Belize faced the end of a 30-day grace period to make a $23m coupon payment Wednesday afternoon, with no immediate news as to whether any agreement has been reached with creditors. More details were expected today, according to investors following the process. Prior to entering the grace period last month, the government released three possible restructuring scenarios involving haircuts and maturity extensions. However, Belize has not seemed in urgent need to reach a compromise, saying it does not anticipate a need to borrow externally in the near future. There is $544m outstanding in Belize’s 2029 Superbonds.
Category: Regions
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Mexichem Advances FO
Mexichem has received shareholder approval for the issuance of new stock, it says, paving the way for its planned equity follow-on. The transaction is awaiting launch, and expected to do so as soon as this month ahead of a likely October pricing. The Mexican industrial conglomerate’s approval covers an issue of 260m shares, an amount that would raise MXP16.06bn ($1.25bn) at Wednesday’s MXP61.77 closing price. Citi, HSBC, JPMorgan and Morgan Stanley are managing the transaction. The equity sale follows the raising of $1.15bn in the international bond market earlier this month. The offering of 10 and 30-year bonds received $17bn in orders.
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Aval Raises $1bn
Colombia’s Grupo Aval has become the latest LatAm borrower to cash in on strong investor appetite, particularly for Andean names, with a well-bid trade clinching a price far inside of initial talk. The group drew around $8bn in orders for the $1bn 2022 bond. The holdco for banks including Banco de Bogota priced at 99.607 with a 4.750% coupon to yield 4.800%, inside of 4.850%-5.000% guidance that was brought in from 5.125%-area talk. The bonds were trading up 0.50 points late Wednesday afternoon, according to investors. The tightening from announcement to launch took a lot off the table, but investors still found some pickup to the closest comparables. “This is not coming cheap, but is not terribly expensive,” says a participating European EM investor. He notes a “decent” pickup to Grupo Sura’s 2021 bond, trading to yield 4.4% Wednesday morning and likely the closest comp. Investors also note the trade coming wide to Aval’s existing 2017 bonds on an interpolated basis, and that the issuer is one of the stronger credits in Colombia. Some 400 accounts were heard participating in the transaction. Aval is raising funds to support investments and for general corporate purposes. Goldman Sachs, JPMorgan and Corficolombiana managed the sale, rated Baa3/BBB minus. Aval’s 2017 bond was sold in January raising $600m in its international market debut.
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Colombia’s Popular Raises Local Funds
Banco Popular has issued COP400bn ($222m) in Colombia’s domestic bond market, upsizing from COP250bn, according to a person familiar with the transaction. The Colombian bank issued COP80.9bn in 2014 bonds with an interest rate of 6.30%, COP40.6bn in 2015 bonds with an interest rate of 6.39%, and COP278.4bn in 2017 inflation-linked bonds with an interest rate of 3.69%. Demand came in around COP622bn. Popular self-led the transaction, rated AAA.
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Coltel Set for Bond
Colombia Telecomunicaciones (Coltel) has given 5.50%-5.75% yield guidance for a 10-year bond, expected to price today, according to people familiar with the transaction. The issuer is expected to issue $750m in dollars only, after considering a possible Colombian peso-denominated portion during a roadshow that ended Wednesday. With books heard already topping $5bn Wednesday afternoon, Coltel brought in pricing from earlier 6%-area whispers. Credit Suisse, HSBC and JPMorgan are managing the BB sale. The issuer merged its fixed line operations with Telefonica Moviles Colombia in June, and is 70% owned by Telefonica (BBB) and 30% by the Colombian government.
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Digicel Tender Sees Strong Support
Digicel has received acceptance from holders representing more than $1.2bn of $1.5bn outstanding in two series of 2015 bonds targeted in a buyback offer, it says, as of an early acceptance date. Its Digicel Group Limited unit has received acceptance from holders of $340m, or 82%, of its 9.125%-9.875% 2015 toggle notes and $910m, or 91%, of its 8.875% 2015 senior notes. Digicel is offering $996.25 per $1,000 principal of the 2015 toggle notes and $995.00 per $1,000 principal of the 2015 senior notes. In each case, holders who accepted before September 18 receive an additional $30 per $1,000. Citi is managing the tender offer, which expires October 2. The buyback is funded by Digicel’s recent $1.5bn sale of new 2022 NC4 bonds.
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Pacific Rubiales Enters Brazilian Farm-in
Colombian oil producer Pacific Rubiales has agreed to a farm-in agreement for four blocks in the Bloques Karoon in Brazil, with an option to take a stake in a fifth. The blocks are owned by Karoon Gas Australia, and with the agreement, Pacific Rubiales takes a 35% stake in four of them and has the option to take a 35% stake in the fifth. An upfront payment of $40m covers sunk costs and could be increased by three wells at $70m each as the process continues, with the expectation of up to some $250m total to be paid out over the next 1.5-2 years. Pacific Rubiales plans to use cash on hand or generated cash flow to fund the project, and works with internal advisors on the deal.
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Mitsui Adds GN Mexico Gas Stake
Mitsui & Co is set to purchase a 15% stake in Gas Natural Mexico (GNM), it says, spending $93m. The Japanese buyer has agreed to acquire 13.25% from Spain’s Iberdrola for $82m and another 1.75% from other shareholders for $10.8m. The move for the gas distributor expands Mitsui’s footprint in Mexico, where it is engaged in various gas-related activity, notably the Manzanillo LNG import terminal. The deal represents Iberdrola’s exit from GNM, as part of the Spanish company’s broad non-core asset sale plan, which aims to raise EUR2.5bn ($3.25bn) during 2010-2012. The completion of each transaction is subject to regulatory approvals. Gas Natural and a subsidiary control 70.9% of the Mexican unit.
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Maestro Seeks to Move up Pricing
Peru’s Maestro is targeting a $180m 7-year NC4 bond, according to people familiar with the process, and may price as soon as Friday. Though on a roadshow scheduled to end next week, the home improvement retailer is heard having opened the order books – already oversubscribed as of Wednesday – and to be considering bringing the deal this week. The Ba2/BB minus issuer is raising funds to address some $100m in debt and fund approximately $80m in capital expenditures, in addition to general corporate purposes. Bank of America Merrill Lynch and JPMorgan are managing the transaction.
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CAF Returns for Tight Retap
Corporacion Andina de Fomento (CAF) has emerged with a $407m retap of its 2022 bond, seeing total demand of $1.23bn and clinching a tight price. The Aa3/A+/A+ regional development bank reopened the 4.375% coupon bonds at 107.907 to yield 3.412%, or UST+160bp, at the tight end of 165bp-area (+/-5bp) guidance that followed earlier 170bp price thoughts. Investors looking at the deal report that frequent issuer gave up very little in the trade. “We like the strong credit, but we did not like the [lack of] premium to the existing 2022s. They have to give us a little something,” says a portfolio manager following the sale who saw the 2022 bond trading at T+170bp. An official at the issuer notes a concession “flat to slightly inside” secondary levels. Repeating a common theme in DCM deals this year, investors say the issuer is able to achieve such a stingy pricing level due to the amount of excess cash they have to be put to work. Proceeds from the issuance are mainly to be used for budgetary purposes. Deutsche Bank, Goldman Sachs and HSBC managed the transaction. The sale brings the total outstanding size to $1.5bn. The notes were originally sold in June at a UST+282.5bp yield, part of a $600m cash sale that came along side an offer to holders to exchange CAF’s 2019 bonds for the 2022s. CAF also took advantage of a rating upgrade last month to raise CHF300m ($313m) in the Swiss market. CAF officials said at the time of the Swiss trade that the lender continues to analyze the USD, EUR, GBP and JPY markets, and does not rule out another CHF transaction before the end of the year. Elsewhere in the DCM, Colombia’s Coltel is scheduled to end a roadshow today, and BTG Pactual is meeting accounts through tomorrow, ahead of what is expected to be a 10-year Tier 2 sale.