In what proved to be a positive day for the markets, Peru’s development bank Cofide was able to push pricing tighter on a $400m 10-year bond debut. Whispers of mid 300s turned into talk of 5.125% area and then to revised guidance of 5% (+/-5bp) before the deal was priced at 98.437 with a 4.75% coupon to yield 4.95% or UST plus 311.1bp. The credit was largely comped against the sovereign curve, where the 2019s were trading on a G-spread of 182bp, and against 100bp spread differential between Brazil’s own development bank BNDES and its sovereign. In the end the borrower managed to beat its stated goal of achieving 150bp over the sovereign. Books were heard reaching some $2.85bn in size, with 150 participating investors. The 144A/RegS senior unsecured issue is rated BBB and carries a change of control put at 101. Deutsche Bank and JPMorgan led.
Category: Regions
Canadian Pharma Gulps Brazilian Sports Drink Maker
Canadian pharmaceutical company Valeant has acquired Brazilian privately-held sports nutrition product and drink producer Probiotica Laboratorios in an all-cash deal valued at BRL150m ($86.7m). The acquisition cements Valeant’s foothold in Brazil, the one market, aside from Mexico, where Valeant maintains a presence in Latin America selling its generic pharmaceuticals. Valeant didn’t contract advisors for the deal, a spokeswoman says, and it is financing the buy with part of a new $500m tranche of its 2019 senior secured term loan B credit facility, announced earlier this week. Company officials estimate that the $86.7m that Valeant is paying for Probiotica represents an EV/Sales of 1.8x. Valeant previously acquired two Brazilian over-the-counter pharmaceutical companies in 2010 — one of which was Instituto Terapeutico Delta — a deal that included the purchase of a 165,000 square foot production plant.
Cabcorp Readies Pricing
The Central American Bottling Corporation (Cabcorp) is out with guidance of 7.75% area on a $150m 10-year bond, with pricing expected today. The Guatemala-based anchor bottler for Pepsi in Central America was to wrap up roadshows in New York yesterday via sole lead Citi, marketing senior guaranteed notes rated Ba2/BB/BB+. Cabcorp is controlled by the Castillo family, with Pepsico holding an 18% stake. Cabcorp expanded into the Caribbean in 2009 when it bought PepsiAmericas and its territories in Puerto Rico, Jamaica and Trinidad. As of September 30, 2011, short-term maturities only amounted to $19m, versus $85m of cash on hand, according to Moody’s.
Homex Builds Book
Mexico’s Desarrolladora Homex emerged Wednesday with 10.25% area guidance on a $250m-plus 8-year NC5 bond on its last day of roadshows, with pricing expected today. Credit Suisse and Deutsche Bank are acting as leads. This comes in the wake of a successful $500m 10-year NC5 last week from homebuilding peer Urbi (Ba3/BB minus), which generated a book of $2.5bn from over 170 accounts, pricing to yield 10%. Like Urbi, Homex is using proceeds to refinance short-term debt, with Moody’s assigning a Ba3 rating to the issue. The homebuilder last visited the bond market in December 2009, when it issued a $250m 9.5% 2019 to yield 9.99%, through Credit Suisse and HSBC. Those bonds have been trading around 9.40% mid-market.
Codere Upsizes Debut Dollar Deal
Codere Finance priced a $300m 2019 NC3 bond Wednesday, landing its dollar debut in the international bond market. The Spanish-based gambling group with significant LatAm operations upsized from an original $250m and priced the notes at par to yield 9.250% or UST+801bp, in line with 9.25% area guidance. “It was cheap to outstanding bonds,” notes one investor following the transaction. Codere’s outstanding 2015 euro bonds were trading at 8.5% Wednesday. Demand came from EM and US high yield accounts. The gaming company is raising funds for the purchase of an additional 35.8% stake in Mexico’s Corporacion Interamericana de Entretenimiento. Codere’s Mexican unit agreed in August to buy the stake for MXP2.68bn ($217m). Codere has operated in Mexico for 13 years and is also in Argentina, Brazil, Colombia, Panama and Uruguay. Credit Suisse Barclays and Itau led the B2/B transaction. The bonds were trading 100.25 in the grey Wednesday, according to an investor.
CSN Buys German Steelmaker
Brazil’s Companhia Siderurgica Nacional (CSN) has purchased all the shares of German long steel producer Stahlwerk Thuringen (SWT) and distributor Gallardo Sections from Spanish group Alfonso Gallardo for a EUR482.5m ($636.6m) price tag, assuming no indebtedness, the company says. CSN purchased the shares through its Spanish subsidiary CSN Steel which handles the company’s European operations. Officials at CSN did not respond to several inquiries for additional comment, while SWT officials could not immediately be reached for additional details. SWT has a 1.1m ton-per-year installed capacity, which would cement CSN’s steel division in the region. The SWT acquisition is the second announced this year by the Brazilian company. In early January, CSN announced the purchase of 14.7m shares in railroad operator MRS Logistica from the Belize-based International Investment Fund for an undisclosed sum.
Bancolombia Prices New York Follow On
Bancolombia has raised $300m in the international portion of its follow-on equity offering, pricing 5m ADRs representing 20m preferred shares at $60.00 each, according to bankers on the trade. The deal represents the remaining shares after Colombians bought 44m shares at COP26,000 each to raise COP1.14trn ($614m) in a domestic offer that closed last week. The price comes at a 3.24% discount to the ADRs’ $62.01 Tuesday close. The $914m-equvalent total follow-on comes as the bank seeks additional capital after spending $150m to join Grupo Sura’s bid for ING’s LatAm insurance assets late last year. It has also been trying to improve operational efficiency. UBS was global coordinator of the ADR sale, with Bank of America Merrill Lynch and JPMorgan coming in as joint bookrunners. Bancolombia’s own capital markets arm managed the domestic portion. Bancolombia’s Colombian shares closed Tuesday at COP27,960.
Cofide Quietly Builds Book on Debut
Peru’s development bank Cofide tested the waters Tuesday with mid-300bp whispers on what is expected to be $500m 10-year bond, the credit’s debut in the international markets. Pricing could come as soon as today. At that level, the borrower is in line with its long-held target of 150bp over Peruvian sovereign paper, and offers a nice pick up to Brazil’s development bank BNDES (Baa1/BBB), which has 2020s trading at around 242bp. Books were heard reaching around $500m early Tuesday, with investors expecting demand to be sufficiently strong to allow Cofide to reach its target size. The 144A/RegS senior unsecured issue is rated BBB and carries a change of control put at 101. Deutsche Bank and JPMorgan are leads.
Ecopetrol Buys 30% of Peruvian Block
Colombia’s Ecopetrol has agreed to acquire a 30% stake in an oil and gas exploration and production license in Peru from Spain’s Repsol. The deal involves participation in block 109 located in Peru’s Amazon jungle region, the companies say. Officials at Repsol and Ecopetrol declined to offer a total price tag for the deal but they said no advisors were involved in the transaction which was handled by the company’s own executive teams. Peru’s 109 block was originally assigned to Repsol by the Peruvian government in December 2005 and so far the venture, which involves an area of 357,200 hectares, is still in the exploratory stage. Ecopetrol already has a presence in the Andean country through participation in 4 blocks in partnership with Repsol and Argentina’s YPF.
Elektra Returns to Reopen 2018s
Mexican retailer Elektra re-opened its 7.25% 2018 NC4 bonds for another $150m Tuesday, taking the issue to an outstanding size of $550m. Starting at 8.00% area guidance and finally settling on an 8.00% yield , the financial services and specialty retailer reopened the 2018s at 96.251. Some investors found the deal fair at 8.00% seeing a 20bp-25bp concession against 7.75%-7.80% trading levels, while others calculate a 40bp-45bp concession for the RegS only BB minus issuer. The bonds were trading flat in the grey, according to an investor. Elektra is part of Ricardo Salinas’s holdings, which include TV Azteca, Banco Azteca and Iusacell. BCP Securities, Jeffries and UBS managed the deal. The same trio brought the original 2018 sale last July, marking the issuer’s first cross-border appearance in more than 10 years. The $400m sale came at a 7.50% yield.