Now that that Itau has fully integrated operations with Unibanco’s, the bank can focus a bit more on ex-Brazil growth, its CEO says. “We are very interested in expanding our operations in Latin America in general. It is a natural path for Itau. In the coming years we will probably be more aggressive than we have been in the last five years,” Roberto Setubal tells LatinFinance. The bank started up Colombian operations late last year, adding to Chile, Uruguay, Paraguay and Argentina. He says Itau is next looking at Mexico and Peru, though there is no specific indication of timing for the full establishment of a presence in those markets. The last five years have been focused on integrating Itau and Unibanco after their 2008 merger, and with that “fully finished,” he says the bank is able to turn its focus to matters of expansion.
Category: Regions
Mexican Bank Preps Securitization
Mexico’s Consubanco plans to raise up to MXP1bn ($77m) through a domestic ABS bond transaction, according to people familiar with the deal. The Mexican bank is selling 5-year floating-rate bonds securitized by payroll deduction loans. Pricing is tentatively scheduled for November 6. The lender plans to use proceeds for general corporate purposes. Scotiabank is managing the deal, rated AAA on a national scale. In May, it sold MXP600m ($48m) in its domestic bond market debut, getting a TIIE+300bp level on a 2015 bond.
Upsized Progreso Bond Trades Up
Guatemala’s Cementos Progreso generated $2.2bn in orders for its $350m international bond debut, upsizing by $50m and tightening down yield while still seeing an aftermarket pop. The 2023 NC5 senior unsecured bond priced at 98.253 with a 7.125% coupon to yield 7.375%, at the tight end of 7.375%-7.50% guidance and earlier mid-to-high 7% talk. The bonds were trading up 2 points late Tuesday, according to investors. “Progreso was tight for what it was, but apparently I’m in a distinct minority,” says a New York-based portfolio manager following the sale and noting robust demand. A new bond from Mexican comp Grupo Cementos Chihuahua (GCC) might price near 8.0%, notes a banker away from the deal, spotting a 7.11% yield Tuesday on GCC’s 2020 bond and adding 80bp for curve extension and new issue premium. “But Progresso should price inside Chihuahua (B/BB-) given a higher rating, lower leverage, higher margins, and a better market position,” the banker says. Progreso plans to use proceeds for debt refinancing, capital expenditures and general corporate purposes. Cementos Progreso is the market leader in Guatemala’s cement industry, with a market share of 84% during the first half of 2013 in terms of volume sold, and is the only clinker producer in the country. Progreso was founded 1899 by Carlos Federico Novella Klee, who built one of the first cement plants in Latin America.
Mexican Miner Sets Targets
Several issuers in LatAm are preparing to test high-yield appetite, with Mexico’s Cobre del Mayo (CDM) targeting sub-11% pricing for a $200m-$250m bond with a likely 5-year tenor, executive chairman John Detmold tells LatinFinance. The B3/B Mexican mining company is scheduled to start a roadshow today for what would be its international bond market debut. CDM would refinance most of its total debt of $210m with the proceeds, pushing out the maturity profile to 2019. It also has a $100m undrawn unsecured revolving credit facility available from Banco Azteca expiring in 2021. Cobre’s liquidity position is sufficient for the rating category, according to Fitch ratings, which notes a $6m cash and marketable securities position, $22m in short-term debt, and total debt-to-Ebitda of 2.1x. Jefferies, BCP Securities and Nomura are managing the RegS-only process, in which the issuer will visit four continents through next week. The issuer operates Mexico’s third-largest copper mine, Piedras Verdes. CDM is 71.24% owned by Frontera Copper Corporation (FCC) of Canada, a company in turn 100% owned by the Mexico’s Invecture Group, with the remaining 28.76% owned by Lawrie Associates. Opening in 2006, development of Piedras Verdes was suspended in 2008 due to low copper prices, sold to Invecture in 2009, and restarted.
Peruvian Holdco Preps Bond
Andino Investment Holding (AIH) is expecting to raise $130m from a sale of senior unsecured notes due 2020, according to Fitch which assigns a BB minus rating. The Peruvian logistics company has mandated Bank of America Merrill lynch, Creditcorp Capital and Goldman Sachs to arrange a series of fixed-income investor meetings, according to people familiar with the process. AIH was scheduled to start Monday in Santiago and visit London Switzerland, Lima, New York, Miami and Los Angeles, finishing Friday. The 144a/RegS senior unsecured issuance may follow, subject to market conditions. Proceeds from the debt issuance will be used to repay $86.5m in existing bank debt and finance $43.5m in capex. AIH raised $43m in the ECM in 2012, and also sold $110m in bonds at its Terminales Portuarios Euroandinos unit, in a sale managed by Goldman Sachs. Fitch notes the issuer’s strong market position, a positive trend in operational results, stable Ebitda margins and high financial leverage, and it expects adequate liquidity post-issuance.
Cement Company Aims for Sub-7
Guatemala’s Cementos Progreso is indicating initial price thoughts of 7% for a $300m 2023 NC5 bond pricing as soon as today, according to sources following the deal. The BB+ cement company concluded a US, European and LatAm roadshow Monday. Deutsche Bank is managing. Comps include Mexican Grupo Cementos Chihuahua’s (BB minus) 2020 NC3 bond, trading Monday to yield 7.37% and Cemex’s (B/BB minus) 2023, trading around 6.99%. Progreso, founded in 1899, produces and distributes cement and construction materials. It held a $30m private placement in 1998, led by Citi, and has also raised domestic debt.
Salsa Maker Plans Domestic Bond
Grupo Herdez is planning to issue up to MXP5bn ($388m) in Mexico’s domestic bond market November 12, according to people familiar with the transaction. The maker of salsas and other food products plans 5-year floating and 10-year fixed-rate tranches. The issuer is rated AA on a national scale. Proceeds will be used to improve Herdez’s debt profile and for general corporate purposes. BBVA Bancomer and HSBC are managing. The borrower’s last domestic deal was a MXP600m 2015 done in 2011 at TIIE+60bp.
Peruvian Lender Reaches General Syndication
Peruvian commercial bank BanBif is heard to be launching general syndication of a $100m, 3-year bullet loan this week. Further details on the terms have not yet been disclosed. This is BanBif’s first syndicated loan in the international markets. Bladex is leading the trade finance-related deal, with Citi and Santander committed as MLAs. The IFC earlier this year made a $50m equity investment in BanBif, which is rated BBB minus.
Canada Pension Fund Partners with BTG
The Canada Pension Plan Investment Board (CPPIB) has formed a partnership BTG Pactual to invest in Brazilian residential development, it says, committing $240m. CPPIB is getting a 40% stake in the JV, with BTG making an equal investment and managing the fund to get a 60% stake. The investor notes that the fundamentals of Brazil’s residential sector are “compelling,” as a growing middle class and increased economic activity should mean more demand for housing. The CPPIB invests the assets of Canada’s largest public pension fund, and already claims a CAD1.50bn ($1.44bn) real estate portfolio in brazil.
BNCR Debut Holds Own vs Benchmarks
Banco Nacional de Costa Rica (BNCR) has raised $1.0bn in its international bond debut, selling five and 10-year notes seen pricing competitively to benchmarks including Banco de Costa Rica. The transaction was heard drawing $5bn demand across the two tranches. The 100% state-owned bank priced the $500m 2018 tranche at 99.331 with a 4.875% coupon to yield 5.028%, or UST+375bp, the tight end of 387.5bp-area guidance and earlier 400bp-area initial price thoughts. A $500m 2023 tranche priced at 99.072 with a 6.25% coupon to yield 6.377%, or UST+387.5bp, the tight end of 400bp-area guidance and earlier low-400bp talk. The 2023 traded up 0.75-1.00 points in the grey Friday, and the 2018 was up about 1.00 point, a trader says. Observers away from the deal saw Baa3/BB+ BNCR pricing its new 2018 0bp-10bp wide to state-owned peer Banco de Costa Rica’s (BB+/Baa3) 2018 debut bond. “They priced flat to BCR’s 2018 and the new 10-year 125bp-130bp over the Costa Rica sovereign, and in line with what other 100% government owned banks pay in the region,” says a LatAm DCM banker away from the deal. The banker spotted the Costa Rica 2023 bond trading at g-spread of 257bp. “Impressive results getting $1.0bn in 5s and 10s,” adds another DCM banker away from the trade, seeing the deal pricing within 10bp of Banco de Costa Rica, whose 2018 was spotted at a g-spread of 367bp. “They squeezed a lot, but the 5-year came 5bp wide to Banco de Costa Rica. Given the bank’s scale, BNCR should trade inside of Banco de Costa Rica,” notes a participating EM portfolio manager. Proceeds will be used for debt refinancing, to increase BNCR’s liquidity profile and for general corporate purposes. Bank of America Merrill Lynch and JPMorgan managed the 144a/RegS deal. BNCR is the largest bank and deposit holder in Costa Rica, with a market share of 33% of total deposits.