S&P has changed the outlook on the BBB rating of Peru’s MiBanco to negative, it says, due to weakening asset quality metrics. A deterioration in borrowers’ debt-payment capacity in the last several quarters is pressuring the Peruvian microfinance bank’s bottom-line results through higher provisions and pressuring its risk position.
Category: Regions
Posted inDaily Brief
Mexicans Set For Domestic Debt
Mexico’s Fibra Uno is planning to raise MXP13bn-MXP18bn ($983m-$1.3bn) in the first-ever domestic bond placed by a Fibra fund today, say bankers familiar with the deal. The real estate fund is considering up to four tranches and may choose among a 5.5-year floating rate bond, 10-year and 20-year fixed-rate bonds and 15-year UDI-denominated notes. Proceeds will be used to refinance bank debt. BBVA Bancomer, Banamex, Credit Suisse and Santander are managing. Another deal scheduled to price today is Mexico’s Banco Interacciones, offering MXP1bn 3.5-year notes paying a spread to the TIIE benchmark. The Mexican unit of US vehicle manufacturer Navistar is also planning a MXP800m reopening of the 2018 floating-rate bonds it sold earlier in the year. Proceeds will before general corporate purposes. Actinver is managing the transaction, rated AAA on a national scale. Finally, Cultiba is also preparing to raise up to MXP1.2bn ($91m) in what would be its domestic bond market debut. The beverage company is targeting 5-year floating- rate notes to raise funds for general corporate purposes. Banorte-Ixe and Santander are managing the transaction, rated AA/AA minus on a national scale.
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Oaxaca Preps Guaranteed Bond
The Mexican state of Oaxaca plans to raise up to MXP2.76bn ($210m) in the domestic bond market, according to a regulatory filing. The 15-year bonds come with a 1.5% guarantee from funds received by the federal government and will raise funds for public investment. Banamex, Interacciones and Santander are managing the deal, with Cofinsa as structuring agent.
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Colombia Ponders GDN
Colombia is considering issuing its first global depository note to draw international investors into its local debt market, Michel Janna, Colombia’s head of public credit, tells LatinFinance. The government is advancing plans to curtail issuance of COP-denominated Treasury (TES) bonds next year by at least COP2trn ($1.04bn), opening up space for a GDN, pending an appropriate structure for dealing with the country’s 14% withholding tax. “There are a couple of banks with the idea of launching GDNs for Colombia. We encourage this: if it’s done in the proper way, there will be an advantage for the local market. It simplifies the procedure for investors to tap the local market,” Janna says. The sovereign will consider issuing hard currency debt in the new year, though timing will depend on an increase in US Treasury yields “by up to 50 basis points in the next two to three quarters” and Colombia’s presidential elections in May, he says. Further diversification of Colombia’s funding currencies is desirable, but not imminent. “It’s a possibility that we could go for euro or yen transactions at some point, but not in the immediate future,” he says. The government is establishing a centralized treasury, where public entities with high cash balances – including the airports agency, the oil agency and the telecoms fund – will be required to deposit their excess cash, instead of in TES, as has been the norm. The result will be a decline in TES issuance by public entities of at least 2 trillion pesos in 2014 and 6 trillion pesos thereafter, though the scheme, which will be fully implemented y 2015, will not impact the TES primary market.
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BdB Breaks into Switzerland
Banco do Brasil has become the latest LatAm credit to sell its first Swiss market bond, upsizing a transaction Tuesday to CHF275m ($303m) from a planned CHF200m. The 5.5-year bond was seen pricing 30bp through the government-controlled bank’s dollar curve. The Baa1/BBB/BBB borrower priced at 99.729 with a 2.50% coupon to yield 2.55%, or mid-swaps plus 190bp, in line with guidance of 190bp talk and IPT. The deal drew more than 50 accounts, with retail and private banking accounts participating and some institutional investors. Banco do Brasil, Credit Suisse and Commerzbank managed. Low rates versus USD have brought LatAm borrowers to the CHF market to raise $3.45bn-equivalent from 17 transactions so far this year, according to Dealogic. This total is well ahead of the previous record of $1.43bn in all of 2012. Banco do Brasil was also looking at a Japanese yen-denominated bond issue in the international market earlier this year, but the deal is expected to take more time due to Japanese investor concerns about the economic situations in both Brazil and Japan. Banco do Brasil, JPMorgan, Citi, Mizuho and Mitsubishi UFJ-Morgan Stanley are working on the euroyen transaction. The bank held non-deal fixed-income investor meetings in Asia in September with JPMorgan. CFO Ivan Monteiro told LatinFinance earlier this year the bank would focus on diversification of debt funding this year, with Japan and local LatAm currencies such as Chilean pesos among the options beyond euros and dollars.
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Yara Expands in LatAm
Norwegian fertilizer company Yara International has agreed to acquire fertilizer producer OFD Holding from Omimex Resources for $425m, it says. The deal includes the Abocol business in Colombia, Misti in Peru, Omagro in Mexico, Fertitec in Panama and Costa Rica, Cafesa in Costa Rica and Norsa in Bolivia – all engaged in production and distribution. Yara sees the new assets as strengthening its downstream footprint and growth platform in Latin America, and complementary to its $750m acquisition of Bunge’s fertilizer business in Brazil last year. The buyer estimates an annual synergy potential of $20m. OFD had net revenues of $796m in 2012 and Ebitda of $35m. Closing is expected during 2Q 2014 subject to approvals. Yara did not respond to a request for additional comment.
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Aeromexico Taxis out ABS
Aeromexico is looking to issue up to MXP1.7bn ($130m) in Mexico’s domestic bond market December 4, according to people familiar with the airline’s plans. The 5-year notes will pay a spread to the TIIE benchmark and are backed by future flows from credit card payments. Proceeds will be used to replace debt. Actinver, Banamex, and BBVA are managing the deal, rated AA+ on a national scale. Aeromexico issued $117m in bonds guaranteed by the US Export-Import Bank in July, but has otherwise not been a frequent borrower in the domestic or international bond markets in recent years. It raised $330m in an IPO in 2011.
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Daimler Mexico to Visit Local Market
Daimler Mexico is planning to issue up to MXP1.75bn ($135m) in 3-year and 5-year floating-rate domestic bonds Wednesday, according to people familiar with the issuer’s plans. BBVA Bancomer and Scotiabank are managing the auto manufacturer’s sale, rated AAA on a national scale. Daimler last came to market in November 2012, when it priced a MXP1bn 2015 bond at TIIE+35bp.
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S&P Negative on Sigma Euro Venture
S&P has put the BBB ratings of Sigma Alimentos on negative watch, it says, following the Mexican’s move to take control of Campofrio Food Group in Europe. The move is funded in the short term by a EUR675m ($908m) term loan. Sigma has also filed for an IPO in Mexico that could improve its credit profile following the additional debt. Sigma announced a EUR675m bid for the European meat company earlier this month. The food products unit of Grupo Alfa has signed purchase agreements with shareholders for shares representing 45.2% of the company, and plans to launch a cash tender offer to buy the remaining shares.
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Bancolombia Closer to Follow-on
Bancolombia has approved a plan under which it can sell 110m preferred shares in the domestic market, it says. A sale at the maximum size would raise COP2.72trn ($1.41bn) at Monday’s COP24,740 closing price. It is unclear if the sale would be approved by regulators in time to happen this year, and CEO Carlos Raul Yepes told LatinFinance in September that the bank would consider new equity only in 2014. Shareholders approved in March a platform to sell up to $2.4bn in preferred shares through multiple transactions. Bancolombia is looking to raise funds to help finance expansion plans and comply with new global banking regulations. The bank agreed to buy HSBC’s assets in Panama for $2.1bn earlier this year. Its most recent equity deal was a $900m follow-on earlier last year.