More borrowers are set to follow the Dominican Republic and Brazil’s Samarco into the debt capital market amid a moment of stability
Category: Regions
Posted inDaily Brief
Cement Company to Meet Buyside
Guatemala’s Cementos Progreso is readying fixed-income investor meetings ahead of what would be its debut international bond sale. Fitch assigns a BB+ to a senior secured 2023 of up to $300m. The cement company will meet accounts in Santiago, Lima, New York, London, Boston, Switzerland, Los Angeles and Miami through October 28. A 144A/Reg S transaction may follow subject to market conditions. Deutsche Bank is managing. Peter Giesemann, Progreso’s corporate finance head, told LatinFinance in July that it sees Peru’s Cementos Pacasmayo (BB+/BBB minus) as a potential reference point. Pacasmayo generated $2.5bn in orders for a $300m bond in February, printing a 2023 at a 4.625% yield well below expectations. 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.
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Avianca ADS Sale Takes Off
Avianca has launched the equity sale marking the debut of the ADS representing preferred shares of the Avianca Holdings entity, targeting more than $500m in a November 5 pricing. The airline is offering 12.5m primary ADS and 14.7m secondary ADS at $17.00-$20.00 each, according to regulatory documents, meaning a $579m sale at the midpoint if a 15% all-secondary greenshoe is included. The shares represent 250.6m Avianca Holdings preferred shares. The secondary portion is to be sold by former Taca executives Juaquin Palomo and Alfredo Ratti and the entities representing the controlling Eframovich brothers and Kriete family. The Eframovich brothers should control a position equal to 78% of the common stock following the deal. The Panama-domiciled Colombia-listed holdco is raising funds to modernize the Avianca-Taca fleet. JPMorgan and Citi are leading the transaction, joined by UBS, BTG Pactual and Deustche Bank. Avianca and Taca merged in 2010, and the domestic IPO of the preferred shares raised $283m-equivalent in 2011.
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Macquarie Fibra Names CFO
Fibra Macquarie Mexico has named Simon Hanna as CFO, it says. He comes to the role from his post as CEO of the Macquarie Russia & CIS Infrastructure Fund. He takes over for Finance Director Amberly Turner, who stays on with the fund in a different finance-related capacity. Hanna started with Macquarie in 1999. The real estate trust launched through an IPO last year.
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US Firm to Try Fibra Market
Prologis has added its name to the Mexican equity pipeline, and is planning to sell shares in a Mexican Fibra real estate fund focused on manufacturing and logistics properties, according to regulatory documents. The Prologis Property Mexico fund plans to sell shares in a fund initially holding 177 properties in several Mexican cities. The size and exact timing remain to be determined, though an initial filing this week sets up a pricing by December if the issuer finds conditions acceptable. Banamex, Banorte-Ixe, Actinver and Credit Suisse have been hired to manage. US-based Prologis manages property in 21 countries. The most recent Fibra, Danhos, raised MXP5.98bn ($454m) earlier this month, though its pricing at the bottom of the range has kept in place concerns of Fibra oversupply. Danhos has traded down 0.1% since its pricing. Other Fibras have also fallen, with Fibra Uno and Fibra Macquarie, two of the largest, down 2.1% and 6.6%, respectively, this year.
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Peru Lender Preps Local Bond Debut
Financiera Efectiva is scheduled to sell up to PES120m ($43m) today in its first issuance in Peru’s domestic bond market, according to people following the sale. The 4-year bonds come under a PES250m program, and will be used to diversify Efectiva’s funding sources. Credicorp is the bookrunner on the transaction, which is rated A+/A+ on a national scale. Owned by Grupo EFE, Financiera Efectiva provides credit for customers of EFEs retail stores.
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DR Surprises with New Benchmark
The Dominican Republic came to the international markets to sell a new $500m 2024 bond, surprising those expecting a retap of the existing 10-year. The sovereign was working under a $500m authorization, and a finance ministry spokesperson had told LatinFinance earlier this month that a new benchmark bond or retap was under consideration. “It is odd they issued a new 2024 after issuing one earlier in the year, but at the same time there is not the same appetite for duration as there used to be back in April,” says one west coast EM portfolio manager, noting that a bond longer than 10 years might have previously been in consideration for its market return. The investor notes the new bond came about 30bp wide to the existing 2024. Monday’s 2024 bullet bond priced at par with a 6.60% coupon, at the tight end of 6.60%-area guidance that followed 6.75% initial price thoughts. The bond traded up 0.75 points in the grey Monday afternoon, according to an investor. The Dominican Republic is raising funds to finance infrastructure projects and support other sectors of the economy, as well as boost dollar liquidity in the country and ease currency depreciation. Citi led the transaction, rated B1/B+. The $1bn 2024 amortizer sold in April was the country’s largest-ever sale.
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Colombia targets “10% to 25%” foreign holdings of TES: Janna
Colombia hopes to increase the amount of local currency debt sold internationally, despite peso depreciation cutting appetite
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Costa Rican Bank Hits the Road
Banco Nacional de Costa Rica (BNCR) plans to start fixed-income investor meetings today, according to people familiar with the matter. The Costa Rican lender is visiting accounts in Lima, Santiago, London, New York, and finishes in Los Angeles and Boston Thursday. Ratings agencies see a $500m size as likely and assign Baa3/BB+. The tenor remains to be defined. Bank of America Merrill Lynch and JPMorgan are managing the process. State-run Banco Nacional de Costa Rica is the country’s largest bank, providing an array of personal, corporate and SME development banking products and services. The bank operates a network of more than 170 offices and more than 400 ATMs nationwide.
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Fovissste Nears RMBS
Mexican government housing lender Fovissste plans to raise up to MXP5.5bn ($419m) through a domestic RMBS sale October 22, according to people familiar with the plans. Fovissste initially targeted a sale last week. The 26-year fixed-rate bond is denominated in UDIs and comes with a 23.2% partial guarantee from Mexico’s Sociedad Hipotecaria Federal (SHF). Proceeds will fund Fovissste’s lending. Banorte-Ixe, CI Casa de Bolsa and Actinver are managing the sale, rated AAA on a national scale. Fovissste last visited the local market in May, raising MXP6.87bn in a UDI-denominated 2043 issue which was priced at 2.58%, or Udibonos+180bp.