Colombia’s Bancoldex is expected to issue COP350bn ($192m) in the domestic bond market today, with the ability to upsize to COP700bn. The development bank can choose from 18-month, 2-year and 3-year tranches, and will self-manage the sale, rated AAA, with a group of other brokerages.
Category: Regions
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Bancolombia Adds Greenshoe
Bancolombia has added a $50m Asian-market greenshoe to its bond sale priced Tuesday, it says, bringing the total size to $1.2bn. The Baa3/BBB minus lender had priced the 2022 Tier 2 bond at 99.421 with a 5.125% coupon to yield 5.20%. The sale, through Bank of America Merrill Lynch, Citi and Morgan Stanley saw $7.7bn in total demand, including $500m for the greenshoe.
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EEB Gets Investment Grade
S&P has raised the rating of Colombia’s Empresa de Energia de Bogota (EEB) to BBB minus from BB+, it says, bringing the utility into investment grade territory. The move follows improvement to EEB’s risk profile and greater diversification. “In our opinion, the consolidation of the business strategy of EEB and its geographic reach will result in continued growth in revenue and a strong and stable profitability. We believe that this will generate stronger cash generation and better financial indicators,” says S&P. The outlook is stable.
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Mexico Readies Local Bond Syndication
Mexico’s government is planning to sell MXP14.37bn ($1.09bn) in Udibonos through a syndicated bond sale today, the finance ministry says. Following the sale, the ministry expects to reopen the 2.0% coupon 2022s at periodic auctions beginning in 4Q. Bank of America Merrill Lynch, BBVA Bancomer, Banamex, HSBC and Santander are managing the sale. In its most recent syndication, Mexico sold MXP30bn in 2017 Mbonos in July. On the corporate side of the domestic debt market, Paccar Mexico is scheduled to raise today MXP1bn in 2015 bonds, through BBVA Bancomer and Banamex. Also, Banco Multiva plans to issue up to MXP1bn in 2022 fixed-rate subordinated notes, led by Multiva and Credit Suisse.
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Santander Mexico Launches, Aims to top $4bn
Santander Mexico has launched its IPO, aiming to raise MXP49.01bn-MXP56.61bn ($3.72bn-$4.30bn), in a sale valuing the bank at more than $17bn, it says. The Mexican unit seen as one of the crown jewels of the troubled Spanish bank has set September 25 for the pricing of 1.69bn shares, including a 15% greenshoe, at MXP29.00-MXP33.50 each. The deal is divided into an international tranche of up to 1.18bn shares in the form of ADRs, representing 80% of the total transaction, and a Mexican portion made up of 294m shares. At the maximum, Santander would float 24.9% of Santander Mexico. Bankers away from and on the deal say the region’s near-term ECM hopes have a lot riding on the deal’s success, in that a well-bid sale pricing at the midpoint or higher followed by strong aftermarket performance could restore issuers’ and investors’ confidence in LatAm deals. Proceeds from the sale, set to be Mexico’s largest-ever IPO, will be used for general corporate purposes. Santander, UBS, Deutsche Bank and Bank of America Merrill Lynch are global coordinators. Itau has been added to the joint bookrunner tier since the initial filing, joining Barclays, Citi, Credit Suisse, Goldman Sachs, JPMorgan and RBC. Santander, Banamex, BBVA Bancomer and HSBC are on the domestic portion. In Mexico, Mexichem is set to follow with an up to $1bn-equivalent October follow-on, via Banamex, HSBC, JPMorgan and Morgan Stanley. Cemex is also in the pipeline with an IPO of its ex-Mexico LatAm businesses in Colombia, for perhaps $750m-$1bn. In Brazil, used car dealer AutoBrasil plans to try its luck in the IPO market.
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Investors Crowd into Bancolombia Tier 2
Bancolombia and Brazil’s Vale became the first LatAm issuers to hit the DCM in what should be an active September, with the Colombian bank raising $1.15bn on the back of $7.2bn in orders, according to bankers on the deal. Capitalizing on a scarcity value of Colombian credits, the Baa3/BBB minus lender priced a new 2022 Tier 2 bond at 99.421 with a 5.125% coupon to yield 5.20%, or UST+362.6bp, the tight end of 5.375%-area guidance that followed initial 5.5% talk. The bond was trading up about 0.75-0.90 points in the grey Tuesday afternoon, according to an investor. “The deal left little on the table but it was a win-win situation for the issuer and investors,” says a participating NY-based EM investor who saw the deal price flat to the levels on the bank’s 2020 Tier 2 bonds. Bankers on the deal spotted the 2020s prior to announcement at levels of UST+371bp on an interpolated basis, which would indicate a negative concession of about 8bp. “Good trade, no concession and smart timing,” says a banker away from the deal. Some 390 accounts participated, according to a banker on the deal. The transaction is the first from a $1.2bn debt program approved last week. Bank of America Merrill Lynch, Citibank and Morgan Stanley managed the sale, which can be increased by up to $50m during Asian hours. More LatAm cross-border issuance should be on the way this week. Issuers currently on the road include the government of Aruba and Chile’s Banco de Credito e Inversiones (BCI), which are heard looking at a $253m 11-year bond and a 2017 issue, respectively. Peru’s Maestro, Chile’s Arauco, Brazil’s Caixa Economica Federal and Panama’s Global Bank are also among the issuers in the pipeline.
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Campari Makes Jamaica Buy
Italy’s Gruppo Campari has agreed to buy control of Jamaican rum maker Lascelles deMercado, it says, in a transaction that could reach $414.8m. Becoming the latest global beverage player to buy into LatAm, Campari takes an 81.4% stake from CL Financial, and expects to get the remainder through a tender offer by the end of the year. The deal comes at around 15x Ebitda for the 12 months prior to June, the buyer says. It plans to fund the deal through credit facilities provided by Bank of America Merrill Lynch, its advisor on the deal, and Banca Intesa and Deutsche Bank. Lascelles deMercado’s brands include Wray & Nephew and Coruba. The deal follows transactions in the region including AB InBev’s purchase of the remaining 50% of Mexico’s Modelo and acquiring control of Cerveceria Nacional Dominicana for more than $1bn, both earlier this year. Diageo remains in discussions for Mexico’s Jose Curevo, which could cost it $3bn.
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GBM Clinches Infrastructure CCD
Grupo Bursatil Mexicano (GBM) has closed on a MXP750m ($57m) certificado de capital de desarrollo (CCD) transaction, representing the first close of a fund targeting MXP3.75bn, it says. The remaining 80% is to be funded through capital calls. The brokerage operator and fund manager’s 10-year deal will target investment in communications, water, transportation, oil, power and renewable energy projects. Investors are to receive their initial investment plus up to a 10% preferred return, with additional proceeds being divided 80% to investors and 20% to GBM. GBM has a track record of private infrastructure investments in Mexican companies including Grupo Mexico, TMM and Pinfra, and counts former SCT undersecretary Manuel Rodriguez as the general manager of the fund. GBM’s brokerage unit managed the sale.
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Colombia Names Ministry Replacement
Interior minister Federico Renjifo has been named Colombia’s energy and mining minister. He replaces Mauricio Cardenas, who was tapped to head the finance ministry following Juan Carlos Echeverry’s resignation. The well-respected Echeverry was a surprise late inclusion to Santos’ recent cabinet reshuffling.
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Credit Agricole Advances MXP Bond Plans
Credit Agricole is preparing to sell up to MXP2bn ($152m) in floating-rate bonds in Mexico’s domestic market. The four-year bonds will represent the second issuance from a MXP10bn program and will pay a spread to the TIIE benchmark. Pricing is expected in late September and proceeds are to be used for general corporate purposes. Banorte Ixe is managing the sale, done through Credit Agricole CIB’s Productos Financieros unit and guaranteed by Credit Agricole Corporate and Investment bank. Credit Agricole was last in the Mexican market in 2010, when it priced a 3-year floater at TIIE+30bp.