Mexico’s Bimbo has raised MXP5bn ($393m) Wednesday through a local bond sale as it looks to refinance a $1.3bn syndicated loan. The baked goods company priced the 6.5-year fixed rate bonds at 6.83% or Mbonos +129bp, inside 140bp price talk. The transaction was heard 1.45x oversubscribed, with pension fund, private banks, mutual funds and insurance companies participating. The deal represents the fourth issuance under a MXP20bn program. HSBC, ING, and Inbursa managed the deal, rated AA plus on a national scale. Bimbo sold $800m in 4.5% 10-year notes in the international markets just last month, getting a 4.602% yield. BBVA, Citi and Santander led that transaction, rated Baa2/BBB/BBB.
Category: Regions
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Inbursa Readies Local Market Return
Mexico’s Banco Inbursa is close to raising up to MXP3.5bn ($275m) in 2-year floating-rate notes in the domestic market. Pricing is scheduled for Friday after the borrower had originally scheduled a pricing date of February 8. The issuer is heard looking to pay TIIE +20bp, in line with a December issuance of MXP3bn 2-year bonds priced at TIIE + 20bp. Proceeds will be used to fund the bank’s operations. Banamex and Inbursa are managing the transaction, rated AAA on a national scale.
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Dim Sum Market Ready for More LatAm Trades
The growing Dim Sum bond market could easily accommodate more LatAm borrowers, though followers of America Movil’s recent foray into the CNH-denominated instruments could take some time in getting there. “There will be tremendous room for Brazilian companies to come and raise capital,” says George Ding, CEO of Hua An Fund Management in Hong Kong. Hong Kong is expected to be at the center of the Chinese government’s 5-year drive to internationalize the renminbi, and more LatAm issuers could come to this market in 2012 if they so chose, he adds. Local bank deposits of some CNH630bn ($100bn) with very low rates means that investors will likely be willing to buy higher yielding LatAm bonds denominated in a currency that looks set to appreciate going forward. “There is room for more foreign issuers,” says Joao Paulo Loyola, who works in Bradesco’s fixed-income sales in Hong Kong. “We have an amount outstanding of CNH150bn in bonds, so the potential demand is 4 times.” For now, however, the Dim Sum market remains the domain of high-grade issuers only, limiting access to a broader swathe of LatAm credits. Furthermore, funding in this market is only attractive to those issuers who have some costs in renminbi. America Movil ticks both boxes, and became the first LatAm Dim Sum issuer last week after selling a CNH1bn 3-year. Ding and Loyola spoke this week at the LatinFinance Latin America Asia-Pacific Investors Forum in Hong Kong.
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Infonavit Builds its Largest RMBS
Mexico’s Infonavit sold MXP4.973bn ($391m) of RMBS Wednesday, marking its largest ever issue of this kind in the domestic markets. The state mortgage lender issued a UDI-denominated 28-year bond with 6.2 year average life that priced at 4.50% or 280bp over the government’s UDIbonos, falling in line with 4.45% area price talk. The transaction was heard 1.41x oversubscribed after over 70 accounts participated, including private banking, insurance companies, investment funds, pension funds and bank treasuries. Proceeds will be used to create new mortgages. Banamex and HSBC led the transaction, rated AAA on a national scale. Infonavit plans to issue its next bond issue, a MXP3bn in 28-year UDI-denominated bonds with Banamex and BBVA Bancomer in March or April. Infonavit’s last bond was issued in December, a MXP1.1bn 2039 that priced at UDIbonos plus 264bp, locking in the lender’s lowest coupon for the year at 4.45%. Banamex led that transaction, rated AAA on a national scale. The state mortgage lender’s deal comes under a new MXP10bn program.
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Mexichem Tests Waters with Price Thoughts
Mexichem’s is testing the waters with initial price thoughts on a 2-tranche domestic bond as it prepares to raise up to MXP5bn ($394m) as soon as February. Investors are hearing TIIE+60bp to +70bp on a retap of Mexichem’s 2016s floating rate bonds, and around Mbonos+140bp on a fixed-rate 10-year. The 2016s were originally sold in September with a MXP2.5bn size and priced at TIIE+60bp.The Mexican chemical company is raising funds to refinance debt. The issue is being led by BBVA, Banamex and HSBC. Mexichem has an AA national scale rating.
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PDVSA Misses New Petrobras JV Deadline
Venezuela’s PDVSA missed a January 30 deadline to finalize its participation in the Abreu e Lima refinery joint venture with Brazil’s Petrobras after failing to secure a $10bn loan from development bank BNDES to pay for the transaction. Failing to offer BNDES the required loan guarantees, the Venezuelan company was unable to secure the financing for its 40% stake in Abreu e Lima located in Brazil’s northeastern state of Pernambuco, a $13.36bn joint venture that was formalized in December 2005, Petrobras says. At the time of the original signature, PDVSA and Petrobras expected the project to be completed in 2011. Late last year, PDVSA said it would secure loan guarantees from its Chinese partners to finalize its participation, but it is unclear whether that ever happened. Officials at PDVSA and BNDES could not immediately be reached for comment. Petrobras has said it plans to move ahead with the project with or without the participation from PDVSA. The project has on occasion been a stone in the shoe of diplomatic relations between both countries. Venezuelan President Hugo Chavez has often publicly complained about the slow pace of the transaction, blaming Petrobras executives and at one point denouncing the BNDES loan guarantees as unnecessary.
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Occidente Preps COP Financing
Colombia’s Banco de Occidente is preparing to sell up to COP200bn ($112.5m) in subordinated bonds today in the local markets. The unit of Grupo Aval is coming out with two series linked to CPI, a 7-year and 10-year with rates capped at CPI+4.60% and CPI+4.90%, respectively. Proceeds are for general corporate purposes. The issue is rated AA+ by BRC Investor Services. Leads are Casa Bolsa, Correval, Ultrabursatiles, Corredores Asociados, Helm, Serfinco, Profesionales de Bolsa and Banco de Occidente. In September, Banco de Occidente sold COP201.2bn of domestic bonds. The offering comprised COP5.4bn in 2014 bonds paying a fixed rate of 6.65%, COP3.5bn in 2014 bonds paying IBR+1.80%, COP12.8bn in 2016 bonds paying a fixed rate of 7.25%, COP52.7bn in 2016s paying IPC+4.00%, COP31.5bn in 2018s paying IPC+4.20%, and COP95.8bn in 2021 bonds paying ICP+4.50%.
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Mexichem Finally Clinches Wavin Buy
After several failed bids, Mexico’s Mexichem has finally managed to seal its purchase of Dutch plastic pipe maker Wavin by offering to pay EUR531m ($704m) for the company. The move creates the world’s largest player in the plastic pipe market with EUR4bn in sales. Mexichem upped its offer to EUR10.5 per common share, or a 177% premium to the EUR3.79 per share close on November 18, the date originally used to mark Mexichem’s first offer, the company says. The Mexican company originally offered EUR8.5 per share in late November, later increasing it to EUR9 per share on December 9 and to EUR10 per share in early January. Taking Wavin’s 50.58m outstanding shares, the final EUR10.5 per share offer values the company at roughly EUR531m or an implied enterprise value to Ebitda of between 8.2x and 8.3x, according to data from people familiar with the deal. Such calculations assume net debt between EUR300m and EUR330m and an estimated 2012 Ebitda between EUR100m and EUR105m. Mexichem is financing the acquisition with EUR520 from its own cash and the rest with several credit lines. Mexichem retained Barclays Capital and Citigroup as advisors, while Bank of America Merrill Lynch was retained by Wavin. The deal became possible after the parties resolved lingering issues surrounding employee rights and pensions of Wavin’s Dutch workers. The companies have announced there will be no layoffs as a result of the merger.
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Ferreyros Starts Capital Raise
Peruvian heavy machinery distributor Ferreyros has raised PES167m ($62m) in the first stage of an equity capital raise open to existing shareholders, it says. It has placed 73.36m shares at PES2.28 each, representing 98% of the 75m it plans to raise. It will continue the sale Friday through Tuesday.
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Peru’s Central Bank Seen Leaving Rates
Peru’s monetary authorities are expected to leave the benchmark rate at 4.25% today, marking what would be the ninth consecutive month it has maintained a hands-off approach. Goldman Sachs notes that the economy has little need for any monetary stimulus, though the 4.23% year-on-year inflation remains outside the central bank’s 1%-3% band.