Colombia’s central bank is largely expected to hold rates today at 4.75%. Barclays anticipating a hold in rates for the rest of the year after two 25bp cuts. “The stronger-than-expected GDP growth in Q2 supports our call that Banrep will keep rates unchanged for the rest of the year,” it says. Citi also forecasts a hold, though notes that economic deceleration could mean more changes are yet to come, saying “we do not think that in terms of rates we have reached the bottom of the monetary policy easing cycle yet.”
Category: Regions
Posted inDaily Brief
Panama Clinches Road Securitization Sequel
Panama’s Empresa Nacional de Autopista (ENA) returned to the dollar markets to raise a $600m though a toll road securitization. In a follow-up to a similar sale involving a different asset last year, the government-owned entity got about $1.5bn in demand for the 28-year bond with a 6.86-year average life. “ENA came at a substantial premium to the sovereign. This is a big pickup for something that is pretty conservative in structure,” says a New York-based EM investor, who spots Panama’s 2020 bonds – the closest comparison with respect to average life – trading at 2.20% yield. The deal priced at par with a 4.95% coupon, to yield at the tight end of 5%-area (+/-10bp) guidance. Participation was heard coming from 70 accounts, with the buyers comprised of fund managers (45%), pension and insurance funds (25%), banks and private banks (25%), and the remainder of other investor types. US-based accounts made up roughly 58% of buyers, Panamanians 25%, Europeans 15%, and Asians 2%. The bonds are secured by toll revenues from the currently operational portion of the Corredor Norte road in Panama City. Moody’s projects full amortization of the notes in 2023, prior to legal maturity. The Baa3 deal features no mandatory amortization and a 100% cash sweep, with additional bondholder protections including a debt reserve, major maintenance reserve, and a capex reserve. HSBC and Global Bank managed the sale. The government is supporting the transaction by putting approximately $100m of equity into the unit. ENA was formed to acquire and manage companies that have road concessions from the government. In August last year, ENA raised $395m through a 2025 bond yielding 5.75% and a 2019 priced to yield 5.25%.
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Bus Operator Plans MXP Securitization
Mexican inter-city bus company IAMSA is preparing a $3.5bn ($272m) secrutization for the domestic bond market, according to sources familiar with the transaction. The 15-year deal is backed by future ticket sale revenue, and will raise funds to repay bank debt. Santander is managing the transaction, rated AAA on a national scale and expected in late October.
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Infonacot Retaps
Mexico’s Instituto Fonacot has reopened its 2014 domestic bonds for MXP1.15bn ($90m), according to a source familiar with the transaction, to yield TIIE+38bp. The total book was about MXP4.5bn, and the sale drew 60% institutional participation, with the rest coming from private banks. BBVA Bancomer and Scotia managed the transaction, rated AAA on a local scale. The Mexican state-run lender priced the original MXP1.67bn 3-year bonds at TIIE+65bp in December 2011, and in March emerged for another MXP1.15bn at the same spread.
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Mexico to Sell Segregated Bonds
The Mexican government plans to begin selling segregated inflation-linked bonds, the finance ministry says, allowing investors to buy and trade the interest payments separately from the principal. The Hacienda plans to include segregated auctions for 10 and 30-year Udibonos among its regular debt auctions in 4Q. It does not indicate dates.
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Volkswagen Leasing Readies Local Bond
Volkswagen Leasing is preparing a MXP2.5bn ($195m) bond issuance in Mexico’s domestic market. The auto lender is expected to price the floating-rate deal of up to four years during the week of November 5. Santander and Bancomer are managing the deal, rated AAA on a local scale. The issuance is guaranteed by parent VW Financial Services.
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Agriculture Fund Preps MXP Bond
Fondo Especial para Financiamentos Agropecuarios (FEFA) plans to issue up to MXP3bn ($233m) in the Mexican domestic bond market October 2. The trust managed by development bank Fideicomisos Instituidos En Relacion Con La Agricultura (FIRA) plans to issue 3-year bonds paying a spread to the TIIE. Proceeds would fund operations. Established in 1954 by Mexico’s federal government, FIRA offers credit and guarantees among other services to livestock, fishing forestry and agribusiness sectors in Mexico. Banamex, BBVA Bancomer and HSBC are managing the AAA rated transaction. In a May domestic market debut, FEFA sold MXP3bn in 3-year bonds at TIIE+25bp.
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Credito Real Plots Share Listing
Mexico’s Credito Real has joined the list of prospective Mexican equity issuers and is targeting an IPO, according to regulatory documents. The specialist in payroll, group microbusiness and durable goods loans plans an offering with US and Mexican tranches, but does not indicate size or timing. The sale is to include primary shares as well as secondary shares sold by investors including Nexxus Capital – the largest holder with 18.3% – and a fund linked to Banco Invex. Deutsche Bank and Barclays are managing the international portion, joined by Banorte-Ixe on the domestic tranche. Proceeds are for general corporate purposes. Targeting Mexico’s underbanked lower and middle classes, Credito Real grew by 63% during 2009-2011, and booked revenue of MXP1.0bn ($78m) in the 12 months to June 30. Founded in 1993, it has funded itself through investment such as Nexxus’, in 2007, and in the local debt markets. Last year it acquired payroll lender Credifel. Credito Real was heard considering an IPO since at least last year, but may find conditions more receptive to Mexican issuers if strong economic forecasts continue for Mexico and larger equity deals from the likes of Santander Mexico, Mexichem and Pinfra go well.
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Ecopetrol Advances Local Debt Plans
Colombia’s Ecopetrol is seeking regulatory authorization to issue domestic bonds in order to increase its financing options, says a source familiar with the state oil company’s plans. Companies that register can issue within three years, the source says, adding that the request for authorization doesn’t necessarily mean a deal is on the way. The state-controlled Colombian oil producer – one of the few local non-financial issuers to make use of the local markets – last issued domestically in 2010, selling $556m-equivalent in 5, 7, 10 and 30-year bonds.
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Infonacot Talks Price
Mexico’s Instituto Fonacot is heard looking to pay TIIE+50bp-area for a MXP1bn ($78m) second reopening of its 2014 domestic bonds. The sale is scheduled for Thursday. A 15% greenshoe is possible. The Mexican state-run lender priced the original MXP1.67bn 3-year bonds at TIIE+65bp in December 2011, and in March emerged for another MXP1.15bn at the same spread. Scotia and BBVA Bancomer are managing the transaction, rated AAA on a local scale.