The IFC, BNDES and Itau have agreed to a $158m equivalent A-B loan supporting Toronto-based MBAC Fertilizer’s Itafos-Arraias phosphate and fertilizer project. The IFC is to provide a $40m 8-year project finance facility. It pays a spread to Libor that the IFC declines to disclose. BNDES will provide BRL205m passed through Itau, splitting that amount into credit lines valued at BRL11.5m and BRL193.5m. BNDES and Itau did not respond to requests for comment on the facilities’ details. Proceeds will help fund the development of a phosphate mine along with the Itafos fertilizer plant.
Category: Regions
Posted inDaily Brief
CAF Returns to Swiss Market
Regional development bank CAF became the sole LatAm issuer to tap the international markets Thursday when it raised CHF125m ($139m) in the Swiss franc market. Upsized from an initial target of CHF100m, the long 5-year bond came at a reoffer price of 100.264 with a 2.75% coupon to yield 2.697% or mid-swaps plus 185bp. CAF has become a frequent issue in this niche market. In January, it reopened its 2.625% of 2015s to raise CHF130m. At the time, the borrower said that pricing came inside its dollar curve after it retapped the bond at 99.791 to yield 2.774%, or mid-swaps plus 140bp.
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Colombian DCM Keeps Moving
Colombian bond markets continue to be open for business following the COP180bn ($95m) sale from power transmission from Transleca, with Findeter and UNE also preparing issuances. Transleca this week placed COP80bn in 2021 bonds at IPC+4.2% and COP100bn in 2026s at IPC+4.48%. Correval managed the sale, rated AAA on a national scale. Proceeds are marked for debt management and for working capital. State-owned development finance agency Findeter also plans to sell up to COP200bn, with a tentative pricing date of October 25. The bank wants to issue 2 and 3-year bonds paying spreads to the interbank rate IBR, and 5-year notes paying a spread to the IPC. As with previous issuance, the AAA national-scale issuer is structuring and coordinating the issue itself, aided by several local brokerages. Empresas Publicas de Medellin-owned telecom UNE is also hoping to revive a COP300bn sale postponed from the end of September, with timing slated for next week depending on market conditions.
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Chile Holds Rates, Mexico Next
Chile’s central bank chose to maintain the benchmark interest rate at 5.25%, in line with the market’s expectations. In a statement, the bank cited slowing global growth, and says that volatility could be worse than expected, with implications for Chilean growth, inflation and monetary policy. In a recent poll taken by the central bank, most analysts said they expect a cut to 5.0% by the end of the year. Mexico is scheduled to make its interest rate decision today. At its last meeting, Banxico held the benchmark rate at 4.5%, through many, such as Morgan Stanley see the door open for a 25bp cut by the end of the year.
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Liverpool Files MXP Shelf
Mexico’s Liverpool has filed a shelf to issue up to MXP25bn ($1.8bn) in the domestic market. The retailer has not given timing and size details. Banamex, BBVA Bancomer and HSBC are managing the program. Liverpool last tapped the domestic market in 2010 when it priced MXP2.25bn in 2020 bonds at 8.53%, or Mbonos+128bp, and MXP750m of 2020s in inflation-linked UDIs at 4.22% or Udibonos+92bp. Banamex and HSBC led last year’s deal. Liverpool is rated AAA on a national scale.
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BRICS Set Up Exchange Alliance
Brazil’s BM&FBovespa has agreed to form an alliance with the Hong Kong, Johannesburg, Moscow, Bombay and Indian National exchanges. Together, these markets represent a combined listed market capitalization of $422bn, a monthly trading volume of $422bn as well as 9,481 listed companies. Initially the exchanges will cross-list benchmark equity index derivatives on alliance member boards, but they are expected to later develop more innovative products to track the combined BRICS exchanges.
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BCP Tender Sees Strong Early Response
Banco de Credito Del Peru (BCP) has received commitments from creditors holding $114.4m of outstanding 6.95% 2021s to exchange these bonds for recently issued 6.875% 2026 fixed-to-floating rate notes. There are $120m of outstanding 2021s. Accepting holders get $1,078.38 worth of new bonds per $1,000 of the old ones, including a $30 early acceptance premium. Remaining holders have until October 24 to swap at $1,048.38. Creditors have also agreed to waive a provision in the original notes that keeps BCP from accepting more than $70m worth of bonds in such an offer. The new notes are the same as those offered on September 8, in a $350m sale. The NC10 bonds pay a fixed coupon and switch to a rate of Libor+7.708% per year after year 10. Bank of America Merrill Lynch and Morgan Stanley ran the initial sale and are also managing the exchange offer. The 2021 notes were originally issued in 2006.
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Codelco Borrows from Offtaker for M&A
Taking the unusual step of turning to an offtaker for financing rather than banks, Codelco has agreed to a standby bridge loan of up to $6.75bn from Japan’s Mitsui and Co., to help fund the Chilean state-owned miner’s possible purchase of up to 49% of the Anglo Sur mining complex. Codelco has an option to buy the position in the Chilean complex, owned by Anglo American, and this can be exercised beginning in January. Codelco says it values the stake at $9.76bn. Once the loan is disbursed, the credit would have a tenor of up to 12 months. If not repaid with cash or 50% of Codelco’s Anglo Sur equity interest at the end of the 12 months, the debt would automatically be converted into a 5-year term loan. Company officials did not respond to requests to comment on the interest rate. The option to acquire the 49% stake had previously been held by fellow Chilean state mining company Empresa Nacional de La Minera, which sold it to Codelco for $175m. The option comes up every 3 years and expires in 2027. The bridge financing arrangement comes as Codelco and Mitsui announce an offtake agreement for 30,000 tons of copper per year subject to market based pricing terms. Anglo Sur includes the Los Bronces and El Soldado mines, the Chagres smelter and the Los Sulfatos and San Enrique Monolito prospects.
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Arca Continental Prices MXP Bond
Arca Continental raised MXP3bn ($226m) in the Mexican bond market Wednesday. The bottler priced a MXP2bn 10-year fixed rate bond at 7.63%, or Mbonos +130bp and a MXP1bn 5-year floater at TIIE+ 25bp. Pension funds took part in the fixed-rate deal while private banking and investment funds participated in the floater. BBVA Bancomer, Bank of America Merrill Lynch and HSBC managed the deal, rated AAA on a local scale. The issuer last came to the Mexican domestic market in November 2010, when it priced a MXP3.5bn fixed and floating rate deal via HSBC. On that occasion, the borrower paid TIIE + 29bp on a 5-year and Mbonos +114bp on a fixed-rate 10-year.
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Banco de Chile Heads to Mexican DCM
Banco de Chile has filed a shelf to issue up to MXP 10bn ($752m) of debt in the local Mexican market. Banco de Chile will be the third Chilean issuer to tap the Mexican domestic market following similar moves by Banco de Credito e Inversiones (BCI) and Chilean miner Molymet. “Chilean issuers are turning to the Mexican market because it is attractive and offers an alternative for issuers to finance themselves,” says a banker managing the sale. Banamex and JPMorgan are leads. Timing and tenor have yet to be determined.