and Credit Suisse managed the sale, rated A/A1. The bank is pushing to increase its international bond issuance, and has plans to visit Japan to discuss a Samurai sale in 2014, Mario Sarrat, BCI’s head of international financial institutions, told LatinFinance last month.