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.
Category: Regions
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Hochschild Loan Moves toward Close
Peruvian miner Hochschild is in the process of syndicating a $340m bridge loan, according to people familiar with the process. Bank of America, BBVA and Goldman Sachs are leading the 1-year facility, with pricing based on a ratings grid at Libor+350bp out of the box. It is expected to close by the end of this month. Earlier this month, Hochschild launched an operation to acquire International Minerals, owner of 40% of the Pallancata mine and Inmaculada advanced project in Peru, for $298m, with funding coming through the bridge facility and a $73m equity placement done earlier this month. In the acquisition, International Minerals holders were to receive $2.38 per share and one share in a new spinoff company holding International’s non-Peru assets. The target’s shareholders were to vote on the deal in November or December. Bank of America Merrill Lynch and Goldman Sachs managed the placement of shares.
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Davivienda Increases Bond Program
Banco Davivienda’s board has approved an increase of its bond issuance program to up to COP6.0trn ($3.1bn), the Colombian bank says in a filing. The documents modify a previous program of COP3.0trn. Davivienda has three years to use the funds, and may issue ordinary or subordinated bonds. The bank last issued in the domestic market in February, raising COP500bn.
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CFE Refreshes Curve
Mexico’s Comision Federal de Electricidad (CFE) took advantage of improving sentiment following the end of the US shutdown, to raise $1.25bn in new bonds. The government electricity monopoly drew $7.7bn in orders for the 2024, according to people following the sale. Starting wide at UST plus mid-260s talk, CFE slashed guidance to 240bp (+/minus 5bp) before launching at 235bp. The Baa1/BBB/BBB+ bond priced at 99.427 with a 4.875% coupon to yield 4.948%. “Price talk started cheap offering around 40bp, and the issuer walked down to 240bp to finally offering a tight concession. Despite tightening, investors feel comfortable with the credit risk even though a lot of value has been taken away,” says an investor following the trade who spotted CFE’s 2021 bonds trading at a g-spread of 222bp and calculated a 13bp concession. Bankers familiar with the transaction saw an 8bp concession versus a g-spread of 227bp for the 2021. The deal attracted high quality accounts from the US, Europe, Latin America, according to people following. Barclays, Citi and Goldman Sachs managed the deal, which followed three days of investor updates. The transaction follows a $900m-equivalent domestic market bond in June and a $750m 30-year international bond sold last year. Ahead in the DCM, Banco do Brasil is still considering a new euroyen bond, and Brazil’s JBS and Chile’s Entel are meeting investors ahead of deals that could arrive as soon as next week.
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Interacciones Sale Relies on Domestic Buyers
Domestic buyers accounted for more than 80% of the book on Grupo Interacciones’ MXP4.2bn ($327m) equity sale, according to pricing documents. The Mexican specialist in public sector and infrastructure lending received 2x demand in the “re-IPO” follow-on Wednesday, done to increase the issuer’s overall float and raise funds for expansion. The Mexican specialist in public sector and infrastructure lending sold 39m primary shares and 30m secondary shares at MXP61.00 each, towards the bottom of the MXP60.00-MXP69.00 range. Secondary share sellers included controller Carlos Hank and members of his family, who saw their holding reduced to 69% from more than 90%. Barclays and Credit Suisse were global coordinators, with Banorte-Ixe and GBM as bookrunners on the domestic portion.
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Bimbo Hires for Local Debt
Mexico’s Bimbo has filed a shelf and hired managers to issue up to MXP20bn ($1.56bn) in the domestic bond market, according to regulatory documents. It has not yet indicated details about the first transaction. Banamex, Bank of America Merrill Lynch, BBVA Bancomer, Santander, HSBC, Inbursa and JPMorgan have been hired in association with the program.
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CFE Ends Roadshow
Mexico’s Comision Federal de Electricidad (CFE) has ended its investor meetings, with no updates on a potential transaction as of late Wednesday. DCM bankers say there is appetite for investment-grade issuers, and hope for clarity as soon as today regarding the US debt situation that has made borrowers timid in the last few weeks. Barclays, Citi and Goldman Sachs managed the investor meetings. CFE’s last foray into the international markets was a $750m 30-year done last year, though it raised $900m-equivalent in the local market in June.
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Interacciones Re-IPO Prices Near Bottom
Grupo Interacciones has priced near the bottom of the range an equity sale that should raise MXP4.2bn ($327m), according to people familiar with the transaction, viewed as a “re-IPO.” The Mexican specialist in public sector and infrastructure lending is selling 39m primary shares and 30m secondary shares, assuming the use of a 15% all-primary greenshoe, at MXP61.00 each. The issuer had elected to set a MXP60.00-MXP69.00 range despite the trade not technically being an IPO, as less than 10% of the shares were in the hands of non-controllers. It was not immediately clear Wednesday night what portion of the shares were placed with international versus Mexican buyers. In addition to expanding its free-float, the financial group anchored by Banco Interacciones is raising proceeds to expand operations, specifically sub-sovereign and infrastructure lending. Secondary share sellers include controller Carlos Hank and members of his family. The issuer expected a free float of at least 31% following the sale, with the Hank family taking its stake from 90% to below 70%. Barclays and Credit Suisse were global coordinators, with Banorte-Ixe and GBM as bookrunners on the domestic portion. The transaction would appear to wrap up the Mexican new equity issuance scheduled for the September-October window. Brazilian Ser Educational is scheduled to price a BRL700m ($321m) IPO Friday.
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Local Majority in Lala IPO
Mexican buyers made up the majority of Grupo Lala’s MXP14.06bn ($1.01bn), according to pricing documents, with international buyers accounting for 43%. The transaction drew more than 8x demand Tuesday and priced 511 primary shares, assuming a 15% greenshoe, at the top of a MXP23.50-MXP27.50 price range. Lala is raising funds to repay bank debt and to fund its growth plans, which include investments in its existing capacities as well as possible acquisitions in Mexico, Central America and “new geographies.” JPMorgan was global coordinator, joined by Morgan Stanley and BBVA as bookrunners and Santander, Inbursa, Banorte-Ixe and Banamex as co-managers. The shares traded up 7.6% Wednesday.
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OGX Shuffles Leadership amid Negotiations
OGX Petroleo e Gas Participacoes has replaced CEO Luiz Carneiro with CFO Paulo Amaral, it says, as it meets with creditors ahead of default deadline at the end of this month. Amaral will retain his CFO and IR director roles. Angra Partners, already advisor to controller Eike Batista at the EBX level, has been appointed to take over OGX’s restructuring. With little cash to pay interest or fund operations, OGX is discussing restructuring options with holders of its $3.6bn face value of international bonds, which may involve the contribution of fresh equity funds to keep the Tubarao Martelo field operating. OGX missed an interest payment October 1, and would officially become LatAm’s largest ever corporate default once the 30-day grace period expires. Blackstone and Lazard are also advising OGX.