Playing on its scarcity value and hunger for paper, Coldelco has raised $1bn in new 2020 bonds at the tight end of talk. The A1/A bonds priced at 98.239 with a 3.750% coupon to yield 3.965%, or UST plus 130bp, the tight end of 135bp area guidance. “This was fairly priced, with a very limited upside, perhaps 10bp-15bp,” Diego Torres, corporate debt analyst at Santiago-based Munita, Cruzat y Claro, tells LatinFinance. Codelco’s 2019s traded around UST+115bp in the secondary market, according to investors, with the Chile sovereign 2020 giving UST plus 70bp-75bp. “With rates where they are, high-quality LatAm companies have been getting very good deals, and we have seen it again with Codelco,” says Torres. The infrequently issuing Chilean miner brought in $3.5bn in demand, according to bankers on the trade. The bonds were heard up 0.5-1.5 points in the grey at the end of the day Thursday. Codelco plans to use proceeds to partially finance capital expenditures and refinance existing debt obligations. Deutsche Bank and HSBC managed the sale. The book was about 80% US investors skewed toward high-grade dedicated accounts rather than EM, say bankers on the deal. First bond since a January 2009 sale of $600m of 2019s.
Category: Chile
Copeval Board OKs Issue
The board of Chile-based agribusiness company Copeval has approved a bond issue of up to UF2.5m ($108m) and is now seeking authorization from local regulators. The issue will be done in 2 tranches, one for up to 10 years and the other for up to 30 years. Proceeds of the non-convertible notes would be used to pay down short and long-term debt and for capex. Copeval has not selected banks to lead the process.
Itau Chile Heard Shopping Loan
Banco Itau Chile is expected to launch next week a syndicated loan. Credit Agricole and BNP Paribas are heard running the transaction and a bank meeting is scheduled for November 3 in New York. A $150m senior unsecured term loan facility is expected by bankers not on the deal. It is unclear why the bank is funding itself in Chile.
LAN Buys Colombia Airline
Chilean airline LAN says it is acquiring a 99% stake in Colombian peer Aires for $32.5m. Analysts believe the buyer will be assuming Aires’ debt, since the acquisition price seems low. LAN says the price will be adjusted according to variations in Aires’ debt between the value at closing of the transaction and the value as stated in the company’s financial statements as of August 31. “This is a very good price for a company that has a 22% market share,” says Cristina Acle, a Chile-based equities analyst with Corp Group. Felipe Mercado, an equity analyst with Banchile agrees. “Colombia, with 10m passengers a year, has double the volume of other LAN markets such as Chile and Peru,” says Mercado. Both analysts believe it is probable that LAN will pay for Aires with cash on hand. LAN reported Q3 profit of $106m. Aires, founded in 1980, is the second largest domestic airline in Colombia. It provides service to 27 domestic destinations and 3 international destinations, and has a fleet of 24 airplanes. Analysts were unable to determine the enterprise value or debt load of the privately held company. LAN officials decline to say if there were any financial advisors involved.
Telefonica Moviles Preps Debut
Telefonica Moviles, the wireless unit of Telefonica in Chile, is preparing its first dollar bond. It plans a $380m 5-year deal, according to Fitch, which assigns a BBB+ rating. It is set to start roadshowing today in Los Angeles and visit London before finishing in Boston and New York Tuesday. BBVA, Citi and Deutsche Bank are managing.
Codelco Whispers Concession
Coldelco is whispering UST plus 135bp area for a new 10-year bond expected to price as soon as today, according to investors. At that price, the new bonds would offer a concession to the Chilean state owned miner’s 2019s, trading in the secondary at about 110bp-115bp, according to investors. Codelco plans to use proceeds to partially finance capital expenditures and refinance existing debt obligations. The Chilean sovereign 10 year bond trades in the 60bp-70bp range, they say. A1/A Codelco had been roadshowing through Wednesday with Deutsche Bank and HSBC managing.
ECM Kicks Off Diversity Month
LatAm equity investors are gearing up for at least 6 scheduled deals in the next 3 weeks, including a trio on Thursday. Though only OHL Mexico’s MXP15bn IPO should turn heads in terms of size, diversity seekers will be encouraged in that only 1 in 6 is Brazilian. The group should test enthusiasm for ex-Brazil equity, which may be keen following continued Petrobras overhang and that market’s most recent IPO, HRT, trading down 6.3% in the 2 days trading since debut. Following recent enthusiasm in the bond markets for Argentina, real estate developer TGLT is set to price Thursday what would be that country’s first IPO since 2007, for $100m-$130m equivalent. The subscription period launched October 21, with a ARP9.00-ARP11.50 range for the sale of 45.4m shares, with the possibility of upsizing to as much as 61.8m. Raymond James Argentina is managing the sale. Elsewhere, Brasil Insurance is set to raise more than BRL500m Thursday, through the sale of 191,000 primary and 191,000 secondary units, with the possibility of a 15% greenshoe and 20% hot issue. The IPO – welcome as a play away from commodities – has a BRL1,250-BRL1,450 range, and is led by Morgan Stanley, BTG Pactual, JPMorgan and HSBC. Meanwhile, Peru’s Exalmar is shooting for more than $100m in what would be that country’s first domestic IPO since 2007. Elsewhere, Mexican homebuilder Sare is also looking to raise Thursday up to MXP805m through a follow-on sale of up to 317m primary units, through BBVA and Santander. Sare closed Tuesday at MXP3.10. The Mexican market is most anticipating OHL, coming between November 4 and November 11 at MXP24-MXP30, which should test appetite for size in that market. Finally, metals processor Molymet is looking to raise more than $200m, in a follow-on that would be Chile’s first deal since March.
Chilean FO Opens Books
Chile’s Molymet is set to open books today on an equity follow-on due to price November 9. The metals processor expects to raise more than $200m via the sale of a 10% stake, which is designed to increase the liquidity of its float and raise funds for expansion. The Gianoli, Mustakis and Matte families, who hold 96% of Molymet, have waived priority rights to ensure a broad sale to the public, the company says. Banchile Citi and IM Trust are managing the sale. Molymet’s 4-year expansion plan is aimed at fulfilling growing demand for molybdenum, a copper by-product used to strengthen steel, as the world economy recovers and steel consumption grows in Asia. Molymet shares closed Tuesday at CLP13, 940.
Codelco Sets Sights on 2020
Codelco is expected to issue up to $1bn in 2020 bonds, according to S&P, which assigns an A rating. The Chilean copper producer is roadshowing through today what should be its first bond since January 2009. Deutsche Bank and HSBC are managing the sale, also rated A1 by Moody’s.
Bank of Tokyo Names LatAm CIB Head
The Bank of Tokyo-Mitsubishi UFJ has named David M. Gruppo head of LatAm corporate and investment banking, a newly created position. He will report to Randall Chafetz, head of corporate and IB for the Americas. Gruppo has held LatAm corporate and investment banking positions at Goldman Sachs, Morgan Stanley and Santander. Most recently, he has been in various capacities with IBM, including its TJ Watson Research unit.